DETERMINATION OF THE TAXABLE AMOUNT REGARDING SECURITIES OF UNLISTED COMPANIES

01/01/1999

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In a November 1998 announcement, the Ministry of Finance (MOF) explained the means of determining the taxable amount of shares of an unlisted company that are the object of a gift or form part of an estate.

The Enforcement Rules of Estate and Gift Tax Law provide that the value of unlisted shares should be assessed on the basis of the company's net assets value on the date inheritance began or the date of the gift. As explained by the MOF, if an unlisted company holds shares of a listed company, calculation of the net assets value of the unlisted company should be based on the closing price of the shares of the listed company on the date of inheritance or date of the gift; the deduction of imputed securities transaction tax and service charges are not allowed.