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Do I Have to Make Any Filing Including Tax Report with the Korean Authority Regarding the U.S. House Gifted by My Korean Parent – Korean Tax Implication of International Gifts

When receiving gifts of money or other property, we 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 the foreign country where the foreign party resides.  And even further, foreign tax liability could arise.  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 resident(devisor) should report the transaction in advance to the Bank of Korea.

The nationality of the parties doesn’t matter here. What does matter is the place of residence of each party.  The Korean Tax authority (National Tax Service) has an internal rule to apply when Continue reading


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Choice of Laws Is Critical When It Comes to an International Inheritance

Korean LawyerRecently our office has represented US clients whose German father had passed away in South Korea without any will.  At the time of passing, the deceased was domiciled in Korea and remarried to a Korean wife.  The Korean wife contacted the US family out of blue to discuss how to distribute the estate in Korea.  The US clients were the children from the deceased’s previous marriage in the US.  They contacted our office for the legal advice and representation.

One of the issues was which country’s inheritance law shall be applicable, i.e. the Korean inheritance law or the German inheritance law.  This was because the deceased had a foreign nationality, while his estate and residence at the time of passing were all in Korea.  Practically, when the Korean law is applied, the US children shall be entitled to the larger shares than those granted under the German law.

In Korea, Article 49 of the Korean Act on Private International Law(“APIL”) is the starting point to determine which country’s law shall be the governing law in case of an international inheritance case.  It provides that Continue reading