Video source: YouTube, Arirang News
The family of Samsung Electronics Co’s late chairman said Wednesday it will be paying off a massive inheritance tax bill of $10.78 billion and donating his vast private art collection to help offset tax liability, according to reports.
In a statement, Lee Kun-hee’s family said, “As provided for under the law, the Family plans to pay the full amount of the inheritance tax over a period of five years, starting in April 2021.”
The family noted that the inheritance tax payment is one of the largest in the history of South Korea and globally and is “equivalent to three to four times the Korean government’s total estate tax revenue last year.”
At 50%, South Korea’s inheritance tax is the world’s second highest, after Japan. According to the BBC, a premium can be added to shares if the deceased has a controlling interest in a company.
Lee passed away in October 2020 at the age of 78, after growing the Samsung Group into South Korea’s largest chaebol, or family-run conglomerate. He took over the company in 1987 following the death of his father, Lee Byung-chul, who founded Samsung.
Reuters had reported that Lee was the wealthiest stock owner in South Korea and had an estate valued at about $23.4 billion.
According to CNBC, the family will likely fund the inheritance taxes with stock dividends, but could also take out bank loans. The family did not say how it will split Lee’s stockholdings.
In their statement Wednesday, the family said it plans to donate about $900 million to healthcare and medical causes.
“The late Chairman Lee’s collection of antiques, Western paintings and works by Korean artists — approximately 23,000 pieces in total — will be donated to national organizations,” the family said, in recognition of his passion for art and “his belief in the importance of passing on our cultural heritage to new generations.”
Lee’s personal art collection, which includes works by Picasso, Monet and Chagall, is valued at $1.76 billion.
According to the BBC, investors are closely watching the tax issue because it could impact the family’s stake in Samsung. Any changes in holdings by Lee’s son and Samsung’s vice chairman, Jay Y. Lee, who has been de facto head since 2014, would not be revealed until the company’s next regulatory filing.
Jay Y. Lee is currently serving two years and six months in prison for his role in a bribery scandal involving the country’s former President Park Geun-hye.
Source: Equities News