What does a bargain purchase or premium sale transfer?
A Korean family property sale or unlisted-share transaction can require gift-tax review even when the agreed consideration is actually paid.
In a bargain purchase, the buyer benefits from paying below market value; in a premium sale, the seller benefits from receiving above market value.
This tool applies Korea’s Inheritance and Gift Tax Act Article 35 to separate the price gap, relationship-specific threshold and statutory gift benefit.
A single claim about being allowed a KRW 300 million discount does not cover every transaction.
Related-party status, verified market value and a justifiable commercial reason for unrelated parties change the analysis.
Use the review before agreeing a price or to identify missing records before filing.
The existence of a price gap alone does not establish a final tax liability.
Korean 2026 rules and date scope
Official sources were verified on 2026-10-02 using the Decree effective 2026-10-01.
The supported transaction and planning dates are 2026-10-01 through 2026-12-31.
Other dates remain pending; historical provisions and later amendments are not reconstructed automatically.
Recheck amendments before carrying out a planned transaction, including one later in 2026.
This English page uses Korean rules and shares the Korean calculator’s actual calculation engine.
Inputs and evidence to prepare
Market value and actual consideration
V is the value on the gift date determined under Articles 60–66.
It may differ from asking price, book value or a public valuation.
C is the verified actual consideration, considering the payment records and the structure of any assumed debt, rather than simply copying a contract figure.
Complex encumbered transfers and separately gifted purchase funds need their own review.
Relationships and factual confirmation
Related parties can include economic or management-control relationships as well as family relationships; check Decree Article 2-2.
For unrelated parties, review the commercial circumstances before confirming that no justifiable reason exists.
A numerical discount does not decide that factual question.
Unknown facts are kept separate from a zero benefit.
Values and prices accept whole KRW from 1 to 1 trillion, including comma-separated input.
This maximum is a software support range, not a statutory limit.
Use a general gift review for a transfer without consideration.
The initial KRW 1 billion and KRW 600 million amounts are fictional examples, and factual confirmations start unverified.
Separate the threshold from the subtraction
For a bargain purchase, G = max(0, V − C); for a premium sale, G = max(0, C − V).
The selected direction can show no benefit while the opposite party requires review.
The gap percentage uses market value as the denominator, not the transaction price.
Relationship-specific price-gap thresholds and benefit subtractions| Relationship | Threshold K | Benefit subtraction | Additional condition |
|---|
| Related parties | min(V × 30%, KRW 300,000,000) | Same as K | G ≥ K |
| Unrelated parties | V × 30% | KRW 300,000,000 | G ≥ K and no justifiable reason |
Gift benefit B
For related parties: B = max(0, G − min(V × 30%, 300,000,000)).
For unrelated parties, with no justifiable reason and G ≥ V × 30%: B = max(0, G − 300,000,000).
The roles of 30% and KRW 300 million differ between the two branches.
Meeting the threshold does not always leave a positive benefit after subtraction.
Step-by-step use
- Select the buyer’s bargain-purchase benefit or the seller’s premium-sale benefit and enter the verified statutory transfer date.
Settlement normally governs; check exceptions under Decree Article 26(5).
- Enter market value from the valuation evidence and verified consideration.
Distinguish preliminary agreements, final settlement and payments for other assets.
- Check the relationship, excluded property and Article 35(3) exception.
For unrelated parties, confirm the commercial-reason finding from evidence or leave it unknown.
- Review preceding-year similar transactions and overlapping gift provisions.
The independent single-transaction calculation cannot finalize a case requiring aggregation or multiple provisions.
- Compare two alternative prices and an optional market-value range.
If you need a tax comparison, verify prior aggregate tax base and remaining basic deduction before saving the review.
Worked examples and legal boundaries
Related parties: V = KRW 1 billion, C = KRW 600 million
The gap is KRW 400,000,000; the threshold and subtraction are KRW 300,000,000.
Once the other conditions are confirmed, the benefit is KRW 100,000,000.
For an ordinary resident with verified prior base zero and remaining basic deduction KRW 50,000,000, the added tax base is KRW 50,000,000 and incremental assessed tax is KRW 5,000,000.
Final payable tax requires separate adjustments.
A 15.5% gap can pass the related-party test
V = KRW 2 billion and C = KRW 1.69 billion gives G = KRW 310,000,000, or 15.5% of market value.
Related parties use the smaller KRW 300 million threshold and have a KRW 10,000,000 benefit.
