Korea Inheritance Deduction Limit | Prior Gifts, Renunciation and Skip Surcharge

Taxable value, applied deductions, tax base, inheritance tax and family burden by scenario
Scenario	Taxable value	Applied deductions	Cut	Tax base	Final tax	Prior gift tax	Family burden	vs A
A Current plan Renunciations, bequests and gifts as entered	1,990,000,000 KRW	940,000,000 KRW	80,000,000 KRW	1,050,000,000 KRW	168,364,286 KRW	105,000,000 KRW	273,364,286 KRW	—
B Agreed partition instead First-rank heirs take grandchild and non-first-rank shares by agreed partition	1,990,000,000 KRW	1,020,000,000 KRW	0 KRW	970,000,000 KRW	122,220,000 KRW	105,000,000 KRW	227,220,000 KRW	-46,144,286 KRW
C Gifts outside the window Assumes gifts were made more than 10 years (non-heirs 5) before death	1,390,000,000 KRW	890,000,000 KRW	130,000,000 KRW	500,000,000 KRW	96,030,000 KRW	105,000,000 KRW	201,030,000 KRW	-72,334,286 KRW
D No lifetime gift Assumes gifted property stayed in the estate	1,990,000,000 KRW	1,020,000,000 KRW	0 KRW	970,000,000 KRW	240,075,000 KRW	0 KRW	240,075,000 KRW	-33,289,286 KRW

How renunciation, grandchild bequests and lifetime gifts shrink Korean inheritance deductions

Many Korean families remember that the KRW 500 million lump-sum deduction plus the KRW 500 million spouse minimum shelters roughly KRW 1 billion.
That rule of thumb fails when large lifetime gifts were made to children, when a will leaves property to grandchildren, or when every child renounces so that grandchildren inherit.
Article 24 of the Inheritance and Gift Tax Act limits the total of inheritance deductions.
Grandchildren’s shares also attract the Article 27 generation-skipping surcharge, and gifts added back are subject to the Article 28 gift tax credit limit.

Enter the gross estate, debts, funeral costs and added-back gifts, and the calculator works through the taxable value, total deductions, the Article 24 limit, the deductions cut by the limit, the surcharge, the gift tax credit and the 3% filing credit to reach the final inheritance tax.
With the same inputs it also recalculates an agreed partition, gifts outside the add-back window and no lifetime gift, so you can compare which choice lowers the family’s total tax.

This calculator is based on Korean rules: the 2026 Inheritance and Gift Tax Act for resident decedents, verified through the National Law Information OPEN API on 2026-10-28.
Default values are a fictional example, not a real case or a national average.

Article 24 deduction limit: three reductions

Deduction limit = taxable value − (item 1 + item 2 + item 3)

Applied deductions = min(total deductions, limit); deductions cut = total − applied

Item 1: non-first-rank bequests

Property bequeathed or given causa mortis to someone who is not a first-rank heir.
Typical cases are wills leaving property to grandchildren, daughters- or sons-in-law, siblings or third parties while the children are alive.

Item 2: shares after renunciation

Property received by the next-rank heirs because first-rank heirs renounced.
Examples are grandchildren inheriting in their own right after all children renounce, or parents and siblings inheriting.

Item 3: added-back gifts

Added gifts less the gift exemption claimed at the time, including the marriage or childbirth exemption.
It applies only when the taxable value exceeds KRW 500 million.

The cap covers the basic deduction (Article 18), family-business and farming deductions, the spouse deduction (Article 19), other personal deductions (Article 20), the lump-sum deduction (Article 21), the financial-asset deduction (Article 22), the disaster-loss deduction (Article 23) and the cohabiting-house deduction (Article 23-2).
However many deductions you claim, they cannot shelter property that went to grandchildren or third parties or that was already given away.
Deductions follow what the heirs actually keep, so the larger the share leaving the heirs, the larger the cut.

Article 27 generation-skipping surcharge and the substitution exception

When an heir or legatee is a lineal descendant other than the decedent’s child, such as a grandchild or great-grandchild, 30% of the computed tax multiplied by that person’s share is added.
The rate is 40% when the grandchild is a minor and the inherited property exceeds KRW 2 billion.
The share includes added-back gifts that the same grandchild received.

