Gift tax is generally levied when property is received free of charge. By the way, since receiving living expenses or educational expenses from a spouse or parent is also received at no cost, is gift tax levied?
The tax law stipulates that living expenses and education expenses that are recognized as a social norm are property that is not subject to gift tax. In other words, gift tax may not be levied on the amount recognized by social conventions among family living expenses and education expenses.
However, it is not necessary to pay gift tax on all family living expenses and education expenses.
First, living expenses or education expenses for which gift tax is not levied must be paid while they are obligated to support the civil law. In principle, parents have the duty to support their children, and if the parents are capable of supporting them, grandparents have no obligation to support them.
Accordingly, the National Tax Service considered that gift tax was levied on grandfather’s payment of student money to grandchildren. In the same way, the Tax Tribunal judged that a gift taxable property if a grandfather provided a large amount of support for kindergarten expenses for his grandson. This is because if the parents have the ability to support, the grandfather has no obligation to support.
In addition, in the case of paying living expenses and child education expenses to a divorced husband, it was judged that a divorced couple could be subject to gift tax because there is no obligation to support them under civil law.
In addition, the gift tax is not levied only when the family living expenses or educational expenses are donated whenever necessary and used directly for the purpose.
Even if it is money received in the name of living expenses or education expenses, gift tax may be levied if the money is not used accordingly and is used for periodic deposits or savings, or for acquiring money for housing or land.
For example, if a child receives money in the name of college tuition or in the name of living expenses from a spouse and actually uses it as an apartment acquisition fund, gift tax is levied.
In addition, since living expenses and education expenses must be within the range recognized by social conventions, gift tax may be levied if the amount is excessive.
There is no single standard for the amount recognized by social convention, and it is judged by comprehensively considering various circumstances such as the relationship between the donor and the recipient, occupation, age, income, and property.
If the child or the child’s spouse already has enough income or wealth, but the parent gives excessive or unnecessary living expenses and study expenses, this may be judged as subject to gift tax.
A problem in this regard is the frequent bank transfer of funds between couples.
A Supreme Court precedent ruled that there may be various reasons, such as the convenience of family life and payment of living expenses, in addition to the gift between the couple. Therefore, the fact of the gift is not immediately presumed by the fact of account transfer alone.
However, in the case of tax audit, if there are many details of account transfers between couples in the past and the accumulated amount is large, it is often necessary to explain this, so it is necessary to be careful.
As mentioned above, even if money is given in the name of living expenses and education expenses between families, not all gifts are tax-free. Therefore, it is better to use the gifted property deduction system if you donate more than general living expenses or education expenses to your family.
For 10 years, the gift tax is deducted from the gift tax of 600 million won for spouses, 50 million won for adult children, and 20 million won for minor children. You can consider it.
In addition, if you are considering a large gift, it is better to get an expert review of the gift plan in advance.
