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Effective Gift and Tax Saving Strategies: Gifts Between Parents and Children, Transfer Tax, and Investment Tax Saving Methods

1. Basic Principles of Property Transfer Between Parents and Children

Importance and Precautions of Writing a Promissory Note

• When lending money between parents and children, a promissory note must be written, and interest must be set to avoid tax issues.
• Interest up to 10 million won per year can be exempted, and up to about 217 million won can be processed interest-free based on the principal.
• Since the National Tax Service thoroughly manages promissory notes, the principal repayment plan must be consistently followed.

Post-Debt Management

• The National Tax Service strictly enforces post-debt management based on promissory notes. If actual repayment is not made, it is considered a gift, and there is a risk of a tax bomb.

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2. Gift Tax Saving Strategies: Continuous Tax Savings Through 10-Year Intervals

• Gifts between parents and children can be used with tax-free limits once every 10 years.
  • Gift Tax Exemption Limits:
    • Adult Children: 50 million won per parent.
    • Minor Children: 20 million won per parent.
  • Distribute assets within legal limits through continuous gifts.
• 3366 Gift Method:
  • If gifts are given steadily from when children are young, they can enjoy compound interest effects when they become adults.
  • If continued until age 31, more than 180 million won can be saved.

Utilizing Marriage Funds

• 100 million won can be gifted from each parent of both families for 2 years before and 2 years after marriage.
• Through these tax-saving methods, young generations can establish initial assets and secure funds for purchasing a home.

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3. Real Estate Gift and Tax Savings

Using Low-Price Transfers and Burdened Gifts

• Utilizing Low-Price Transfers:
  • Transfer at a price lower than the market price by a certain amount.
  • Based on a market price of 1 billion won, transfer up to 300 million won to avoid being considered a gift.
• Burdened Gift:
  • By utilizing lease deposits and loan succession, parents can reduce transfer tax burden, and children can ease the gift tax burden.

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4. Responding to Changes in Overseas Investment and Virtual Asset Taxation

Overseas Stock Transfer and Gifts

• Domestic Stocks:
  • Transfer tax is exempted if not a major shareholder.
• Overseas Stocks:
  • Pay 22% capital gains tax on capital gains.
• Tax Savings Through Gifts:
  • If overseas stocks are gifted, they can be transferred to a spouse or family member at a higher acquisition cost.
  • If sold within one year after the gift after January 1, 2025, the previous acquisition price will be applied (tax deferral).

Virtual Assets

• Tax is deferred until 2025. It is necessary to be familiar with the tax calculation method in preparation for the future tax system.

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< Summary >

1. When giving gifts between parents and children, thoroughly manage interest and principal repayment based on promissory notes.
2. Establish a long-term tax-saving plan by utilizing the 10-year gift tax exemption limit.
3. Optimize gift and transfer taxes through low-price transfers and burdened gifts.
4. Plan for gifts and tax savings in preparation for new investment methods such as overseas stocks and virtual assets.

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[More…]

• Gift Tax Saving Methods
• Overseas Stock Transfer Tax Calculation

*YouTube Source: [경제 읽어주는 남자(김광석TV)]

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