Inheritance Tax Paid with Stocks, Sale Rate Only 19%

Effectively Worthless... "Must Be Paid in Cash"

It has been revealed that only 19% of the inheritance tax paid in stocks over the past 20 years has been sold and converted into cash. The remainder consists of 'unlisted securities,' whose market value is difficult to determine, making normal sales challenging. Therefore, there are calls to require inheritance tax to be paid in cash assets going forward.

On the 1st, the office of Song Eon-seok, a member of the National Assembly's Planning and Finance Committee from the People Power Party, announced that this was the result after reviewing and analyzing data submitted by the National Tax Service and Korea Asset Management Corporation (KAMCO).

The National Tax Service operates a system allowing inheritance tax to be paid not in cash but in stocks, real estate, and other assets, and such in-kind payments of stocks and real estate are entrusted to KAMCO for sale. However, Song pointed out that the sale of stocks paid in kind has not proceeded smoothly, resulting in accumulation without being converted into cash.

From the start of the stock in-kind payment system in 1997 until the first half of 2023, the total value of stocks paid in kind amounted to 8.2888 trillion KRW. Of this, only 1.5863 trillion KRW (19.1%) worth of stocks were sold. The scale of stock inheritance tax that has not been actually converted into cash reaches 6.7025 trillion KRW. Moreover, the current book valuation by KAMCO is only 5.561 trillion KRW, which is less than that amount.

It was also found that the dividends received by KAMCO on stocks held over 26 years since 1997 amount to only 78.6 billion KRW. In particular, the performance in the first half of this year was only 1 billion KRW.

Furthermore, Song pointed out that all the securities currently entrusted to KAMCO as in-kind inheritance tax payments are unlisted securities, making sales difficult or regular dividends unlikely, effectively rendering them without asset value.

Song said, "Instead of merely accepting unlisted stocks with low marketability as in-kind payments and entrusting KAMCO to sell them, there is a need to improve the system so that actual cash assets can be paid as inheritance tax."

This content was produced with the assistance of AI translation services.