Nominee Stock Deemed-Gift Tax Calculator

Estimate the Korean gift tax on borrowed-name (nominee) stock treated as a deemed gift under Inheritance and Gift Tax Act Article 45-2. Since 2019 the beneficial owner — not the nominal holder — is the taxpayer (Article 4-2(2)). The tax base is the share value itself with no gift deduction (Article 55(1)1), taxed at the 10-50% progressive rate (Articles 56 and 26). A voluntary filing earns a 3% credit (Article 69(2)), while non-filing triggers a 20% or 40% non-filing penalty (Framework Act on National Taxes Article 47-2) plus a 0.022%-per-day late-payment penalty (Article 47-4). Aggregation-excluded, so each case is taxed separately.

Tax scenario inputs

Enter Korea-related tax assumptions in KRW. The model uses a simplified effective-rate estimate.

Taxable base

₩500,000,000

Estimated gross tax

₩100,000,000

Net tax after adjustment

₩100,000,000

After-tax amount

₩400,000,000

Effective rate

20%

This English page is a simplified Korea-related tax planning estimate. It does not reproduce official forms, progressive brackets, exemptions, local surtaxes, filing classifications, or eligibility decisions. Confirm current Korean rules before filing, paying, investing, or restructuring.

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What is the nominee-stock deemed-gift tax?

When you actually own shares but register them under someone else’s name (a family member, an acquaintance, an employee) — so-called “borrowed-name” or nominee stock — Korean tax law treats the value of those shares as a gift from the beneficial owner to the nominal holder and charges gift tax.
The basis is Article 45-2 (deemed gift of title-trust property) of the Inheritance and Gift Tax Act. Because it covers registerable property other than land and buildings, shares are effectively the main target.

Enter the value of the nominee stock, whether there was a tax-avoidance purpose, and the filing status (voluntary filing versus non-reporting that was later detected). The calculator then returns the calculated gift tax, the voluntary-filing credit, the non-filing and late-payment penalties, and the total tax due, under 2026 Korean rules.
Since 2019 the taxpayer is the beneficial owner rather than the nominal holder, so this is useful for estimating the tax the real owner will bear.

Korea-based, 2026 rules. This tool reflects the Inheritance and Gift Tax Act (Articles 45-2, 4-2(2), 47, 55(1)1, 56, 26, 69(2)) and the Framework Act on National Taxes (Articles 47-2 and 47-4 with Enforcement Decree Article 27-4). It is a reference estimate, not a substitute for advice from a Korean tax professional. Whether a tax-avoidance purpose or a fraudulent act exists is a fact-specific question decided case by case.

Why is gift tax charged on nominee stock?

The deemed-gift rule is an exception to the substance-over-form principle (Framework Act on National Taxes Article 14) and is punitive in nature, aimed at blocking tax avoidance.
Spreading shares under other people’s names can avoid the progressive taxation of dividends, the oligopoly-shareholder deemed-acquisition tax and secondary tax liability, and the aggregation of financial income — so the law deems a gift even where none actually occurred.

The 2019 change — the taxpayer shifted

An amendment on 31 December 2018 (effective for deemed gifts from 1 January 2019) shifted the taxpayer from the nominal holder to the beneficial owner.
Previously the person who merely lent their name paid the tax; now the real owner who obtains the benefit pays directly (Article 4-2(2)).

  • • Beneficial owner: the taxpayer. If unpaid, the tax can be collected from the nominee shares themselves (Article 4-2(9)).
  • • Nominal holder (name lender): no longer bears the gift-tax liability.
  • • Tax-avoidance purpose: no tax if there is none (proviso to Article 45-2(1)1), but registering under another’s name is presumed to have such a purpose (paragraph 3).

How is the gift tax calculated?

1. Tax base — no deductions

An ordinary gift subtracts the gift deduction (KRW 600 million for a spouse, KRW 50 million for lineal ascendants/descendants, and so on), but the deemed gift of nominee stock is different.
Under Article 55(1)1, the tax base is “the amount of the title-trust property” itself; neither the gift deduction nor the KRW 30 million allowance given to other aggregation-excluded gifts applies.

💡 In other words, the value of the nominee stock is the tax base. For unlisted shares, use the value assessed by the supplementary valuation method under the Enforcement Decree.

2. Rates — 10–50% progressive

Gift-tax rates are the same five-step progressive schedule as inheritance tax (Article 56 → Article 26).
The calculated tax is “tax base × rate − progressive deduction.”

