A Story in Yokohama -4 【Mt. Fuji from Lake Kawaguchiko in red leaves】
A Story in Yokohama【 Subtitled "Longing"】-4
“Of course. By the way, I have a secret matter to discuss with you.”
“Secret?”
“Yes.”
Yuichi quietly cut to the chase.
“If your husband's shareholding was less than 30 percent of the total, you would only have to pay a few hundred million yen in taxes.”
“What do you mean?”
“The valuation of the stock is calculated based on the net asset value of the company. According to the most recent net asset value published by Milan Travel Agency, a 34 percent share would be worth at least 8 billion in assets. But there is a special rule that allows us to use it to reduce the valuation very low.”
“What is the special rules?”
“For shareholders who own less than 30 percent of the stock, there is a special exemption granted by the National Tax Administration that allows them to value their shares using a different calculation than the net asset value. Using this method, your husband's remaining shares could be valued at one-fifth of 8 billion, or about 1.6 billion. That way, you only have to pay about 400 million yen in taxes.”
“Can you do that?”
“It's a valuation method called a dividend discount method. It's a method of valuing stock based on the idea that for people who can't control the company through stock ownership, the stock will be worth at best little more than an expected dividend.”
“But my husband left us 34 percent of the stock. You can't calculate it that way.”
“That's what I want to talk to you about.”
“What do you mean?”
“Before your husband's death, I want you to assume that he transferred five percent to me. That would give you a 29 percent stake in the company and allow me to calculate a special exception.”
“Isn't that a bad idea?”
“It's just between you and me and no one else. If you can't do that, the tax office won't wait for you to pay your taxes, so you'll have to sell your shares in a hurry.”
“If I put it up for sale, competitors would jump on it, but I can't do that. To tell the truth, the people who took over my husband's business don't seem to be able to get their money out quickly. It would be nice if the tax office would allow me to pay in the form of actual shares.”
“Even if you are able to pay the tax in kind, the tax office will still sell the shares at public auction. You don't know who will get the shares. It's the only way to avoid burdening the people who took over the business from your husband.”
“But isn't this a wrong thing to pretend that it did happen?”
“It's not right to go back in time and pretend it did happen. But this will save you and the company a lot of trouble. So I think it's a good thing in the big scheme of things.”
“Does this happen often in the tax business?”
“Not often, but sometimes I try to do something like this.”
“I understand that it helps everyone to follow your advice, but isn't it a tax evasion?”
“This is called saving taxes. Tax evasion is to cheat on your taxes out of your own desires, but this time I am just trying to make sure that you and the company don't get into trouble.”
(If I thought he is still an earnest little boy, he's got the expression of a man.)
Somehow, Naomi's eyes grew moist and red.
The way Yuichi speaks was sincere and polite, but behind his expression, there was a sense of persistence that he did not allow her to say anything, since he brought up the subject.
“So, if you don't say anything, no one will know.”
Naomi inhaled slowly and then exhaled quietly.
"….. Good. I'll do what you say.”
“I'll make some paperwork and bring it to you next time and please prepare your husband's registered seal.”
“You're going to put the five percent of the shares in your name, aren't you?”
“Yes, that's right. But since the shares actually belong to you, I'll give you a letter of intent to that effect.”
“Yuichi, I don't want to have that kind of a reminder. It's a good idea to keep it in your possession for a long time, although I will talk to my daughter about it.”
“You mustn't do that. Our relationship and money matters is a different.
And please keep this between you and me. I don't want this story to get out to anyone else, so please don't tell anyone.”
“I understand. I'm going to give you the stock, Yuichi, and you can have it. It's my decision. I'll leave all the procedures for the declaration to you.”
“I appreciate your concern, but I have no use for such property. When the business managers eventually purchase the shares, I'll make sure you get the money.”
Commentary
・Yuichi approached Naomi with a proposal to reduce taxes by way of retroactively changing the percentage of shareholding.
・Naomi's eyes tear up at the suggestion, and she accepts Yuichi's proposal so easily.
・Naomi's attitude towards Yuichi is connected to the overall theme of this story.
The main characters in the earlier part of the story are Naomi "heiress", Yuichi "tax accountant", and J "friend of Yuichi".
・・・To be continued・・・