Category: Real Estate

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When receiving gifts of money or other property, the party should check any tax issues involved.  When the gifts cross the national borders or involve foreign parties, it becomes more complicated.  It could entail an additional filing with a government of a foreign country where the foreign party resides.  Today, we are going to introduce what report and tax liability the parties should take care of and under what condition, when a U.S. resident receives a U.S located house as a gift from his Korean resident parent.

Report to the Bank of Korea

According to Article 7-46 and 7-44 of Foreign Exchange Transaction Regulation(FETR), when a resident of Korea gifts a real property, which is even located abroad, to any non-resident, the Korean resident(devisor) should report the transaction in advance to the Bank of Korea.

The nationality of the parties doesn’t matter here. Only the place of residence does matter.  The Korean Tax authority (National Tax Service) has an internal rule to apply to decide who is a resident and who is not.

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Q) I have a question about whether to renounce inheritance in Korea. My mother passed away a few months ago. There was no will. She was a Korean citizen and her husband too. All two children live in the U.S. and they are U.S. citizens. As we understand I have inherited a 2/7 share of my mother’s condominium and some cash in Korea. My stepfather and his Korean lawyer seem to up to no good. They both have sent conflicting and in my opinion false information to me. Especially his lawyer is threatening me that I would not able to sell my share so I had no choice but to give up or transfer my share. The stepfather asked me to sign POA and a Renunciation of Inheritance but I refused. They even said as I am not a Korean citizen, it would be much better renouncing inheritance for the sake of estate distribution. He said he will compensate me for my renounced share. Can you give me any advice?

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In September 2012, Chung & Partners successfully advised a Korean real estate development company(the “Company”) in connection with a project financing for the land acquisition, development and construction of commercial building to be built in downtown Seoul.  The financing package enabled our client to receive funds in the amount equivalent to USD 140,000,000.  Thanks to this transaction, the Company has successfully launched the project.

Our attorney Mr. Wonil Chung acted as counsel for the Company and provided legal advice on every aspect of the deal from structuring to documentation.

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I found a very informative article for foreigners interested in Korean project financing market.  Korean project financing deal is largely dominated by real estate development financing deal.  The author addressed current situation and problem of Korean Savings banks regarding withering Korean project financing market.  I have seen many bank clients considering extension of their project financing or ABCP terms due to the withering project-financing market and (more…)