Surcharged

Bequests or gifts causa mortis to grandchildren while children are alive
Grandchildren inheriting in their own right after all children renounce
Gifts that grandchild received within 10 years (5 years if only a legatee)

Not surcharged

Substitution inheritance under Civil Act Article 1001 when the parent died first or was disqualified
Inheritance-route surcharge for a grandchild who only received a lifetime gift and takes nothing at death

The calculator uses (grandchild share + that grandchild’s added gifts) ÷ (gross estate + added gifts) as the surcharge ratio.
Debt allocation or different valuations can change the ratio on the actual return, so results flag it as an assumption.
The surcharge is added before the gift tax credit, and the 3% filing credit is computed on tax plus surcharge minus the gift tax credit.

Lifetime gift add-back and the Article 28 gift tax credit limit

Gifts made to heirs within 10 years before death and to non-heirs within 5 years are added back to the taxable value (Article 13).
These gifts reduce the deduction limit under Article 24(3), while the gift tax paid at the time is credited under Article 28.
The credit itself is capped.

Gift tax credit = min(total gift tax computed at the time, computed inheritance tax × added gifts’ tax base ÷ inheritance tax base)

No credit applies when the taxable value is KRW 500 million or less or when the gift tax was never assessed because the period expired.

Article 26 Korean inheritance tax rates and progressive deductions, in KRW
Tax base	Rate	Progressive deduction
Up to KRW 100 million	10%	0
KRW 100 million to 500 million	20%	10,000,000
KRW 500 million to 1 billion	30%	60,000,000
KRW 1 billion to 3 billion	40%	160,000,000
Over KRW 3 billion	50%	460,000,000

If the gift was taxed in the 10% or 20% bracket but the inheritance tax falls in the 40% bracket, the extra inheritance tax caused by the add-back can exceed the credited gift tax.
Conversely, a small estate means a small tax base and a low credit limit, so part of the gift tax already paid may not be credited.
The effect of a lifetime gift can reverse depending on the time until death and the estate size, which is why the scenarios matter.

Why to consider an agreed partition instead of renunciation

Children often all renounce so that their mother receives everything.
Under Supreme Court decision 2020Geu42, when all children of a decedent with a surviving spouse renounce, the spouse becomes the sole heir.
Article 21(2) then denies the KRW 500 million lump-sum deduction and allows only the KRW 200 million basic deduction plus other personal deductions.
With two children that is KRW 200 million + KRW 100 million = KRW 300 million, KRW 200 million less than the lump sum.

Renunciation

It must be filed with the family court and generally cannot be revoked.
If every first-rank heir renounces, the estate passes to grandchildren or parents as the next rank, which can trigger Article 24(2) and the Article 27 surcharge.

Agreed partition

Everyone stays a co-heir and the partition agreement gives the property to one person.
The spouse is not the sole heir, so the lump-sum deduction survives, and nothing passes to a subsequent rank, so the limit is not reduced.

Scenario B recalculates as if first-rank heirs took the grandchild, non-first-rank and subsequent-heir shares by agreed partition.
If you choose the spouse as the recipient, those shares are added to the spouse’s actual inheritance within the spouse deduction limit.
When debts exceed assets, inheriting debt is the bigger risk, so decide on renunciation or qualified acceptance first.

Fictional example: KRW 1.5 billion estate and a KRW 500 million grandchild bequest

Assume a KRW 1.5 billion gross estate, KRW 100 million of debts, KRW 10 million of funeral costs, a spouse who actually inherits KRW 500 million, two children and KRW 100 million of net financial assets.
A will leaves KRW 500 million to an adult grandchild, and four years ago a child received KRW 600 million, claimed a KRW 50 million exemption and had computed gift tax of KRW 105,000,000.

