Criteria are updated as needed.

Giving with Confidence

Gift Tax is a tax on the transfer of property by one individual to another while receiving nothing, or less than full value, in return. While many gifts are untaxed due to generous annual and lifetime exemptions, staying informed is key to long-term financial planning and estate management.

Key Gift Tax Strategies

Annual Exclusion: Take advantage of annual exclusion limits to gift a certain amount to any number of people each year without triggering tax.
Lifetime Exemption: Understand your lifetime gift and estate tax exemption, which allows for substantial tax-free transfers over a lifetime.
Direct Payments: In many jurisdictions, paying for someone’s medical expenses or tuition directly to the institution is not considered a taxable gift.

Plan your generosity with clarity using our Gift Tax tool.

What is Gift Tax? (Understanding Gifting)

Gift Tax is a tax imposed on the gratuitous transfer of property from one person to another. While many countries apply progressive tax rates to large transfers, various ‘Gift Tax Exemptions’ and deductions exist to ease the burden for family members.

1. Typical Exemption Limits (Varies by Jurisdiction)

Gift tax is often calculated on an annual or multi-year cumulative basis. In many frameworks (Example: South Korea 2025):

Spouse: Up to 600M KRW
Immediate Ascendants (Parents/Grandparents): 50M KRW
Immediate Descendants (Children/Grandchildren): 50M KRW
Other Relatives: 10M KRW

Note

Special Marriage/Birth Exemptions New regulations often allow additional deductions for gifts received within a specific window (e.g., 2 years before/after marriage or birth), significantly raising the tax-free threshold.

2. Progressive Tax Rates (Standard Model)

Tax is generally applied to the ‘taxable base’ (Gifted amount - Exemptions).

Taxable Base	Tax Rate	Progressive Deduction
Up to 100M	10%	-
100M to 500M	20%	10M
500M to 1B	30%	60M
1B to 3B	40%	160M
Over 3B	50%	460M

💡 Tax Saving Strategies

Gifting Early (10-Year Rule): Since many jurisdictions reset exemption limits every 10 years, starting transfers when children are young can move significant wealth tax-free over time.
Splitting the Recipients: Distributing a gift among multiple family members (spouse, children, grandchildren) allows you to utilize lower tax brackets multiple times.
Reporting Even if Tax-Free: Always file a gift tax return. This creates an official paper trail for the recipient’s “source of funds” when they purchase assets like real estate in the future.

Frequently Asked Questions

Are educational or living expenses taxable?

Generally, payments for necessary living expenses, medical bills, or tuition made within a reasonable social norm are exempt. However, if these funds are accumulated to purchase stocks or real estate, they become taxable.

Can’t I just give cash without reporting?

Tax authorities utilize sophisticated systems to monitor high-value transactions. Unexplained increases in assets or spending relative to reported income can trigger audits and heavy penalties.