Is the child gift tax exemption limit reapplied every 10 years?

The child gift tax exemption limit is applied cumulatively over a 10-year cycle.

This is because, when gifting between lineal ascendants and descendants, all amounts received from the same person within the most recent 10 years are added together to determine whether the deduction limit has been exceeded.

The point to note here is that 'parents' are considered the same person under tax law.

That is, even if you receive gifts separately from your father and mother, the amounts are combined, and only up to 50 million won is exempt for adult children and up to 20 million won for minor children.

However, due to recent tax law revisions, in cases of marriage or childbirth, an additional 100 million won can be deducted on top of the existing limit, so non-taxable gifts of up to 150 million won are now possible.

If 10 years have passed from the initial gift date, the previous gift amount is excluded from the cumulative total, and the deduction limit is restored.

Therefore, the basic principle of tax savings is to advance the gift timing as much as possible and execute planned distributed gifts in 10-year units.

In particular, if the donor dies within 10 years of the gift, the relevant property is added back when calculating inheritance tax, so for elderly parents, an early gift considering health status is advantageous.

Also, gifting real estate, where value appreciation is expected, rather than cash, or utilizing 'gifts with assumed debt' that transfer debts together to lower the tax base, are also valid strategies.

Daeryun Law Firm collaborates with internal accountants and tax accountants to support comprehensive tax-saving strategies, from gift structure design to tax review and reporting.

If you need legal advice regarding the child gift tax exemption limit, please promptly consult with a tax specialist attorney.