The same unrelated-party transaction fails the 30% threshold of KRW 600 million.
Do not import the 5% corporate unfair-transaction test into this personal gift-benefit calculation.
Threshold met but benefit zero
For unrelated parties with no justifiable reason, V = KRW 500 million and C = KRW 300 million produces a KRW 200,000,000 gap, above the KRW 150,000,000 threshold.
Subtracting KRW 300 million leaves zero benefit.
For related parties, V = KRW 1 billion and C = KRW 700,000,000 exactly meets the threshold but also leaves zero benefit.
C = KRW 700,000,001 instead falls below the threshold; these statuses are different.
Premium sale: V = KRW 1 billion, C = KRW 1.4 billion
For a confirmed ordinary related-party transaction, the seller’s gift benefit is KRW 100,000,000.
Changing consideration to KRW 1.3 billion meets the threshold with zero benefit.
Entering this transaction in bargain-purchase mode shows no benefit for the selected buyer direction.
Check the party and direction before interpreting the result.
Compare prices and market-value evidence
For related parties at V = KRW 1 billion, prices of KRW 600, 700 and 800 million give benefits of KRW 100 million, zero and zero.
The KRW 700 million case meets the threshold with no remaining benefit; the KRW 800 million case is below the threshold.
Read the status column as well as the amount.
Market-value sensitivity
Holding consideration at KRW 600 million, market values of KRW 900 million, 1 billion and 1.1 billion produce related-party benefits of KRW 30,000,000, 100,000,000 and 200,000,000.
At KRW 900 million, 30% means a KRW 270 million subtraction; from KRW 1 billion, the smaller limit is KRW 300 million.
Your lower and upper values describe the evidence being reviewed, not an automatic appraisal or probability.
The scenarios assume the same relationship, commercial reason, trading method and exclusions.
Interpret pending, excluded and zero results
- Insufficient information: dates, valuation, relationship, reason, exclusions or transaction aggregation are unverified.
An unknown benefit or tax is not shown as zero.
- Excluded or conditions not met: the entered case does not meet this provision’s conditions.
Other gift provisions or taxes may still apply.
- Below threshold or zero after subtraction: the two numerical outcomes are reported separately.
A changed valuation or required aggregation can change the result.
- Gift benefit requiring tax review: a positive statutory benefit exists under the verified assumptions.
Continue with individual deductions, prior gifts, filing and credits.
Fractional-KRW 30% values and inclusive legal boundaries are compared before rounding.
The display’s two-decimal rounding and thousand separators do not change the assessment.
Official return rounding and credits require separate calculation.
Prior gifts and incremental assessed tax
Let P be the verified prior aggregate tax base, D the remaining basic deduction and B the reviewed benefit.
Added tax base is max(0, B − D), and ΔT = T(P + max(0, B − D)) − T(P).
T uses the 10%, 20%, 30%, 40% and 50% progressive rates under Articles 56 and 26.
Tax bases below KRW 500,000 are not charged under Article 55(2); exactly KRW 500,000 is outside that exemption.
Verify aggregation and deduction balances
Article 47(2) aggregates gifts from the same donor in the preceding ten years when their combined value is at least KRW 10 million; a lineal ascendant’s spouse is included in that donor unit.
For residents, Article 53 basic deduction limits are KRW 600 million for a spouse, KRW 50 million from lineal ascendants (KRW 20 million for a minor), KRW 50 million from lineal descendants and KRW 10 million from qualifying other relatives, subject to the ten-year balance.
Related-party status alone does not establish eligibility for a family deduction.
Article 53-2(4) excludes Article 35 benefits from the special marriage/childbirth deduction.
With P = KRW 90,000,000, D = zero and B = KRW 100,000,000, incremental assessed tax is KRW 19,000,000.
This compares the rate effect while holding the prior base fixed; it is not final tax after subtracting actual past payments.
Review Article 58 prior assessed-tax credits and their cap, filing credits, generation-skipping surcharges, nonresidents, appraisal fees, foreign-tax credits and penalties separately.
The tax comparison stays pending until its assumptions are confirmed.
Excluded assets, repeated transactions and practical limits
Before splitting a transaction
Article 43(2) requires aggregation of price gaps for the relevant benefit when identical transactions occurred within the preceding year.
Do not treat separate contracts as allowing a fresh subtraction for every entry.
Article 43(1) also addresses overlapping gift provisions.
