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.
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?
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.
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.
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!
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.
The Samsung family have been engineering this for about two decades. Lee Kun-hee was convicted twice for stuff relating to this.
The issue they have is retaining control over Samsung whilst having to pay inheritance tax. This is why the stock price rose significantly when Lee actually "died", he obviously legally died before that point the coverup was to maintain control over Samsung, because it looks like they have finally lost control.
So yes, these laws are taken pretty seriously.
Btw, the thing about the gift is true in most countries. The reason why should be obvious: if you could just gift before someone dies then no-one would pay inheritance tax. It is usually a few years: so if you receive a gift and the granter dies within a few years then it is subject to inheritance tax.
I don't know about other countries, but this is one area where the US tax code makes sense. Gifts beyond a certain value ($15,000/recipient-year) are reported. You then have an $11.5M lifetime exception for paying taxes on further gifts (2020 number). When your estate goes to pay the estate tax, it also has the same exemption as the lifetime gift tax, and anything you filed against the lifetime gift tax exception is deducted from what you are allowed to claim against the estate tax exemption.
In other words, the only (federal) tax benefit gift giving can provide is $15,000/recipient annual exemption, which is inherently limited.
But that doesn't make any sense. The building should have to be sold first before appraising its value. Non-withstanding the difficulty of timing your own demise, I think you could at least reject the very dubious gift at least?
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%.
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.