Lee So-young and Her Spouse Lent KRW 200 Million Interest-Free to Her Mother; Gift Tax Controversy

[Financial News] An allegation has been raised that Lee So-young and her spouse did not pay gift tax when they lent more than KRW 200 million interest-free to Lee’s mother for a lease deposit.
On the 7th, Choi Su-jin, a People Power Party lawmaker on the National Assembly’s Trade, Industry, Energy, SMEs, and Startups Committee, analyzed Lee’s property change report. The analysis showed that Lee’s spouse lent KRW 223.1 million in 2022 to Lee’s mother, his mother-in-law, to help cover a lease deposit. No separate loan agreement was drawn up, and no interest was received.
At the time, Lee’s mother signed a lease for a multi-family home in Poil-dong, Uiwang, Gyeonggi Province, with a deposit of KRW 323 million. Lee reported that her spouse lent KRW 223.1 million as a “mock lease deposit,” while Lee provided the remaining funds by repaying KRW 99.9 million that she had previously borrowed from her mother.
The issue is gift tax arising from the interest-free loan. Under the Inheritance and Gift Tax Act, benefits obtained by borrowing money from a related party free of charge or at a low interest rate are treated as gifts if they exceed a certain threshold.
Choi’s side explained that applying the appropriate annual interest rate of 4.6% to the KRW 223.1 million lent by Lee’s spouse to her mother would result in annual interest equivalent to approximately KRW 10.26 million. Based on this, it argued that Lee’s mother had failed to pay approximately KRW 1 million in gift tax each year.
Choi said, “The nominee and her spouse are legal experts who previously worked at Kim & Chang Law Firm,” and pointed out, “They would have known that gift tax must be paid even when lending a large amount of money among family members.” She continued, “For small and medium-sized businesses, self-employed people, and small business owners who have faithfully paid their taxes, the tax evasion issue involving the family of the minister overseeing the relevant ministry could undermine confidence in government policy.” She called for an explanation and payment of the taxes.

[email protected] Kim Kyung-min Reporter