Member Ahn Do-geol, promotion for inheritance tax deduction and spouse deduction from 500 million won to 750 million won.

Assemblyman Ahn: “Increase in Inheritance Tax Deduction Amount Needed to Alleviate Middle Class Burden and Anxiety”
“Oppose the Reduction of Highest Inheritance Tax Rate as Clear Wealthy Tax Reduction”,

Ahn Dogul National Assembly member. Provided by Ahn’s office,
, “Ahn Dogul, a Democratic Party member representing Gwangju Donggu Namgu, announced on the 21st that he is pushing for a bill to amend the Inheritance and Gift Tax Law to increase the flat deduction and spouse deduction from 500 million won to 750 million won each, by 50% respectively.”,
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, ‘Under the current law, to alleviate the burden of inheritance tax, there are deductions that exclude a certain amount from the inherited property. The flat deduction guarantees 500 million won, and the spouse deduction guarantees a minimum of 500 million won. As of 2023, among the total inheritance deductions (18.2 trillion won), the spouse deduction accounts for 7.5 trillion won, and other deductions including the flat deduction account for 10.5 trillion won, the majority. Although it is possible to choose individual deductions such as basic deduction of 200 million won and child deduction (5 million won per person) instead of the flat deduction, in many cases, even if all individual deductions are applied, they are lower than the flat deduction of 500 million won, so most inheritances receive the flat deduction.’,
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, “However, the current deduction levels have remained unchanged for 27 years since the full revision of the Inheritance Tax Law in late 1996, leading to concerns that the inheritance tax targets are expanding to the middle class. According to the ‘2023 Inheritance Tax Declaration Status’, the number of inheritance tax targets has increased by about double (9,833 people) compared to five years ago, with inheritances under 2 billion won accounting for 69% of the total increase. There is a need to adjust the deduction amount to reduce inheritance tax targets and alleviate the burden and anxiety of the middle class.”,
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, ‘In response, Ahn is promoting a bill to amend the Inheritance Tax Law by increasing the flat deduction and spouse deduction by 50% each from the current 500 million won to 750 million won. If the bill is passed, the inheritance tax exemption threshold in case of a surviving spouse will increase from the current under 10 billion won to under 15 billion won. As of 2023, the majority of inheritances below 300 million won (7,520 individuals) could be excluded from the inheritance tax targets, and even those in the 300 million won to 500 million won bracket (2,712 individuals) could also be excluded from the tax targets. It is expected that the inheritance tax targets will decrease from the current level of 5.2% of deceased persons to 2.3-2.5%.’,
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, ‘Meanwhile, the government is pushing for a revision to increase the current child inheritance deduction amount from 5 million won to 500 million won, ten times higher. In response, Ahn pointed out, “Raising the individual deduction for children may lead to issues of fairness as the tax burden could significantly vary depending on the number of children, and it may also raise concerns about the gift tax child deduction amount (currently 5 million won) needing to be increased.” Currently, the child deduction amounts for inheritance and gift taxes are the same at 5 million won, so increasing only the inheritance tax by ten times could distort parental generations’ decisions on asset transfers.’,
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, ‘Furthermore, Ahn emphasized, “Considering that the formation of a couple’s assets involves joint contributions, the increase in spouse deduction should also be reflected.” It is considered most rational to adjust the inheritance deductions centered on flat and spouse deductions that have remained unchanged since 1997 in line with socio-economic changes.’,
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, ‘However, regarding the government’s plan to reduce the highest inheritance tax rate, Ahn explained, “Only 0.4% of all deceased persons, about 1,200 individuals, will benefit; there is no need to give a tax reduction benefit of 2 trillion won to high-net-worth individuals in the hundreds of billions to trillions.” Ahn emphasized that reducing the highest inheritance tax rate is clearly a tax reduction for the wealthy and should be opposed in the National Assembly.’,
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