GS’s Huh transferring wealth to family
Many salarymen start their careers with dreams of eventually earning a six-digit annual income, equaling around 100 million won.
Only a precious few though achieve this goal.
There are however some elementary school children who earn many millions of won yearly, based on stocks in their names when they were still babies presented by the foresight of their parents.
A local consultancy Chaebol.com announced Friday that 102 children hold shares of listed companies worth more than 100 million won, up from 85 last year.
And at the top of the list are children of GS executives, one of the nation’s top family-owned conglomerates led by Chairman Huh Chang-soo.
The 11-year-old son of GS Holdings Senior Vice President Huh Yong-soo had shares worth 45.3 billion won in the holding firm of GS Group at the end of April to rank number one.
The champion’s eight-year-old younger brother came in at the third place with a purse of 16.3 billion won.
The eldest son was first given the shares in 2004 when he was just three years old and he gains more than 700 million won in dividends per annum while the second son also receives upside of 200 million won.
Others on the list are also connected to GS Group since GS Homeshopping CEO Huh Taesoo’s 12-year-old daughter possessed equities in GS affiliates worth 17 billion won.
Huh Yong-soo and Huh Taesoo are cousins of Chairman Huh Chang-soo, who is also in charge of the nation’s big business lobby, the Federation of Korean Industries (FKI).
There are cases where toddlers have already amassed wealth that ordinary people won’t ever realize even despite working hard all their lives.
A relative of LS Group Chairman Koo Ja-hong was given 12,000-plus shares of the chaebol’s subsidiary at the age of one so that his wealth currently stands at higher than 900 million won.
“It is not against the law for rich people to have their young offspring inherit part of their money after paying gift taxes.
But it is sort of sidestepping regulations,” a Chaebol.com official said.
Turning crisis into opportunities Chaebol.com said that the number of young rich is expected to increase down the road because conglomerates adopt the format as an affordable way of transferring wealth within the family.
The reason: they can save on the hefty gift taxes, which can be as high as half of the total inheritance.
“During the stock market crash, they can give stocks with a minimum gift tax so they have the incentive to take action when the bourse is low,” the official said.
“In this case, the number of wealthy kids jumped of late in the wake of the financial crisis.” The number of children with stock valued at more than 100 million won doubled during the past four years from 51 in early 2008 before the financial meltdown happened to 102 this year.
He expected that the sluggish share markets midway through last year, which was caused by the debt crisis in euro zone and the United States, would have offered another chance for conglomerate families.
This can be discouraging news for people toiling hard at their jobs as a vast majority doesn’t make 100 million won a year in Asia’s fourth-largest economy.
According to National Tax Service, out of some 15 million salaried workers some 280,000 made 100 million won last year.