The taxable value is KRW 1.5 billion − KRW 110 million + KRW 600 million = KRW 1,990,000,000.
Total deductions are lump sum KRW 500 million + spouse KRW 500 million + financial KRW 20 million = KRW 1,020,000,000.
Article 24 reductions are item 1 KRW 500 million + item 3 KRW 550 million, so the limit is KRW 940,000,000 and KRW 80,000,000 of deductions are cut.
On a KRW 1,050,000,000 tax base, the computed tax is KRW 260,000,000, the surcharge KRW 18,571,428, the gift tax credit KRW 105,000,000 and the filing credit KRW 5,207,142.
Final tax is KRW 168,364,286; without the limit it would be KRW 138,225,000, so the limit adds KRW 30,139,286.

Fictional example: taxable value, applied deductions, tax base, inheritance tax and family burden by scenario, in KRW
Scenario	Taxable value	Applied deductions	Tax base	Inheritance tax	Family burden
A Current plan (grandchild bequest, gift four years ago)	1,990,000,000	940,000,000	1,050,000,000	168,364,286	273,364,286
B Agreed partition (children take the grandchild share)	1,990,000,000	1,020,000,000	970,000,000	122,220,000	227,220,000
C Gift made more than 10 years earlier	1,390,000,000	890,000,000	500,000,000	96,030,000	201,030,000
D No lifetime gift	1,990,000,000	1,020,000,000	970,000,000	240,075,000	240,075,000

Family burden is inheritance tax plus the gift tax on prior gifts.
Here, replacing the grandchild bequest with an agreed partition saves KRW 46,144,286, but passing the property on to the grandchild later triggers separate gift tax.
If ten years had passed since the gift, the burden would be the lowest at KRW 201,030,000, while the current plan with death four years later costs KRW 33,289,286 more than making no gift.

Step-by-step use

Enter the gross estate excluding prior gifts but including bequests, then public charges and debts and funeral costs.
Direct funeral costs are adjusted to KRW 5 million to 10 million and charnel costs are capped at KRW 5 million.
Enter whether a spouse survives or renounced, the amount the spouse actually inherits, the number of children including those who renounced, and minor, senior and disability deduction inputs.
Select spouse-sole inheritance when all children renounced.
Add each grandchild and choose bequest, own-right inheritance after renunciation or substitution inheritance, plus minor status.
Enter other non-first-rank bequests and subsequent heirs’ shares separately.
Enter added-back gifts by recipient with the exemption claimed and the gift tax computed at the time, copied from the gift tax return.
Calculate, review the scenario A limit breakdown and the family burden of scenarios B, C and D, then save the checklist and TXT for your tax adviser.

Changing inputs hides earlier results, so recalculate before saving.
A withheld message does not mean zero tax; it means the input combination must be corrected first.

Families who need this comparison

A will includes a grandchild bequest

The grandchild’s share reduces the limit and carries a 30% surcharge.
While the will can still be changed, compare inheriting through the children and gifting later.

Children want the mother to receive everything

All children renouncing can make the spouse the sole heir and remove the lump-sum deduction.
Check the agreed-partition scenario before filing renunciations.

A large gift was made in recent years

The added gift cuts the limit and the gift tax credit may hit its cap.
Use the ten-year and no-gift scenarios to test the real effect of the lifetime gift.

Renunciation is considered because of debt

If debts exceed assets, inheriting debt matters more than tax.
Decide on renunciation or qualified acceptance first, then use this calculator if property remains.

Withheld results and scope limits

A surviving, non-renouncing spouse combined with grandchildren inheriting by renunciation conflicts with decision 2020Geu42 and is withheld.
Non-resident decedents, spouse inputs without a spouse, shares exceeding the gross estate and gift rows pointing to removed grandchildren are not calculated.
Per-heir Article 28(2) allocation, family-business and farming deduction requirements, valuation, appraisal fees, installment or in-kind payment, foreign tax and short-term re-inheritance credits and penalties are out of scope.
Counting renounced children for the child deduction, the KRW 500 million minimum for a spouse who renounced and the surcharge denominator are flagged as assumptions to confirm.

A spouse deduction above KRW 500 million requires partitioning and registering the spouse’s share within nine months after the filing deadline.
The calculator does not decide renunciation deadlines or validity, or whether wills and partition agreements are valid.

Frequently asked questions

Why are my deductions not subtracted in full?

