Problems and Improvement Measures of Gift Property Deduction

Currently, the policy direction of the global inheritance and gift tax is changing to promote economic revitalization by promoting the transfer of wealth to the younger generation rather than suppressing the inheritance of wealth. In the case of Korea, there are attempts to follow the global trend to the extent that it does not impair the role of wealth redistribution, but it is true that more research is still needed on the gift tax system. In particular, the gift property deduction of the current gift tax has not been revised since the revision in 2015. Statistics show an increasing trend in both inheritance tax and gift tax, which is increasing their importance in Korea's tax revenue. Under these circumstances, the fact that the gift property deduction has not been revised for nearly 10 years is an issue that makes people feel the need for revision more. In the case of the United States, instead of integrating the deduction limit for estate tax and gift tax by operating the integrated tax credit system, the amount is set large and the amount is increased or decreased according to prices. In the case of Japan, similar to Korea, the basic deduction system is operated, but unlike Korea, the amount of the deduction is initialized every year to allow taxpayers to make a reasonable gift plan. Tax revision must be made in a way that does not impair its essence, but it is also important to reflect reality. Therefore, the inheritance and gift tax should not impair the essential role of limiting the inheritance of wealth, but it is necessary to find a way to transfer wealth to the younger generation in a reasonable way. As a solution, the following two are suggested. First, the combined period of the gifted property deduction is reduced from the current 10 years to 5 years. Next, it is proposed to increase the spouse deduction limit for the gifted property deduction from the current 600 million.