Wednesday, January 15, 2014
In Korea, when a spouse dies intestate, his estate is divided leaving his wife with a share 50 percent larger than each child. Now, the government is trying to change inheritance laws by proposing a new law that permits the surviving spouse to receive more assets from their deceased partner and pay less inheritance tax. Under this proposal, the husband would leave 50% of his assets to his wife without considering the number of children. The other 50% would be split among the children equally. These changes are to protect surviving spouses from financial difficulties.
However, this new system may accomplish the opposite, under current Korean inheritance law a surviving spouse pays the inheritance tax. This causes the funds to be double taxed when they are transferred to the children. If the surviving spouse can receive more of the deceased’s estate, a larger amount of funds will be subjected to a double tax. To avoid the double taxation problem, the government may exempt spouses from paying an inheritance tax altogether.
See Choi Hyun-Chul, Proposed Inheritance Law Would Help Spouses, Korea JoonGang Daily, Jan. 13, 2013.