November 29 2022 4:30 AM E-paper Subscribe Sign in My Account Sign out

Samsung’s Lee family to pay more than $10.8b inheritance tax

The inheritance tax bill - one of the largest-ever in South Korea and globally - has been closely watched due to its potential to dilute the family’s controlling stake in Samsung. (Photo: Unsplash)
The inheritance tax bill - one of the largest-ever in South Korea and globally - has been closely watched due to its potential to dilute the family’s controlling stake in Samsung. (Photo: Unsplash)
SEOUL — The family of late Samsung Electronics Co Ltd Chairman Lee Kun-hee said on Wednesday they will pay over 12 trillion won ($10.8 billion) in inheritance tax for his estate and donate his vast private art collection to state curators.اضافة اعلان

Lee, who is credited with transforming Samsung into the world’s largest smartphone and memory chip maker, died on October 25 with an estate local media valued at around 26 trillion won.

The inheritance tax bill - one of the largest-ever in South Korea and globally - has been closely watched due to its potential to dilute the family’s controlling stake in Samsung.

The family said it planned to pay the bill over five years in six instalments, starting this month.

“It is our civic duty and responsibility to pay all taxes,” the family said in a statement released by Samsung.

The share price of Samsung C&T Corp - the Samsung conglomerate’s de facto holding company - dropped as much as 5.5 percent after the statement, which provided no detail on how Lee’s shares would be distributed or sold, nor specifics on how the family planned to fund the payments.

“There was general investor disappointment as no details about how the stakes will be divided were revealed,” said analyst Lee Sang-hun at HI Investment & Securities.

Investors will instead need to wait for regulatory filings to discover changes in shareholding by Lee’s son and Samsung Electronics’ vice chairman Jay Y. Lee or other family members.

The family had been discussing using shares in affiliated companies as collateral for personal loans to pay part of the tax bill to avoid selling Samsung holdings, Reuters reported last week.

Analysts have said the family is likely to use loans and dividends from both their own and Lee’s shares to pay the tax.

Lee’s shareholding, by value, includes 4.18 percent of Samsung Electronics, 0.08 percent of Samsung Electronics preferred shares, 20.76 percent of Samsung Life Insurance Co Ltd, 2.88 percent of Samsung C&T, and 0.01 percent of Samsung SDS Co Ltd.

Jay Y. Lee is the largest shareholder of Samsung C&T with a 17.33 percent stake.

The heir is currently halfway through a 30-month jail sentence for bribery and other offences. The presidential Blue House on Tuesday dismissed calls from business lobby groups for a pardon.

Read more Business