Foreigner(Non-Resident) Family Needs to Pay the Inheritance Tax in Korea?
Questions:
I am writing to seek clarification regarding the inheritance tax laws in Korea, as they pertain to the estate of my late father. He was a pure investor, and part of his portfolio included stocks listed on the Korea KOSDAQ. Upon his passing, we informed the Korean securities company where his account was held, and it was brought to our attention that there might be inheritance taxes due.
Our family, including my father, has never been to Korea, and the notion of having to pay such taxes is quite unbelievable to us. We are seeking to understand if this is indeed the case, and if so, how much tax is due and by when it must be paid.
Answers:
As per Korean inheritance tax law, the distinction is not made between foreigners and nationals but between residents and non-residents. If the deceased was a resident, inheritance tax is imposed on all global assets. For non-residents, only assets located in Korea are included in the taxable estate. Therefore, in our case, inheritance tax would only apply to assets located in Korea, both movable and immovable.
For non-resident inheritors, the tax must be reported within nine months, while residents have a six-month window. The valuation of the estate is based on the date of death, and for amounts exceeding KRW 3 billion, the tax rate is 50%.
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