Recently, tax-related information has been spreading rapidly through YouTube and social networking services (SNS). The problem is that much of this information does not actually align with the tax laws. In particular, inheritance and gift taxes are of great interest to many people as they relate to monetary transactions within families, but acting on incorrect information can result in unexpected taxes and additional tax penalties.

In response, the National Tax Service has released the "Misconceptions and Truths About Inheritance and Gift Tax" material to correct misinformation about these taxes. Let's take a look at some of the representative cases identified by the National Tax Service.

"If you write 'living expenses,' you don't have to pay gift tax?"

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One of the most common misconceptions is that parents can transfer 1 million to 2 million won to their children every month and, as long as they write "living expenses" in the account memo, there is no gift tax liability. However, the tax law only recognizes certain living expenses as non-taxable. Supporting a child with living expenses is considered non-taxable only if the child is genuinely unable to support themselves. On the other hand, if regular living expenses are provided to an adult child who is employed or financially independent, it may be considered a gift.

In other words, what matters is not what is written in the account memo, but whether the child is financially independent and the true nature of the transferred funds.

Parental credit card use and wedding congratulatory money must be reviewed carefully

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Care is also needed when a child uses a parent's credit card. Not every case of family members sharing a card is subject to gift tax, but if a working child uses a parent's card to buy luxury goods or pay for overseas travel, the situation is different.

The National Tax Service explained that such cases may be regarded as similar to a cash gift. In particular, if a person's spending is excessively high compared to their income level, or if there is evidence of large debt repayments, a source-of-funds investigation may be initiated. If the use of a parent's card is confirmed during this process, both gift tax and additional tax can be imposed.

There are also many misconceptions about wedding congratulatory money. Gifts received based on a personal relationship with the bride or groom are recognized as the property of the newlyweds, but congratulatory money given by the parents' acquaintances is, in principle, considered the property of the parents. Therefore, if a house is purchased under the child's name or a loan is repaid using congratulatory money meant for the parents, it may be subject to gift tax. It is important to remember that not all wedding congratulatory money is recognized as belonging to the bride or groom.

"No need to report if inherited assets are 1 billion won or less?"

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The National Tax Service also clarified that claims suggesting there is no need to file an inheritance tax return for assets of 1 billion won or less are incorrect. In a typical case where both a spouse and children are present, the lump-sum deduction of 500 million won and the minimum spouse deduction of 500 million won may result in no tax due, but whether or not a filing is required is a separate matter.

In particular, any assets the deceased gave to heirs within 10 years before death may be included in the inherited assets. In addition, if 200 million won or more is withdrawn or assets are disposed of within 1 year prior to death, or 500 million won or more within 2 years prior to death, and the use of those funds is unclear, those amounts may be presumed to be inherited by the heirs and thus subject to taxation.

The National Tax Service classifies these as "presumed inherited assets." Since the taxpayer bears the burden of proving how the funds were used, it is important to keep thorough records if large withdrawals or disposals occur.

Relying solely on short videos for tax information is risky

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Inheritance and gift taxes are closely connected to financial transactions between family members. It is easy to assume that "this should be fine," but the actual application of tax law is more complicated than it seems.

In particular, YouTube or short-form content often conveys only the key points due to time constraints, frequently omitting exceptions or detailed standards. Tax matters should not be treated as simple tips; instead, accurate verification tailored to one's own situation is necessary.

Based on this material, the National Tax Service also plans to produce short-form videos and release them sequentially through its official YouTube channel. As issues such as living expenses transfers, credit card use, congratulatory money, and inheritance reporting between parents and children can arise for anyone, it is important to be cautious and not be misled by incorrect information.

'Misconceptions and Truths About Inheritance and Gift Tax' material released by the National Tax Service on the 31st. Screenshot from the National Tax Service website

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