Chaebol owners unwilling to gift assets to children

[THE INVESTOR] Chaebol owners have been reluctant to give their assets to their children due to the burden of gift taxes, according to a market tracker on Oct. 5.

According to CEO Score, the “asset succession rate” for the country’s top 50 chaebols stood at 32.7 percent this year, up a mere 4.1 percentage points from 2011.

The figure refers to the portion of assets held by offspring compared to the owner families’ total assets. CEO Score said the major reason for the slow pace stems from the country’s high gift tax rate for chaebol. 

The asset succession rate was relatively high at 35.8 percent for the country’s top 10 conglomerates, including Samsung, Hyundai Motor, SK, Lotte, Hanwha and Hyundai Heavy Industries groups.

The increase rate for the leading conglomerates came to 7.1 percentage points over the cited period, nearly double the overall gain.
The comparable figure for the bottom 10 conglomerates reached
27.8 percent this year, far lower than the overall average, due to the young age of the controlling shareholders or the short duration of their business.

(theinvestor@heraldcorp.com)