2024-03-03 10:12:30
Reporter Bae Min-ju, Ttangjipgo
[땅집고] “If it were me, when my child gets married, I would add 100 million won to the marriage tax deduction limit of 150 million won, giving him 250 million won. If the tax rate is 10% based on 100 million won, a lower tax rate is applied than earned income, and there is nothing more advantageous than this. Assuming that two couples receive a total of 500 million won, they only have to pay gift tax of 19.4 million won.”
The full-fledged wedding season is approaching. To celebrate the wedding, family and friends give congratulatory money to the newlyweds. We spoke with Yoo Chan-young, a tax accountant from the National Tax Service who has 46 years of experience as a tax accountant and a family representative at the tax office, to find out how long there are no gift tax issues when delivering a large congratulatory gift, and how best to use the gift or cash received from parents.
-There are cases where large sums of money are given as congratulatory gifts between family members. Are there any problems with gifting?
“In the case of gift money, it is originally subject to gift tax, but there are prerequisites. It must be an amount that is accepted by social norms. If it is outside the range of the amount normally paid, it is subject to gift tax. “It’s okay for people with a lot of money to pay a lot.”
-How regarding giving the congratulatory money received from parents to their children?
“Basically, the gift belongs to the person who received it. However, one must be careful regarding putting the gift money received into the parents’ account. “Often, when a child gets married and goes on an overseas trip, cash is deposited into the parent’s account for safekeeping and then transferred to the child. This can be presumed to be a gift.”
-How much support can I receive from my parents when getting married?
“Wedding items are exempt from tax. As long as it is not a luxury item, you can buy it as much as you want. The best way may be to receive a wedding gift from the grandparents and receive cash as a gift from the parents. If you are purchasing a wedding dress with the support of your parents, it is a good idea to collect supporting documents such as receipts. “The best way is to purchase a wedding dress with your grandfather’s card and save the receipts.”
-Up to 150 million won in cash can be given when a child gets married. How should I use the wedding gift deduction?
“I know that the marriage deduction is 150 million won, but in fact, the basic deduction is 50 million won and an additional 100 million won is provided. You can get this from your grandparents. As a tax accountant, if I had to give it to my child, I would meet the 150 million won deduction limit and give it an additional 100 million won.
The only thing with a 10% tax rate on 100 million won is gift tax. If you deduct the 3% reported tax credit, you only have to pay 9.7 million won in gift tax based on 100 million won, and if two couples receive 500 million won, you only have to pay a total of 19.4 million won in gift tax. There is no better gift method than this. From the perspective of newlyweds, if they receive 500 million won, it is good because they can use their own deposits or loans to create a usable fund of regarding 700 to 800 million won.
However, if you divorce within two years of receiving the gift, you must return it. If it is not returned, general gift tax is imposed. There is no additional tax, but if you have to return that large amount later, it will be a burden like a ‘tax bomb’. In the end, marriage and gift decisions must be made carefully.”
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