# Inheritance Tax Calculator

> Calculate Korean inheritance tax with 5-tier progressive rates, deductions (basic/lump-sum, spouse, financial assets, co-residence), and generation-skipping surcharge.

## What is this calculator?

The Inheritance Tax Calculator estimates Korean inheritance tax (상속세) owed when inheriting property from a deceased person. Korean inheritance tax is levied on the total estate when property transfers to heirs or legatees upon the death of the decedent.

Korea uses a 5-tier progressive tax rate structure from 10% to 50%, identical to gift tax rates. The tax base is calculated by subtracting various deductions from the taxable estate value. Major deductions include the basic/lump-sum deduction, spouse deduction, financial asset deduction, and co-residence deduction.

This calculator computes the taxable estate value (total assets minus debts plus prior gifts), applies the chosen deduction method, calculates progressive tax, adds generation-skipping surcharge if applicable, and applies the 3% filing discount to arrive at the final tax due. A bar chart visualizes the tax contribution from each bracket.

Inheritance tax must be filed within 6 months from the end of the month in which the death occurred. All heirs bear joint and several liability for the inheritance tax, each limited to the value of property they received or are entitled to receive.

## How to use

Step 1: Select the deduction method.
• Lump-Sum (500M): A flat 500M KRW deduction. Simpler and usually advantageous when basic + personal deductions total less than 500M.
• Basic + Personal: Basic deduction of 200M KRW plus itemized personal deductions (child, minor, elderly, disability). Better when total personal deductions exceed 300M.

Step 2: Enter total inherited assets.
Include all estate property at fair market value: real estate, financial assets, insurance proceeds, retirement benefits, etc.

Step 3: Enter debts.
Enter the decedent's debts, public charges, and funeral expenses. Funeral expenses are recognized at 5M–15M KRW (plus 5M for urn burial).

Step 4: Enter prior gifts.
Gifts to heirs within 10 years (or to non-heirs within 5 years) before death are added back to the estate.

Step 5: Enter spouse deduction.
Enter the amount actually inherited by the surviving spouse. It will be auto-clamped between 500M and 3B KRW. Enter 0 if no surviving spouse.

Step 6: Enter financial asset deduction.
20% of net financial assets (financial assets minus financial debts), up to 200M KRW maximum.

Step 7: Enter co-residence deduction.
For a one-house household where the heir lived with the decedent for 10+ years: up to 600M KRW.

Step 8: Select generation-skipping surcharge.
If grandchildren or further descendants inherit (skipping a generation), a 30% surcharge applies (40% for minors inheriting over 2B).

## How it's calculated

Inheritance Tax Calculation Flow:
Total Assets - Debts + Prior Gifts = Taxable Inheritance Value
Taxable Value - Total Deductions = Tax Base
Tax Base × Progressive Rate = Calculated Tax
Calculated Tax + Generation-Skip Surcharge - Filing Discount (3%) = Final Tax

Progressive Tax Rates (5 tiers, same as gift tax):
• Up to 100M: 10%
• 100M–500M: 20% (progressive deduction: 10M)
• 500M–1B: 30% (progressive deduction: 60M)
• 1B–3B: 40% (progressive deduction: 160M)
• Over 3B: 50% (progressive deduction: 460M)

Basic Deductions:
• Basic deduction: 200M KRW
• Lump-sum deduction: 500M KRW (choose whichever is greater: basic+personal or lump-sum)

Additional Deductions:
• Spouse: Actual inherited amount, min 500M – max 3B KRW
• Financial assets: 20% of net financial assets, max 200M KRW
• Co-residence housing: 100% of house value for 10+ year co-residence, max 600M KRW

Generation-Skipping Surcharge:
• Standard: 30% of calculated tax
• Minor (estate over 2B): 40% of calculated tax

Filing Discount:
3% of (calculated tax + surcharge) when filed within 6 months of death.

## Useful tips

1. Lump-Sum vs Basic+Personal: In most cases, the lump-sum deduction (500M) is more beneficial. The basic+personal method only wins when you have many children or qualifying dependents (minors, elderly over 65, disabled persons) pushing personal deductions above 300M.

2. Spouse Deduction Strategy: A surviving spouse is guaranteed at least 500M in deductions. By adjusting how much the spouse actually inherits (within the legal inheritance share), you can optimize the overall tax burden. Note: spouse inheritance must be finalized within 9 months after the filing deadline.

3. Prior Gifts and Tax Credits: Gifts to heirs within 10 years are added back to the estate, but gift taxes already paid are credited against inheritance tax. Gifts made more than 10 years before death are excluded, making long-term gift planning valuable.

4. Financial Asset Deduction: The deduction increases with net financial assets (deposits, stocks minus financial debts), capped at 200M. Having net financial assets of 1B+ maximizes this deduction.

5. Co-Residence Deduction Requirements: The heir must have lived in the same house as the decedent continuously for 10+ years, and the heir must be house-less. Despite strict requirements, the maximum 600M deduction makes it well worth claiming when eligible.

## FAQ

### Q. Who pays inheritance tax in Korea?

All heirs bear joint and several liability for inheritance tax. Each heir is liable up to the value of property they received or are entitled to receive. Legatees (recipients under a will) are also liable. In practice, heirs typically share the tax burden proportionally to their inheritance shares.

### Q. Which is better: lump-sum or basic+personal deduction?

The lump-sum deduction (500M KRW) is better when the sum of basic deduction (200M) and personal deductions is less than 500M. If you have many qualifying dependents — multiple children (50M each), minors (10M × remaining years to adulthood), elderly over 65 (50M each), or disabled persons (10M × life expectancy) — the basic+personal method may exceed 500M. Use both tabs in this calculator to compare.

### Q. How does the spouse deduction work?

The spouse deduction is based on the amount the surviving spouse actually inherits, clamped between 500M and 3B KRW. Even if the spouse waives inheritance, a minimum 500M deduction applies (as long as a spouse exists). The spouse's inheritance division must be completed within 9 months after the filing deadline; otherwise only the legal statutory share is recognized.

### Q. Can inheritance tax be paid in installments?

If the tax exceeds 10M KRW, it can be split into two payments within 2 months. If it exceeds 20M KRW, installment payments (연부연납) over up to 5 years are available (up to 20 years for family business succession), requiring collateral. An interest surcharge of approximately 1.2% per year (2024 rate) applies to each installment.

### Q. What's the difference between inheritance tax and gift tax?

Both use the same 5-tier progressive rates (10%–50%), but deductions differ significantly. Inheritance tax offers the 500M lump-sum deduction, spouse deduction up to 3B, and other large deductions. Gift tax exemptions are limited to 600M (spouse) or 50M (adult children). However, strategic early gifts can save tax on future appreciation since gifts are valued at the time of transfer. A combined gift-and-inheritance strategy over the long term is often most effective.