Compare shareholder economic transfers and conditional gift benefits from Korean unlisted-share issues and cancellations, including lapsed rights, related parties and threshold tests under 2026 rules.
Planned shares include unissued lapsed shares in unallocated mode. In reallocation mode, distinguish own-right subscriptions from reallocated shares. All monetary inputs are KRW.
Do not combine different donors into one tax base. Use one verified tax unit after reviewing 10-year aggregation, small-donor grouping and past deductions. Prior taxable base is not gross prior gifts.
Do not combine different donors into one tax base. Use one verified tax unit after reviewing 10-year aggregation, small-donor grouping and past deductions. Prior taxable base is not gross prior gifts.
Select each pair that qualifies as related parties under Korean tax law. Family names and indirect relationships are not inferred.
Theoretical value after
7,500 KRW
Total positive economic transfer
12,500,000 KRW
Conditional gift-benefit total
Pending review
The pro-rata comparison using the same actual volume produces zero economic benefit. Theoretical value is not an appraisal. The 30% / KRW 300 million tests are not deductions.
Gift benefits and tax remain pending until scope and repeat-transaction checks are confirmed. Formula amounts below are not assessed taxable amounts.
Facts / repeat transactions need review
Major-holder reference using pre-transaction register: Yes
Facts / repeat transactions need review
Major-holder reference using pre-transaction register: Yes
Incremental gross tax compares progressive tax on prior and combined taxable bases. Filing credits, generation-skipping surcharges, actual prior-tax credits, penalties and cancellation deemed dividends are separate. Confirm donor attribution and small-donor grouping with a Korean tax adviser.
A family company may issue shares to raise cash or cancel shares to return capital, with shareholders participating in different proportions.
Issuing shares below their value to selected investors or cancelling another shareholder’s shares cheaply can transfer value without a conventional gift agreement.
A change in ownership percentage alone does not measure that transfer: cash paid or received and the value per remaining share also matter.
This calculator applies Korean rules for 2026 and takes an already confirmed valuation as an input.
It compares economic gains and losses with the benefit formulas in the Inheritance Tax and Gift Tax Act.
It is designed to prepare a shareholder review before a transaction, rather than determine a company’s market value or complete a tax return.
Use one cash capital increase or paid capital reduction with a common price per share.
The four modes are full reallocation of lapsed rights, no reallocation, direct outsider or excess allotment, and paid cancellation.
Listed shares, preferred or convertible shares, in-kind contributions, unpaid cancellation, treasury-share arrangements, mergers and combined transactions are outside scope.
Prepare total issued shares, each holding, subscribed or cancelled quantities, par value, the confirmed pre-transaction value, and related-party evidence.
New investors have zero pre-transaction shares.
Each relationship is an explicit pair: names and indirect links do not establish a tax relationship automatically.
The interface supports 2–8 shareholders and integer shares and KRW amounts.
Do not omit holders or combine unrelated holders to fit the limit.
Limits of 10 million shares, KRW 100 million per-share inputs and KRW 1 trillion prior tax base or deduction are software limits, not legal ceilings.
A reduction must leave positive shares and a positive modeled company value.
Pro-rata entitlement equals the holder’s old shares multiplied by planned new shares, divided by the company’s old shares.
Fractional entitlements are rejected instead of rounded silently.
Have the company’s fractional-share policy and actual resolutions checked before proceeding.
N is the old total share count, V the old value per share, P the common transaction price, and A the actual number issued or cancelled.
A holder has n old shares and subscribes for or cancels a shares.
These gains include the cash subscription or cancellation payment.
Across all shareholders, gains and losses sum to zero apart from numerical precision.
Allocating the same actual transaction volume pro rata gives zero economic benefit for every holder.
A statutory benefit can differ from net economic gain because the legislation defines benefits by the type of rights waiver or allotment; the calculator does not offset one against the other.
Act Article 39(1)1(a), (c) and (d), with Decree Article 29(2)1, use the post-increase value less issue price, multiplied by the reallocated shares or qualifying direct new shares.
For an existing holder’s direct allotment, only shares exceeding equal entitlement are used; for an outsider, all directly allotted shares qualify.
Neither a related-party requirement nor a general 30% / KRW 300 million exclusion is added to these branches.
Act Article 39(1)1(b) and Decree Article 29(2)2 first compute full-subscription value: Qfull = (V × N + P × M) ÷ (N + M), where M is planned new shares.
For a shareholder who actually subscribes, the formula is (Qfull − P) × that subscriber’s post-increase ownership × lapsed shares of their related parties.
The amount qualifies if the per-share difference is at least 30% of Qfull or the calculated benefit is at least KRW 300 million.
This branch does not automatically assign a benefit to a holder who subscribes for no new shares.
If B subscribes for 10,000 shares including 5,000 reallocated shares, enter 10,000 and 5,000, not two quantities to be added together.
Partial reallocation combined with unissued lapsed shares is outside the automatic model.
Paying more than fair value can increase the value held by existing shareholders.
Act Article 39(1)2 considers benefits received by related parties of the overpriced subscriber, including holders who waive or receive less than their entitlement.
Merely being shareholders in the same company does not establish a related-party relationship.
Only the unallocated branch here requires the difference to reach 30% of actual post-increase Q or the benefit to reach KRW 300 million.
The direct formula uses related subscribers’ new shares in its numerator and outsider/excess shares in its denominator; these quantities must not be replaced with the same measure.
When the statutory amount differs from net economic gain, review the actual allotment rather than manually netting the amounts.
Under Act Article 39-2 and Decree Article 29-2, a related major shareholder’s formula is (V − P) × their post-reduction ownership × shares cancelled by their related parties.
