The family of Lee Kun-hee, the Samsung heirs, will pay an estimated amount of 10.78 US billion dollars as inheritance taxes on his estates. Inheritance taxes in South Korea are among the highest in the world. They come after Japan which is leading at 50%.
Mr. Lee, who was credited with turning Samsung into a global electronics behemoth, died last October. Investors have been keeping a close eye on the tax issue because it could impact the Lee family’s interest in Samsung.
However, shares of Samsung’s various publicly traded divisions were mixed in response to the report, leaving it unclear if any shares would be sold.
Instead, investors will have to wait for regulatory filings to learn about changes in shareholdings by Lee’s son, Samsung Electronics vice chairman Jay Y. Lee, who has served as the company’s de facto leader since 2014.
Jay Y. Lee is currently serving two years and six months in jail for his part in a bribery case involving Park Geun-hye, the country’s former president.
The Massive Tax Bill
Samsung said in a statement that the payment is one of the highest in Korea and the world. According to a statement, Mr. Lee’s family “expects to pay more than 12 trillion won in inheritance taxes, which is more than half of the late chairman’s total estate.
South Korea has the world’s second-highest inheritance tax rate, after Japan, at 50%. If the deceased had a controlling interest in a business, a premium can be applied to the stock, potentially increasing the top rate even higher.
Meanwhile, Inheritances are taxed at 40% in the United States and the United Kingdom, and at 15% on average around the Organization for Economic Cooperation and Development.
Donation of Paintings
The National Museum of Korea and other cultural organizations will also receive Mr. Lee’s antiques and paintings. The collection includes works by Marc Chagall, Pablo Picasso, Paul Gauguin, Claude Monet, Joan Miro, and Salvador Dali. According to reports in the media, the contributions would lower the family’s tax liability.
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