Samsung Family Cough Up $13B Inheritance Tax
The family of Samsung Electronics chairman Lee Kun-hee is set to pay an inheritance tax of A13 Billion following the death of Samsung Group titan Lee Kun-hee who died last year aged 78.
The inheritance taxes on his estate is massive because South Korea has one of the world’s highest inheritance tax rates which is currently 50%.
By comparison, inheritances are taxed at 40% in the US and the UK, and at an average of 15% across the Organization for Economic Cooperation and Development.
Mr Lee is credited with transforming Samsung into a global electronics giant with business calling for the release from prison of his son Lee Jae-yong, who was jailed for bribery and is now facing new charges related to a plan to minimise the taxes the family faced.
Jay Y. Lee is serving two years and six months for his role in a bribery scandal that involved the country’s former President Park Geun-hye.
Shares in various Samsung’s entities were mixed on the news, which provided little clarity about whether or not any shares in the business are set to be sold as part of the settlement.
Investors will instead need to wait for regulatory filings to discover changes in shareholdings by Lee’s son and Samsung Electronics vice chairman Jay Y. Lee, who has been the de facto head of Samsung Electronics since 2014.
Mr Lee’s family “expects to pay more than 12trn won in taxes related to inheritance, which is more than half of the value of the late chairman’s total estate,” a spokesperson in South Korea said.
A massive collection of Mr Lee’s antiques and paintings will be donated to the National Museum of Korea and other cultural organisations they are worth hundreds of millions.
His collection included works by artists Marc Chagall, Pablo Picasso, Paul Gauguin, Claude Monet, Joan Miro and Salvador Dali.
Media reports said the donations will reduce the family’s tax liability.
This week South Korea’s leading business conglomerates submitted a petition to the presidential office, pleading for a pardon of Samsung Group’s de facto leader Lee Jae-yong.
The petition came amid burgeoning concerns over a global semiconductor shortage, the industry’s move marked the first case in about 10 years that business circles have publicly called for the release of a jailed business executive.