Remaining a shareholder is insufficient by itself: related-party and major-holder conditions matter.
The cancelled holder’s formula is (P − V) × their cancelled shares, subject to having a related major shareholder.
The additional condition is V < min(par value, P).
The valuation must be below par, or below the payment if that payment is lower than par.
An above-value payment alone does not establish all conditions.
Decree Article 28(2) defines a major shareholder by holdings including related parties: at least 1% ownership or at least KRW 300 million aggregate par value.
The interface provides a reference calculation from the old register; confirm relationships and the legally relevant assessment date.
For reductions, a difference of at least 30% of V makes the threshold zero; otherwise the benefit threshold is KRW 300 million.
Equality at either boundary qualifies, and KRW 300 million is not subtracted from a qualifying benefit.
Assume N = 10,000, V = KRW 10,000, P = KRW 5,000 and M = 10,000.
A and B each own 5,000 old shares; A subscribes for none, and B takes all 10,000 new shares, including 5,000 reallocated shares.
Q is KRW 7,500, so B’s statutory amount is KRW 2,500 × 5,000 = KRW 12,500,000.
B’s economic gain and A’s economic loss have the same magnitude.
If A’s 5,000 shares remain unissued and B takes only their 5,000-share entitlement, actual Q is approximately KRW 8,333.33 and Qfull remains KRW 7,500.
When A and B are related, B’s economic benefit and statutory formula amount are each approximately KRW 8,333,333.33.
The per-share difference is about 33.33% of Qfull and meets the 30% test.
With P = KRW 20,000 in the first reallocation example, Q becomes KRW 15,000 and related waiving holder A has a KRW 25,000,000 statutory amount.
If the high-price shares remain unallocated and B subscribes for only 5,000, A’s amount is approximately KRW 16,666,666.67.
If A instead cancels all 5,000 old shares at KRW 5,000, B’s remaining shares are worth KRW 15,000 each and related major holder B has a KRW 25,000,000 benefit.
A separate high-price cancellation example uses V = KRW 1,000, par = KRW 5,000, P = KRW 1,500 and 2,000 cancelled shares, producing KRW 1,000,000 for the cancelled holder if the conditions are met.
Different donors must not be combined indiscriminately into one progressive tax base.
Act Article 47(2) requires reviewing gifts from the same person over 10 years when the relevant total reaches KRW 10 million; a lineal ascendant’s spouse is included in that donor rule.
Act Article 39(2) and Decree Article 29(5) also group two or more qualifying small-shareholder donors as one: each holds less than 1% and less than KRW 300 million in par value.
A related-party pair and a gift-tax donor unit are not interchangeable concepts.
B is verified prior taxable base, G is this conditional benefit, and D is the additional deduction available for it.
B is not the gross amount of previous gifts.
With B = 0 and no deduction, G = KRW 12,500,000 gives KRW 1,250,000; with B = KRW 100,000,000, the same additional benefit gives KRW 2,500,000.
Act Articles 55, 56 and 26 provide no tax below a KRW 500,000 base, then progressive rates of 10%, 20%, 30%, 40% and 50% with boundaries at KRW 100 million, 500 million, 1 billion and 3 billion.
The estimate excludes actual prior-tax credit limitations, filing credits, generation-skipping surcharges, appraisal fees, penalties and cancellation deemed-dividend income tax.
Act Article 43(2) can aggregate benefits from same transactions within the preceding year, changing threshold outcomes.
When that applies, leave the no-repeat confirmation unchecked and provide all transactions to an adviser.
Unconfirmed statutory benefits and taxes are shown as pending, never as zero tax.
No.
Low-price reallocation and direct outsider or excess allotment do not have a general related-party exclusion.
Identify the legal branch first.
No.
Some branches have no such threshold, and others qualify through the 30% per-share difference.
The amount is not a general deduction.
No.
Do not combine reallocated and unissued lapsed shares under one simplified mode.
Have the mixed structure reviewed separately.
No.
Cash paid and changing per-share value affect economic gain, and the statutory formula may differ again.
Read each result label.
No.
Confirm residency, relationship limits, deductions used in the preceding 10 years and other available relief before entering only the additional available amount.
A mismatched register, excess subscriptions or cancellation, fractional entitlement, or nonpositive modeled value invalidates the current result.
Correct the input to calculate again.
For an unlisted increase it is generally the subscription payment date, with an earlier certificate-delivery exception for reallocated rights.
For a reduction it is the shareholder resolution date approving the reduction.
Per-share values and economic benefits show up to two decimals.
Statutory amounts and tax references are displayed rounded down to whole KRW.
Threshold tests use internal values before display rounding; official filing rounding is separate.
The Korean National Law Information OPEN API was checked on 2026-09-25.
Act ID 001561 / MST 276123 is returned as current with a search effective date of 2026-01-02; the individual Article 39 and 39-2 text records 2025-10-01.
Decree ID 003814 / MST 288887 was promulgated on 2026-08-18 and is effective 2026-09-18.
Historical transactions require the version effective on their own transaction date.
Recheck formulas, eligibility, thresholds, gift dates and rates when these provisions change.
Compare the actual plan with pro-rata participation before fixing the issue or cancellation price.
For family-business succession, review both the investor and the person waiving rights.
For a return of capital, review the cancelled holder’s proceeds and the remaining holders’ value changes together.
Save the TXT report and attach valuation evidence, before-and-after registers, allotment resolutions, payment/cancellation records and previous gifts.
If valuation has not been established, start with the unlisted stock valuation calculator to understand the valuation structure.
Confirm donor attribution and other affected taxes before executing or filing the transaction.