[Edaily Reporter Kim Se-yeon ] The days of receiving pocket money from my parents during the holidays are long gone. Now that I’m a full-fledged working adult, it’s only right to show my parents my appreciation. There are many ways to show your appreciation, from small gifts to giving pocket money in amounts of 100,000 or 200,000 won. When you’re living on a meager salary, it’s hard to even imagine giving such a generous sum—5 million or 10 million won—as pocket money. Still, you might be wondering: Are there taxes on such a generous act of filial piety?
To put it simply, if this is the first time you’re giving such a large sum of pocket money, it’s highly likely you won’t have to pay any taxes right away. This is because the current Inheritance and Gift Tax Act does not impose gift tax on living expenses, medical expenses, and educational costs for dependents that are recognized by social norms. However, if your parents deposit the money into a savings account or invest it in stocks, it will be difficult to have it recognized as pure pocket money. Consequently, if the money is given for living expenses, you won’t have to pay taxes regardless of the amount; otherwise, only pocket money totaling 50 million won or less over a 10-year period is tax-exempt.

The key factor is not the name given to the money, but its actual use. Simply noting “Chuseok allowance” or “living expenses” on a bank transfer record is not enough.
Let’s assume a child gives their parents 5 million won each year for Lunar New Year and Chuseok. That’s 10 million won per year, totaling 100 million won over 10 years. If the parents used that money to buy groceries and pay for maintenance fees and medical bills, it could be recognized as living expenses. This means no gift tax is imposed. Conversely, if the money was not spent but instead deposited into a fixed-term savings account or used to purchase stocks or real estate, the situation changes. According to Article 53 of the Inheritance Tax Act, property received by parents from their children or other direct descendants is tax-exempt up to 50 million won over a 10-year period. For example, if none of the 100 million won received over 10 years was used for living expenses, the remaining 50 million won—after subtracting the 50 million won exemption—would be subject to taxation.
The National Tax Service has also explained through an official interpretation that tax-exempt living expenses are funds received as needed and used directly for those specific expenses. Even if money was received under the guise of living expenses, it is not considered tax-exempt if it was deposited into savings or time deposits, or used to purchase stocks, land, or a home.
The financial circumstances of both parents and children are also important. If parents have sufficient income and assets but a child regularly sends them large sums of money, it may be difficult to recognize this as living expenses provided solely for the purpose of support. The National Tax Service maintains that it makes its determination by comprehensively evaluating specific facts, such as the child’s occupation, age, and income and asset status.
The same applies to cases where a child gives 10 million won to their parents for the first time this Chuseok. If the parents actually use the money for living expenses and the need for support is recognized, it may qualify as tax-exempt living expenses. Even if it is viewed as a general gift rather than living expenses, if the parents have not received any other property from their child in the past 10 years, the amount falls within the 50 million won deduction limit, and no gift tax is due.
Lee Seong-ho, Chief Tax Accountant at Rich Tax Firm, stated, “Ultimately, what matters is whether the money received by the parents actually constitutes living expenses,” adding, “If it is used for living expenses, it may be exempt from gift tax, but if it is used to accumulate assets, it will not be considered a tax-exempt gift.”
There is no need to panic that “taxes are being levied on filial piety.” However, the more generous the allowance, the more important it is to carefully examine not only “how much was given” but also “how it was spent.”