8 ms·

Nice problem to have

staticelf 5y ago
Nice way to put it
ludamad 5y ago
"50% rate... a premium can be added to shares if the deceased has a controlling interest in a company, potentially taking the top rate even higher" I have to wonder, there's a huge incentive to instead have the person somehow give huge gifts to everyone before death, right?
- Denvercoder9 5y ago
  Generally the gift tax rate is comparable to the estate tax rate to avoid this loophole. From a quick Google search it seems the gift tax in South Korea can be up to 50%.
- deleted 5y ago
  [deleted]
dfilppi 5y ago
Being double taxed is never a nice problem.
- ABeeSea 5y ago
  No one person is being double taxed. The deceased was taxed once and then the inheritor is taxed once.
speeder 5y ago
Last time I heard about this, there was some south koreans explaining this is very not nice, that the laws are silly, and can be weaponized. For example you can gift someone a expensive building right before your death, because when you do die, they will be forced to pay so much inheritance tax, that they would have to sell the building, since selling the building is quite hard, it is likely the person will just go bankrupt, or go to jail. EDIT: I misremembered something. The gift wasn't before death, it was on the will. ie: person die, and "target" inherits some expensive crap he can't sell.
- amelius 5y ago
  You could refuse the gift?
- Denvercoder9 5y ago
  That seems very far-fetched. For one, you can refuse gifts. Furthermore, I'd assume that the tax is based on fair market value, and if they can't sell the building because no one wants to buy it, doesn't that mean that the market value is $0?
  - emrah 5y ago
    I don't know how it works in South Korea but in the US, appraisals don't require having to sell the building. Similarly, for insurance purposes, they need to determine a value without having to sell the building.
    - winkeltripel 5y ago
      The idea is that you'd have to pay inheritance tax on the value of the building. The only way for someone without wealth to pay that would be to sell the building. The sale of an industrial site could take years, during which you'd owe a bunch of taxes.
      - jellicle 5y ago
        The tax man will put a lien on the building and get their money when the building sells. This idea that being given billions of dollars (as the Lee family was) is somehow a bad thing or has downsides is just ludicrous propaganda. For any billionaires out there, if you have unwanted buildings or want to punish me with a large tax bill, I will accept the punishment. Call me maybe!
      - emrah 5y ago
        Oh I see. I think I misunderstood what the original comment was saying. There shouldn't be a need to sell the building to appraise its value but right, the new owner might have to sell it to be able to pay the tax if they have no other means to pay it.
MikusR 5y ago
Except the inheritance is in shares but the tax is cash.

Nice way to put it

"50% rate... a premium can be added to shares if the deceased has a controlling interest in a company, potentially taking the top rate even higher" I have to wonder, there's a huge incentive to instead have the person somehow give huge gifts to everyone before death, right?

Denvercoder9 5y ago
Generally the gift tax rate is comparable to the estate tax rate to avoid this loophole. From a quick Google search it seems the gift tax in South Korea can be up to 50%.
deleted 5y ago
[deleted]

dfilppi 5y ago

Being double taxed is never a nice problem.

ABeeSea 5y ago
No one person is being double taxed. The deceased was taxed once and then the inheritor is taxed once.

speeder 5y ago

Last time I heard about this, there was some south koreans explaining this is very not nice, that the laws are silly, and can be weaponized. For example you can gift someone a expensive building right before your death, because when you do die, they will be forced to pay so much inheritance tax, that they would have to sell the building, since selling the building is quite hard, it is likely the person will just go bankrupt, or go to jail. EDIT: I misremembered something. The gift wasn't before death, it was on the will. ie: person die, and "target" inherits some expensive crap he can't sell.

amelius 5y ago
You could refuse the gift?
Denvercoder9 5y ago
That seems very far-fetched. For one, you can refuse gifts. Furthermore, I'd assume that the tax is based on fair market value, and if they can't sell the building because no one wants to buy it, doesn't that mean that the market value is $0?
- emrah 5y ago
  I don't know how it works in South Korea but in the US, appraisals don't require having to sell the building. Similarly, for insurance purposes, they need to determine a value without having to sell the building.
  - winkeltripel 5y ago
    The idea is that you'd have to pay inheritance tax on the value of the building. The only way for someone without wealth to pay that would be to sell the building. The sale of an industrial site could take years, during which you'd owe a bunch of taxes.
    - jellicle 5y ago
      The tax man will put a lien on the building and get their money when the building sells. This idea that being given billions of dollars (as the Lee family was) is somehow a bad thing or has downsides is just ludicrous propaganda. For any billionaires out there, if you have unwanted buildings or want to punish me with a large tax bill, I will accept the punishment. Call me maybe!
    - emrah 5y ago
      Oh I see. I think I misunderstood what the original comment was saying. There shouldn't be a need to sell the building to appraise its value but right, the new owner might have to sell it to be able to pay the tax if they have no other means to pay it.

MikusR 5y ago

Except the inheritance is in shares but the tax is cash.