Tax baseRateProgressive deduction
Up to KRW 100 million10%–
100 million – 500 million20%KRW 10 million
500 million – 1 billion30%KRW 60 million
1 billion – 3 billion40%KRW 160 million
Over 3 billion50%KRW 460 million

3. Voluntary-filing credit or penalties

If the beneficial owner files voluntarily within 3 months of the end of the month containing the deemed-gift date, 3% of the calculated tax is granted as a filing credit (Article 69(2)).
Conversely, if no return is filed and the case is detected (for example, in a tax audit), a non-filing penalty and a late-payment penalty apply.

  • • Non-filing penalty: 20% of the calculated tax (general) or 40% (fraudulent) — Framework Act on National Taxes Article 47-2.
  • • Late-payment penalty: unpaid tax × 0.022% per day (about 8.03% per year) — Article 47-4 and Enforcement Decree Article 27-4.
  • • Simple nominee holding: generally treated as general non-filing (20%); the 40% rate applies only where a fraudulent act such as active concealment is recognized.

Example: nominee stock of KRW 500 million, detected after 3 years of non-filing (general)

Calculated tax = 500m × 20% − 10m = KRW 90 million
Non-filing penalty = 90m × 20% = KRW 18 million
Late-payment penalty = 90m × 0.022% × 1,095 days ≈ KRW 21.68 million
Total tax due ≈ KRW 129.68 million

How to use the calculator

Step 1: Enter the share value

Enter the assessed value of the shares transferred into the nominee’s name.
For unlisted shares use the supplementary valuation; for listed shares use the average closing price over the two months before and after the valuation date.

Step 2: Choose the tax-avoidance purpose

With a tax-avoidance purpose the case is taxed; without one it is exempt.
Registering under another’s name is presumed to have such a purpose, so the burden of proving there was none falls on the taxpayer.

Step 3: Choose the filing status

Pick voluntary filing, detected non-filing (general), or detected non-filing (fraudulent).
For non-filing, select how many years have elapsed so the late-payment penalty is applied.

Step 4: Review the result

See the tax base, calculated tax, penalties, total tax due, and effective rate.
For a non-filing case, it also shows how much a voluntary filing right now would save.

Frequently asked questions

Q. Who pays — the nominal holder or the beneficial owner?

A. For deemed gifts from 1 January 2019, the beneficial owner is the taxpayer (Article 4-2(2)).
The person who merely lent their name does not pay, and if the real owner fails to pay, the tax can be collected from the nominee shares.

Q. Can I subtract the KRW 50 million gift deduction?

A. No.
For a deemed gift of nominee stock the tax base is the share value itself, and neither the gift deduction nor the KRW 30 million allowance applies (Article 55(1)1).

Q. Is it aggregated with other gifts within 10 years?

A. No.
A deemed gift of nominee stock is aggregation-excluded property, so the 10-year same-donor aggregation does not apply and each case is taxed separately (Article 47).

Q. Is it exempt if there is no tax-avoidance purpose?

A. There is no tax without such a purpose (proviso to Article 45-2(1)1).
But because registration under another’s name is presumed to have a purpose (paragraph 3), the taxpayer must prove otherwise with objective evidence.

Q. If I sell the nominee stock and re-buy under the same name, is it taxed again?

A. Courts have held that shares re-acquired under the same name with the proceeds of stock already taxed (or taxable) as an initial title trust cannot be taxed again (e.g., Uijeongbu District Court 2024-Guhap-12806).
It is not taxed without limit on every re-registration; the outcome is fact-specific, so seek professional review.

Cautions and saving tips

  • File early: once detected as non-filing, the non-filing penalty (20–40%) and the daily late-payment penalty keep accruing. Voluntary filing also earns the 3% filing credit.
  • Real-owner confirmation program: the National Tax Service’s program for confirming the true owner of nominee shares simplifies proof where the small-business requirements are met, reducing disputes.
  • Manage the valuation: because the unlisted-share value is the tax base, the supplementary valuation (weighted average of net-profit and net-asset value) must be assessed carefully.
  • Fraud or not: a simple nominee holding is usually general non-filing (20%), but active concealment such as borrowed-name accounts or false books can trigger 40%.
  • Long-delay cap: after a payment notice, the late-payment penalty is capped at 5 years (1,825 days) under Article 47-4(4), so a long delay may produce a smaller actual charge than the simple estimate.

Estimate your nominee-stock gift tax now

Enter the share value and filing status to see the gift tax, penalties, and total due at once.

This is a reference estimate under 2026 Korean rules; consult a Korean tax professional for actual filing or appeals.