ATJ Asian Tax Journal

Asian Tax Journal

Print ISSN 1738-3323 Online ISSN 2733-9270

A Study on the Revision Directions of the Inheritance Tax System for the Relief of Its Burden

  • Sangshin, Lee University of Seoul

Asian Tax Journal Vol. 20 No. 5 (2019), pp. 81-103

Abstract

There have been active discussions and legislative activities in recent years to meet the need for the improvement of heavy inheritance tax and reduce its burden to a proper level. This study began by assessing whether the taxation of inheritance tax could be recognized as infringement on inheritance right or property right and did a theoretical review of legislation cases in major advanced nations. The findings led to the following conclusions： In a short run, there is a need to revise the concerned laws to reduce the years added to prearranged inheritance from ten to three or five years, change the rate of each taxation bracket and the standard amount by reflecting the inflation rate, and increase the upper limit in deduction for spouse above the current three billion won or abolish the upper limit as long as it is within the scope of shares of statutory inheritance. In a long run, there is a need to change the tax system to replace the taxation method for inheritance tax with that for acquisition tax on inheritance, view succession of family business in the aspect of “employment” or “going concern” instead of inheritance, and reinforce the status of spouse more than the current level. The plans for the considerable increase of tax exemption and the reduction or abolition of all kinds of deduction systems will just simplify the application of inheritance tax. It is a task whose discussion should start now to change the basic structure of inheritance tax.

Keywords

  • inheritance tax
  • succession of family business
  • deduction for spouse
  • bracket creep
  • acquisition tax on inheritance

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Asian Tax Journal

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