South Korea sees sharp rise in crypto gifts to children before 2027 tax rules
South Korean families have increased reported cryptocurrency gifts to minors by 2.7 times in a year, with transfers to children aged 18 or younger reaching 4.03 billion won ($2.8 million) in 2025.
Data obtained from the National Tax Service by Democratic Party lawmaker Jung Tae-ho showed 103 reported virtual asset gifts to minors last year, up from 53 in 2024, according to a Sept. 9 News1 report. The value rose from 1.47 billion won to 4.03 billion won over the same period.
The increase was even stronger among younger children. Crypto gifts to children aged 11 or younger climbed from 28 cases in 2024 to 65 last year, while their combined value tripled from 774 million won to 2.35 billion won.
Across all age groups, the tax authority recorded 423 crypto inheritance and gift cases worth 45.86 billion won in 2025. The number of cases was 2.4 times the previous year’s level, while the value increased 3.4 times.
Of the 360 transactions classified specifically as gifts, close to one third involved minors.
Crypto gifts to minors rise before tighter tax checks
The figures have emerged as South Korea prepares to give its tax authority more tools to identify digital assets held by people involved in inheritance and gift tax cases.
Under the government’s 2026 tax reform plan, virtual asset service providers such as Upbit and Bithumb will be added to the institutions covered by financial asset inquiries for inheritance and gift tax investigations from next year.
Current inquiries allow the National Tax Service to check financial assets held through institutions such as banks, securities firms and insurance companies. Crypto service providers are expected to join the system from Jan. 1, 2027, giving tax officials another source of records when examining assets belonging to a deceased person or someone making a gift.
The authority’s power to request information and conduct inquiries in inheritance and gift tax cases will similarly extend to virtual asset businesses.
An NTS official told News1 that the agency plans to conduct more systematic checks and management of inheritance and gift taxes involving virtual assets.
The new powers form part of a series of measures being prepared as tax officials try to improve visibility over crypto held outside traditional financial accounts. Crypto.news previously reported in August that the NTS plans to introduce commercial wallet tracing software used by investigative agencies in South Korea and overseas.
Tax officials acknowledged at the time that private wallets remain difficult to monitor because taxpayers control the assets directly. The agency said tracing tools could be used to follow transactions between wallets and identify movements that may otherwise be harder to connect to a taxpayer.
Jung said the tax information system still needs improvement to cover person-to-person transfers, overseas transactions and private wallets.
“As intergenerational wealth transfers through virtual assets increase, we need to accurately understand the actual status of gifts and strengthen the infrastructure needed to ensure appropriate taxation,” he said.
South Korea is preparing its 22% crypto tax
The tighter monitoring of gifts comes before a separate tax on profits from transferring or lending digital assets.
South Korea’s government confirmed the 2027 rollout of the long-delayed crypto income tax in its 2026 tax reform package in August.
Under the current Income Tax Act, annual virtual asset gains exceeding 2.5 million won will be classified as other income from Jan. 1, 2027. Investors will pay a 20% national tax on gains above the allowance, with local income tax taking the combined rate to 22%.
An investor earning 12.5 million won in qualifying crypto income, for example, would deduct the 2.5 million won allowance and pay 22% on the remaining 10 million won, producing a tax bill of 2.2 million won.
The rules are not limited to assets held on domestic exchanges. Government responses disclosed in August confirmed that taxable income generated through private wallets and foreign exchanges will fall within the regime.
Tax authorities have said the location or custody method used for a virtual asset does not determine whether income from its transfer or lending is taxable. Rules for income generated through areas including staking, airdrops, lending and hard forks were still under review in August.
The tax has faced continued political opposition. The People Power Party introduced legislation last month seeking to delay the tax until 2030, after a separate proposal sought to remove the planned levy altogether.
Unless lawmakers change the law, income generated during 2027 will fall under the new rules, with the first related tax returns expected in May 2028.
Crypto gifts already fall under South Korea’s gift tax rules
Cryptocurrency does not need to wait for the 2027 income tax regime to fall within South Korea’s inheritance and gift tax system.
Virtual assets transferred as gifts must already be declared in the same way as other taxable assets. Valuation depends on where the cryptocurrency trades.
For assets traded through a virtual asset service provider designated by the NTS, including major cryptocurrencies such as Bitcoin, the taxable value is calculated using average daily prices covering one month before and one month after the gift date.
Assets with little trading activity or those not listed on qualifying exchanges are valued using the average price on the date of the gift.
Family gift deductions apply under the same framework used for other types of property. Over a 10-year period, transfers to a spouse qualify for a deduction of up to 600 million won, while the limit for an adult child is 50 million won.
For minors, the 10-year deduction is capped at 20 million won. A gift valued within the applicable deduction does not generate gift tax, although it remains subject to the rules governing valuation and reporting.
The value used for tax purposes can differ from the cryptocurrency’s price on the day it was transferred because qualifying exchange-traded assets are assessed over the two-month valuation period. With prices capable of changing substantially during that window, the final assessed value can move above the amount initially expected by the person making the gift.
South Korea is separately preparing to receive more information on crypto held overseas. The government’s tax reform package includes measures connected to the OECD’s Crypto-Asset Reporting Framework, which is expected to give authorities access to transaction information exchanged by participating jurisdictions.
For assets that remain outside those reporting channels, Jung called for further improvements to the system used to obtain tax information covering overseas trades, private wallets and direct transfers between individuals.
