Lending 700 Million Won to a Nephew? Controversy Arises Over "Aunt and Uncle's Chance"

[Anchor]

It has been revealed that the commercial apartment store property owned by the son of Defense Minister Nominee Kang Shin-chul—which was omitted from his initial property declaration—was purchased using over 700 million won borrowed from his aunt and uncle. While the nominee's side claims it is a legitimate debt relationship, circumstances suggest the loan amounts may have been split to avoid gift taxes or additional interest.

Reporter Go Jeong-hyeon has the details.

[Reporter]

The commercial building in Yangji Village, Seongnam, Gyeonggi Province, was purchased by the son of Defense Minister Nominee Kang Shin-chul for 700 million won on June 30.

After it was revealed that documents related to this commercial property purchase were omitted from the property declaration submitted to the National Assembly for the confirmation hearing, the nominee's side submitted two promissory notes stating that the nominee's son, born in 1996, borrowed a total of 711.55 million won from two individuals to buy the property.

On the day before yesterday (September 7), the nominee's side declined to disclose the identities of the lenders, citing privacy reasons. However, as confirmed by Reform Party lawmaker Chun Ha-ram yesterday, the lenders turned out to be the nominee's sister-in-law and her husband—the son's aunt and uncle.

Specifically, he borrowed 500 million won from his aunt at an annual interest rate of 4.6 percent, and 211.55 million won interest-free from his uncle. This may have taken into account the maximum limit of roughly 217 million won that can legally be borrowed interest-free between private individuals under tax laws.

This is because if the interest-free loan amount exceeds the threshold, it is considered a gift and subject to gift tax.

Lawmaker Chun criticized the arrangement, asking, "What aunt and uncle would readily lend 700 million won to a nephew who has only been employed for a year?" He added, "It is practically a carefully planned intra-family gift disguised as a loan, or an 'aunt and uncle's chance.'"

The nominee's side denied allegations of a disguised gift, stating, "It is a legitimate debt between private individuals," and explained that "the nominee's son is properly and regularly paying back both the principal and interest."

However, they did not provide a specific response to questions regarding whether the loan amount was split to evade gift taxes.

(Photo & Video Reporting: Shin Dong-hwan, Kim Yong-woo | Video Editing: Nam Il | Design: Seo Seung-hyun)
※ Please note: This article was translated by AI and may contain errors.