Dear Sir,

 

I am Moon Jung-ho, a tax professional at Serim Tax Firm.

I would like to provide my opinion on your inquiry.

[Whether Hospital Expenses are Included in Pre-Gifted Property]

(1) Conclusion
It is difficult to consider it as pre-gifted property.

(2) Relevant Laws and Regulations
1) Gift refers to the transfer of property or benefits received without charge.
2) Pre-gifted property refers to the value of property gifted by the deceased heir to heirs (other than heirs) within 10 years (5 years) before the commencement of inheritance.
3) Substantial taxation under the National Tax Basic Act refers to the principle of applying taxation based on the substance, regardless of the names or forms of income, profits, property, acts, etc.

 

(3) Basis for Judgment
1) Unless there is clear evidence that the withdrawn amount was used for hospital expenses, it cannot be considered as property or benefits received without charge.
2) If the deceased heir was unable to pay the hospital expenses directly while hospitalized, it is a situation where a guardian may frequently have to pay on behalf, considering societal norms.
3) Considering the heir's claim that the withdrawn amount was intended for hospital expenses and the clear existence of actual hospital expense payment records, it can be argued that the money was substantively used for hospital expenses, and therefore, that amount should not be considered as a gift.