Farming Inheritance Deduction Calculator

What is the farming inheritance deduction?

Korea’s farming inheritance deduction lets an heir who takes over farming, forestry, or fishing (including livestock) that the deceased carried on deduct the value of the inherited farming estate from the inheritance tax base, up to KRW 3 billion.
It is set out in Article 18-3 of the Inheritance and Gift Tax Act and is meant to ease the tax burden on successors who keep farming, fishing, or forestry going across generations.

This calculator, based on the 2026 Act Article 18-3 and Enforcement Decree Article 16, splits the test into individual farming and farming corporations and judges the requirements for the deceased and the heir separately, then computes the deduction and the tax saving.
It also reflects the residency and self-farming tests and the newly added 2026 other-income exclusion, so you can check whether the deduction actually applies.

Korea-based, 2026 rules. This calculator reflects the Inheritance and Gift Tax Act Article 18-3 (in force from 2026-01-02) and its Enforcement Decree Article 16 (in force from 2026-02-27). It is a reference estimate for Korean inheritance tax and does not replace professional filing advice.

Deduction limit and how it is calculated

A fixed KRW 3 billion cap

The farming inheritance deduction equals the value of the farming estate, capped at KRW 3 billion (Article 18-3(1)).
Unlike the family business deduction, whose cap ranges from KRW 30 to 60 billion by operating period, the farming deduction is fixed at KRW 3 billion regardless of how long the deceased farmed.

Deduction formula

Deduction = min( farming estate value , KRW 3 billion )

The farming estate value is the value of assets the deceased used for farming from 2 years before the inheritance date, minus any debt secured on those assets (Enforcement Decree Article 16(5)).
Eligible assets include farmland, permitted grassland, forest land afforested for 5+ years, fishing vessels, fishing and aquaculture rights, farm buildings (warehouses, barns, fish farms) with their land, and salt fields; for a farming corporation, the inherited shares are the eligible asset.

Korean inheritance tax uses a five-tier progressive rate from 10% to 50%.
Reducing the base by the deduction cuts tax at the marginal rate, so deducting KRW 3 billion in the 50% bracket can save close to KRW 1.5 billion in inheritance tax.

Individual farming (Income Tax Act) requirements

This track covers a person who directly farms, raises livestock, fishes, or manages forest land using their own farmland, grassland, forest, or vessels.
Both the deceased and the heir must meet their requirements; if either group fails, no deduction is allowed.

Requirements for the deceased

• 8-year self-farming: must have farmed directly and continuously from 8 years before the inheritance date.
• Direct engagement: engaged full-time in cultivation, livestock, fishing, or afforestation, or performing at least half of the work with their own labor.
• Residency (30km): must live in the city/county/district of the farmland or an adjacent one, or within 30km straight-line distance.
• Up to 1 year not farmed due to illness or expropriation is still counted as farming.

Requirements for the heir

• Age 18+: must be 18 or older on the inheritance date.
• 2-year self-farming: must have farmed directly and continuously from 2 years before the inheritance date.
• Residency: must meet the same 30km residency test as the deceased.
• Waiver: if the deceased died before age 65 or from an unavoidable cause such as a disaster, the 2-year self-farming test is waived.
• Farming successor: a farming, fishing, or forestry successor certified under Ministry rules can substitute for the engagement and residency tests.

Farming corporation (Corporate Tax Act) requirements

When shares of a corporation whose main business is farming, forestry, or fishing are inherited, the residency and self-farming tests are replaced by operation and shareholding tests.
The requirement structure differs entirely from individual farming, so choose the business type carefully.

Requirements for the deceased and heir

• 8-year operation: the deceased must have run the farming corporation continuously from 8 years before the inheritance date.
• 50% shareholding: the deceased and related parties combined must have held at least 50% of total shares continuously.
• Heir 2-year engagement: the heir must be 18+ and have worked in the company from 2 years before the inheritance date (waived if the deceased died before 65).
• Executive and CEO appointment: the heir must take an executive post by the inheritance tax return deadline and become CEO within 2 years of that deadline.

The 2026 other-income exclusion (must check)

A February 2026 decree amendment added a rule that excludes taxable periods with large non-farm income when counting the 8-year and 2-year self-farming periods for individual farming (Enforcement Decree Article 16(14)).
A taxable period in which the deceased or heir had business income (excluding farming, forestry, fishing, real-estate leasing, and side-farm income) plus total salary of KRW 37 million or more is treated as not farming.

For example, even with 9 years of self-farming, if other income exceeded KRW 37 million in 2 of those periods, the effective period is 7 years — short of the 8-year requirement.
If you farmed only on weekends while holding a city job, this rule may apply, so enter the number of excluded periods in the calculator to confirm the effective period.

How to use this calculator

Step 1. Choose the business type

Select individual farming (Income Tax Act) or farming corporation (Corporate Tax Act).
The requirement fields switch to residency/self-farming or operation/shareholding accordingly.

Step 2. Enter the deceased’s details

Enter the farming (operating) period and residency (individual) or shareholding ratio (corporate).
For individuals, entering excluded taxable periods automatically computes the effective period.

Step 3. Confirm the heir conditions

Select age 18+, the 2-year period, and residency (individual) or executive appointment (corporate).
If the deceased died before 65 or the heir is a certified farming successor, choose yes for those items.

Step 4. Enter the estate value and judge

Enter the farming estate value in units of 100 million won and press Judge.
The pass/fail of each group, the deduction (up to KRW 3 billion), and the tax saving appear at once.

Frequently asked questions

Q. Why is the cap fixed at KRW 3 billion?

A. Article 18-3(1) sets the farming deduction cap at KRW 3 billion.
Unlike the family business deduction (KRW 30–60 billion by operating period), the farming cap does not vary with the farming period.

Q. I farmed only on weekends while living in the city. Do I qualify?

A. You must meet both the 30km residency test and the direct-engagement test (at least half the work by your own labor).
Also, taxable periods with other income of KRW 37 million or more are excluded, so large non-farm income can shorten the self-farming period.

Q. What if the deceased died suddenly?

A. If the deceased died before age 65 or from an unavoidable cause such as a disaster, the heir’s 2-year self-farming test is waived.
The remaining conditions, such as residency, must still be met.

Q. What happens if I sell the farmland after the deduction?

A. If within 5 years of the inheritance date you dispose of the farming estate or stop farming without justifiable cause, the full deducted amount is added back to the inheritance tax base and recaptured with interest.
Expropriation, sale to the government, and farmland exchange or consolidation count as justifiable causes.

Q. Can it be combined with the family business deduction?

A. The farming deduction (Article 18-3) and the family business deduction (Article 18-2) cannot both apply (Article 18-4).
You must choose whichever one is more favorable.

Tips and cautions

Confirm the effective period: check for taxable periods excluded by the KRW 37 million other-income rule so the 8-year and 2-year tests are judged on the effective period.
Manage residency: the 30km residency test is often overlooked; confirm the address and farmland location before the inheritance.
5-year post-management: disposal or stopping farming within 5 years triggers full recapture with interest, so keep farming after the inheritance.
Choose against the family business deduction: a farming corporation cannot use both, so compare and pick the more favorable one.
Net out secured debt: the farming estate value is net of debt secured on the assets, so enter mortgaged farmland at its net value.

Check your farming inheritance deduction now

Verify the individual or corporate farming requirements one by one, and estimate the KRW 3 billion cap, the deduction, and the tax saving.

Based on the Inheritance and Gift Tax Act Article 18-3 and Enforcement Decree Article 16, 2026 rules.

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