"Family Account Transfers: 'Purpose' is More Important Than Amount... Who Carries the Burden of Proof?"

Rather than the amount of money transferred between family members, what is more important is whether one can prove 'why that money moved.' This is because the imposition of taxes changes completely depending on who carries the burden of proof regarding the flow of money.

For Parents and Children, the 'Taxpayer' Must Prove; For Spouses, the 'Tax Authority' Must Prove

According to the Jeolsemi-nam_SemusaTVISeongho video, account transfers between parents and children are, in principle, presumed to be gifts. Therefore, the responsibility to prove that the funds in question are not a gift lies with the taxpayer themselves. On the other hand, transfers between spouses have a different nature. According to a Supreme Court of Korea ruling, transfers between spouses can have various causes, such as convenience for communal living or entrusted management of funds; thus, the tax authority (National Tax Service) must directly prove that the funds in question are a gift.

However, caution is required as funds transferred to a spouse may be judged as a gift if they remain as assets under the spouse's name, such as stocks or real estate. The spouse gift tax deduction applies up to 600 million won over a 10-year period. The video distinguished the core criteria for transfers between spouses into 'management' and 'transfer.' If money moves across and then returns to its original place, it can be seen as 'management,' but if it is completely transferred to the spouse's name and becomes their property, there is a high possibility it will be considered a gift.

Living Expenses are Tax-Exempt, but if they become 'Assets' instead of being 'Consumed,' they are Subject to Gift Tax

Living expenses and education expenses for dependents that are recognized by social norms are exempt from gift tax. However, strict conditions follow this. First, the recipient must be a 'dependent' who has an obligation to be supported. For example, money given to a child with income who can maintain their livelihood through their own economic activities is difficult to recognize as living expenses.

Even more important is the 'use' of the funds. The video explained that if money received under the guise of living expenses is not consumed but instead saved in deposits/savings or used to acquire stocks/real estate, the tax-exempt benefit cannot be received. For example, if a portion of the money received monthly as living expenses is left over and used for a savings account, that savings amount may be considered a gift rather than living expenses. To prevent this, it is advantageous to manage a dedicated account for living expenses and a separate account for asset formation.

Prepare for Inheritance and Gift Tax Audits: Leave 'Account Memos' and 'Evidence'

During a source of funds investigation, if the amount that cannot be proven is less than the smaller of 20% of the acquired property value or 200 million won, the presumption of a gift may be excluded. However, as the value of the property increases, the proportion of this 'forgiven amount' relatively decreases. Additionally, if withdrawals of 200 million won or more within 1 year or 500 million won or more within 2 years before a parent's death occur and the purpose is unclear, these may be presumed to be inheritance property.

Accordingly, the video suggested three practical measures to prepare for tax audits. First, when transferring, clearly state the purpose, such as 'hospital bills,' 'living expenses,' or 'principal repayment,' in the 'recipient's account memo' field of the banking app. Second, do not create patterns such as splitting withdrawals into amounts under 10 million won to avoid taxes. Third, it is recommended to clearly distinguish and manage the nature of money moving between family members as either a gift, a loan, or living expenses.