The Southern National Tax Bureau states that if a decedent gifted property to their children within two years prior to death, the value of those gifts must be included in the total estate for tax reporting purposes. Although these gifts may not exceed the annual exemption amount, thus avoiding gift tax, they still need to be reported as part of the estate's total when filing estate taxes.

According to Article 15 of the Estate Tax Act, any gifts made to spouses and direct relatives within the two years prior to a decedent's death, regardless of whether gift tax was imposed at the time, must be included in the estate's total for estate tax calculations. For instance, if Mr. A gifted 2.2 million TWD to his son via bank transfer on March 2, 2023, and this amount did not exceed the exemption threshold of 2.44 million TWD, he would not be required to report or pay gift tax that year. However, if Mr. A passed away in 2024, the aforementioned gift would therefore be included when the heirs report the estate tax.

The tax bureau reminds taxpayers to be mindful of any gifts made to spouses or direct heirs within the two years prior to death and to include these in the estate total to avoid penalties for underreporting.