This calculator assesses one independent transaction after those issues have been reviewed.
Decree Article 26(1) excludes convertible securities and prescribed market trades, while other gift rules may require review.
The 2026 text includes qualifying multilateral trading-company methods; not all off-market or after-hours listed-share trades receive the same treatment.
For the Article 35(3) exception, verify corporate-law market value, the applicability of tax adjustments and the proviso for fraudulent inheritance/gift-tax reductions.
Prepare the contract, settlement and debt records, dated valuation evidence, family and economic relationship records, prior gift returns and deduction schedules.
Organize evidence by party, asset and date, with sources for the lower and upper market values.
Changing the main value, consideration or date clears valuation confirmation; other input changes clear tax-assumption confirmation.
Save the confirmation states together with the price comparison.
Frequently asked questions
Is the entire family-sale discount a taxable gift?
For an ordinary related-party transaction, Article 35 subtracts the smaller of 30% of market value and KRW 300 million from the price gap.
The price gap, statutory gift benefit and post-deduction tax base are different amounts.
Verify market value and the actual sale before using the formula.
Does a KRW 300 million gap trigger unrelated-party taxation?
Unrelated transactions require no justifiable commercial reason and a gap of at least 30% of market value.
KRW 300 million is then subtracted from the benefit.
A KRW 2 billion asset sold for KRW 1.69 billion has a KRW 310 million gap but only a 15.5% difference, below the 30% threshold.
What happens exactly at 30% or KRW 300 million?
Equality meets the applicable threshold.
For related parties, a gap equal to the threshold leaves zero benefit after subtraction.
For unrelated parties, the 30% threshold and fixed KRW 300 million subtraction are separate: a threshold-matching gap can leave either zero or a positive benefit.
Can the marriage or childbirth deduction be added?
Article 53-2(4) excludes these statutory gift benefits from the special marriage and childbirth deduction.
Enter only the verified remaining basic deduction under Article 53.
Being near marriage or childbirth does not make the special deduction available for an Article 35 benefit.
Are all listed-share transactions excluded?
No.
Check the trading methods specified in Decree Article 26(1), including qualifying securities-market and multilateral trading-company transactions.
The provision distinguishes after-hours trades.
Convertible securities may require a separate review under Article 40.
Should I enter the contract date or settlement date?
The settlement date normally applies, with statutory registration and other exceptions under Decree Article 26(5).
Exceptional circumstances such as a sharp exchange-rate movement can make the contract date relevant.
Enter the legally verified date; the calculator does not decide which date your documents establish.
Can I enter all earlier gifted cash as the prior tax base?
The prior aggregate tax base is the verified amount after deductions, not the total cash originally received.
Check the same-donor rules, ascendants’ spouses, preceding ten years and KRW 10 million aggregation threshold.
Do not automatically combine gifts from different donors or aggregation-excluded property.
Does a zero result mean no filing or other tax?
No.
A zero Article 35 benefit or a gap below its threshold does not determine all filing obligations or taxes.
Review the actual nature of the transfer, capital gains tax, acquisition tax, effective-date rules and other gift provisions.
Pending and excluded results must not be read as zero tax payable.
Official sources and update dates
Current status and article text were checked directly through the National Law Information OPEN API on 2026-10-02.
The Act is MST276123, Act No. 21065, promulgated 2025-10-01; Article 35 and the reviewed provisions show an article effective date of 2025-10-01.
The search-level 2026-01-02 effective date concerns the partial commencement of Article 50, not a new Article 35 rule.
The Decree is MST290845, Presidential Decree No. 36741, promulgated and effective 2026-10-01.
- Inheritance and Gift Tax Act Article 35: bargain purchases, premium sales and paragraph 3 exclusions.
- Decree Article 26: 30%, KRW 300 million, excluded assets and transfer dates.
- Act Article 43: preceding-year aggregation and overlapping provisions.
- Act Article 53-2(4): exclusion from the marriage/childbirth special deduction.
Articles 47, 53, 55, 56, 26, 58 and 60 and Decree Article 2-2 were also verified.
Prepare a price-by-price review
Compare valuation evidence and actual payment plans before deciding a transaction price.
TXT export or print/save PDF records your inputs, law version, pending facts and tax assumptions.
Take the review and supporting records to a Korean tax adviser to verify transaction-date law, filing obligations and each party’s taxes.
The result does not recommend a price or establish legal market value.