Please explain the gift property deduction in detail.

The key system for reducing taxes when receiving a gift is the gift property deduction.

The gift property deduction applies only where the donee receiving the property is a resident, and the deduction limit varies depending on the relationship with the donor.

When receiving a gift from a spouse, up to 600 million won can be deducted over 10 years; for lineal ascendants (including a stepfather or stepmother) or lineal descendants, up to 50 million won; and when a minor receives from a lineal ascendant, up to 20 million won is possible.

For other relatives, that is, blood relatives within the sixth degree and relatives by marriage within the fourth degree, up to 10 million won is deducted.

For other donees, the gift property deduction does not apply.

However, where the gifted property falls under a taxation special provision prescribed by the Restriction of Special Taxation Act, such as startup funds or small and medium enterprise stock for business succession, a deduction of up to 500 million won is possible, and it cannot be applied in combination with the general gift property deduction.

In addition, when a gift tax is imposed on title-trust property, the gift property deduction cannot be applied.