If you inherit twice alone, the company disappears … Seo Jeong-jin

It was confirmed that amid criticism that Korea’s inheritance tax was excessive due to the death of Samsung Group chairman Lee Kun-hee, Celltrion chairman Seo Jeong-jin also told Democrats: ” If they inherit twice, the company will disappear. ” Chairman Seo is reported to have also proposed a plan to pay inheritance tax in lieu of listed shares.

According to several Democratic Party lawmakers on the 30th, President Seo gave a lecture on the situation of the new coronavirus infection (Corona 19) and the outlook for bioindustry at the Democratic Party study meeting last June in Gyeonggukjimo (meeting of legislators who study economics), and said: ‘Inheritance tax’. Rationalized. ‘ Top Democrats like Nak-Yeon Lee, Rep. Kim Tae-yeon, and Rep. Lee Gwang-jae, who were in at the time, were sitting here.

A ruling party member who attended the conference said: “President Seo’s words were interpreted to raise the issue that the inheritance tax should be viewed from the perspective of corporate permanence, not simply as a means of inheritance from the wealth”. Another member of the legislator explained, “Chairman Seo said he would prefer to pay more corporate taxes” and said: “The purpose was to create an environment for companies to fulfill their social roles but preserve management rights.”

In Korea, the highest inheritance tax rate is 50%. Shares held by the largest shareholders or related parties are valued 20% more than the actual price. It agrees with the “major share premium assessment system for shareholder holding.” Eventually, you will have to sell shares to increase the inheritance tax, but if this happens, the ownership ratio will drop and management rights may be affected. When the stock transfer tax is added, the tax rate reaches 80%. This is why it is noted that Korea’s inheritance tax system is harsher for entrepreneurs.

As a solution to this, President Seo proposed a method to pay inheritance tax with shares. It is a request to include listed stocks in the ‘payment system’ where taxes are paid instead of real estate, bonds, and securities.

Currently, only unlisted shares can be paid in advance, but in 2013, the payment was restricted as it was noted that listed shares are easy to sell and money can be paid immediately.

The president’s idea is to pay inheritance tax with shares, but to guarantee the right to buy back shares with money earned through business management in the future. In this case, it is possible to protect the management rights while paying the inheritance tax.

Democratic Party congressman Lee Gwang-jae, who attended the conference, said: “It will not be easy to assess the value of volatile traded shares in terms of income.”

Journalist Jo Mi-hyun [email protected]

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