Blab Crypto
South Korean Families Double Crypto Gifts to Minors as Tax Authority Expands Oversight Ahead of 2027 Reforms
In 2025, South Korean families sent a staggering 4.03 billion won ($2.8 million) in cryptocurrency to children 18 or younger—a 2.7‑fold jump from the previous year. The National Tax Service (NTS) data, released by Democratic Party lawmaker Jung Tae‑ho and reported by News1 on September 9, also shows that the number of reported gifts nearly doubled to 103. The surge is most pronounced among the youngest recipients: transfers to those 11 or younger tripled in value to 2.35 billion won, while the number of cases rose from 28 to 65.
The uptick comes as Seoul prepares to broaden its reach into the virtual‑asset market. Starting January 2027, the NTS will be able to request information from exchanges such as Upbit and Bithumb, in addition to banks, securities firms and insurance companies. The expansion is part of a broader tax‑reform package that also introduces a 22 % combined tax rate on annual crypto gains above 2.5 million won, effective January 2027. Under the new rules, gains will be treated as miscellaneous income, subject to a 20 % national tax and a 2 % local tax.
In 2025, the NTS recorded 423 inheritance and gift cases involving virtual assets, with a total value of 45.86 billion won. 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. The data illustrate a growing trend of intergenerational wealth transfers through digital assets, a trend that the tax authority says it must track more closely.
To improve visibility, the NTS plans to deploy commercial wallet‑tracing software used by investigative agencies in South Korea and abroad. The agency said private wallets remain difficult to monitor because taxpayers control the assets directly, but tracing tools could follow transactions between wallets and identify movements that might otherwise be hard to connect to a taxpayer. The NTS also noted that its current system needs improvement for person‑to‑person transfers, overseas transactions and private wallets.
Valuation of gifted crypto follows the same framework used for other taxable assets. For assets traded on a designated virtual‑asset service provider, 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: 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.
South Korea’s tax‑reform package also includes measures to obtain information on crypto held overseas, linked to the OECD Crypto‑Asset Reporting Framework. The NTS said it will seek additional improvements to the system used to obtain tax information covering overseas trades, private wallets and direct transfers between individuals.
The new powers and upcoming tax regime are scheduled to take effect in 2027, with the first related tax returns expected in May 2028. The People Power Party has introduced legislation to delay the tax until 2030, and a separate proposal seeks to remove the planned levy altogether. Unless lawmakers change the law, income generated during 2027 will fall under the new rules.
The 2025 data show that families are already using crypto gifts to take advantage of existing tax exemptions and to position assets ahead of the 2027 reforms. The NTS’s expansion of its investigative reach to exchanges and virtual‑asset businesses, coupled with the introduction of a comprehensive crypto‑income tax, signals a tightening of regulatory oversight that will affect both domestic and overseas crypto activity.
The current situation is that South Korean families have increased crypto gifts to minors significantly, the NTS is preparing to broaden its investigative tools, and a new tax regime on crypto gains will begin in 2027. The unresolved issues include how effectively the NTS will monitor private wallets, the impact of the new tax on crypto‑asset holders, and the political debate over the timing and scope of the reforms.
The uptick comes as Seoul prepares to broaden its reach into the virtual‑asset market. Starting January 2027, the NTS will be able to request information from exchanges such as Upbit and Bithumb, in addition to banks, securities firms and insurance companies. The expansion is part of a broader tax‑reform package that also introduces a 22 % combined tax rate on annual crypto gains above 2.5 million won, effective January 2027. Under the new rules, gains will be treated as miscellaneous income, subject to a 20 % national tax and a 2 % local tax.
In 2025, the NTS recorded 423 inheritance and gift cases involving virtual assets, with a total value of 45.86 billion won. 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. The data illustrate a growing trend of intergenerational wealth transfers through digital assets, a trend that the tax authority says it must track more closely.
To improve visibility, the NTS plans to deploy commercial wallet‑tracing software used by investigative agencies in South Korea and abroad. The agency said private wallets remain difficult to monitor because taxpayers control the assets directly, but tracing tools could follow transactions between wallets and identify movements that might otherwise be hard to connect to a taxpayer. The NTS also noted that its current system needs improvement for person‑to‑person transfers, overseas transactions and private wallets.
Valuation of gifted crypto follows the same framework used for other taxable assets. For assets traded on a designated virtual‑asset service provider, 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: 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.
South Korea’s tax‑reform package also includes measures to obtain information on crypto held overseas, linked to the OECD Crypto‑Asset Reporting Framework. The NTS said it will seek additional improvements to the system used to obtain tax information covering overseas trades, private wallets and direct transfers between individuals.
The new powers and upcoming tax regime are scheduled to take effect in 2027, with the first related tax returns expected in May 2028. The People Power Party has introduced legislation to delay the tax until 2030, and a separate proposal seeks to remove the planned levy altogether. Unless lawmakers change the law, income generated during 2027 will fall under the new rules.
The 2025 data show that families are already using crypto gifts to take advantage of existing tax exemptions and to position assets ahead of the 2027 reforms. The NTS’s expansion of its investigative reach to exchanges and virtual‑asset businesses, coupled with the introduction of a comprehensive crypto‑income tax, signals a tightening of regulatory oversight that will affect both domestic and overseas crypto activity.
The current situation is that South Korean families have increased crypto gifts to minors significantly, the NTS is preparing to broaden its investigative tools, and a new tax regime on crypto gains will begin in 2027. The unresolved issues include how effectively the NTS will monitor private wallets, the impact of the new tax on crypto‑asset holders, and the political debate over the timing and scope of the reforms.