Article 24 of the Korean Inheritance and Gift Tax Act caps the total of the basic, spouse, lump-sum, financial-asset, cohabiting-house and similar deductions.
The cap is the taxable value minus bequests to non-first-rank persons, property that subsequent heirs received because first-rank heirs renounced, and, when the taxable value exceeds KRW 500 million, added-back gifts less their gift exemptions.
Any deduction above the cap is lost.

Does a child renouncing always increase inheritance tax?

No.
If only some children renounce, their shares go to the spouse and the other children, who are heirs of the same rank, so Article 24(2) does not apply.
The limit shrinks when every first-rank heir renounces and grandchildren, parents or siblings inherit as the next rank.
If a spouse survives, all children renouncing makes the spouse the sole heir, which removes the lump-sum deduction instead.

With a surviving spouse, do grandchildren inherit when all children renounce?

The Supreme Court en banc decision 2020Geu42 of March 23, 2023 held that when all children renounce, the surviving spouse becomes the sole heir.
The calculator withholds results if a surviving, non-renouncing spouse is entered together with grandchildren inheriting by renunciation.
If the spouse also renounced, that decision does not settle who inherits, so confirm the heirs separately.

How large is the surcharge on a bequest to a grandchild?

Under Article 27, 30% of the computed inheritance tax multiplied by the grandchild’s share is added.
It becomes 40% when the grandchild is a minor and the inherited property exceeds KRW 2 billion.
No surcharge applies when the grandchild inherits by substitution because the parent died first.

Are gifts from ten years ago added back again?

Gifts to heirs within 10 years before death and gifts to non-heirs within 5 years are added back.
Older gifts drop out of the taxable value and of Article 24(3).
Gift tax already paid is not refunded, so scenario C keeps it in the family burden.

Can part of the gift tax credit be lost?

Article 28 credits the gift tax computed at the time of the gift, but only up to the computed inheritance tax multiplied by the added gifts’ tax base divided by the inheritance tax base.
No credit applies when the taxable value is KRW 500 million or less or when the gift tax was never assessed because the assessment period expired.

Does renunciation increase the spouse deduction limit?

The statutory share in the Article 19 formula is the spouse’s share as if nobody had renounced.
Even if a child’s renunciation enlarges the spouse’s actual share, the spouse deduction limit does not grow.
The calculator therefore counts children who renounced when it derives the statutory share.

Should I withdraw a renunciation or change the partition based on the result?

The calculator compares tax only.
Renunciation has a court filing period and generally cannot be revoked, and an agreed partition needs every co-heir’s consent and timely registration.
Show the saved TXT to a Korean tax adviser or lawyer before changing a will or a partition plan.

Official sources and reference date

Laws were checked directly through the National Law Information OPEN API search and article endpoints on 2026-10-28.
Inheritance and Gift Tax Act MST276123 was promulgated on 2025-10-01 and is current from 2026-01-02; Articles 13, 19 to 28, 53 and 69 have article effective dates of 2025-10-01.
Enforcement Decree MST290845 is effective from 2026-10-01, including Article 9(2) on funeral costs and Article 17(1) on the spouse deduction estate value.
Supreme Court en banc decision 2020Geu42 of March 23, 2023 (precedent ID 234385) supports the spouse-sole inheritance treatment.

When the law changes, recheck deduction amounts, rates, add-back periods, surcharge rates and the Article 24 limit items.

Compare scenarios before filing a renunciation or changing a will

A renunciation is hard to undo and a bequest cannot be changed after death.
Save the scenario comparison as TXT and bring it to the family meeting and your tax adviser so the partition, will change or gift decision can be explained in numbers.
If debt drives the decision, continue with the renunciation and qualified acceptance calculator; for the basic tax size, use the gift and inheritance tax calculator.

Korean Inheritance Deduction Limit Calculator: Prior Gifts and Renunciation

1. Estate and deduction inputs

2. Spouse and personal deductions

3. Shares going to grandchildren, non-first-rank persons and subsequent heirs

4. Lifetime gifts added back to the estate

5. Agreed-partition scenario

Deduction limit and scenario comparison