Are there ways to reduce the gift tax burden during business succession?

The special tax exemption for business succession gift tax is a system that can dramatically lower the gift tax burden, and if certain requirements are met, low-rate gift tax is applied instead of the general gift tax rate when receiving family business shares as gifts.

Specifically, with a limit of 60 billion won for family business share gift value, after deducting 1 billion won, a 10% gift tax rate is applied, and a 20% rate is applied only to the portion exceeding 6 billion won in the tax base.

However, not just anyone can apply this. Donor, donee, and family business requirements must all be met.

The donor must be 60 years or older, have managed the company for 10 years or more, and hold a certain stake. The donee must be a child aged 18 or older and meet family business engagement requirements such as taking office as CEO within a certain period after the gift.

Also, post-gift obligations are important, such as maintaining the company for 5 years after the gift, holding the shares, and maintaining the CEO position. If these are not maintained, the reduced gift tax may be additionally collected, requiring caution.

Therefore, when preparing for family business succession, it is important to plan considering not only the gift tax rate but also the burden of post-management and future inheritance tax together.

Therefore, it is important to establish a strategy to minimize the gift tax burden through consultation with a tax specialist attorney.