The family of the late Chairman of the Samsung Group, Lee Kun-hee, is nearing the completion of a sizeable inheritance tax payment. The amount, approximately 12 trillion won ($7.95 billion USD), is expected to be settled later this month.
Final Installment
The heirs, including the Chairman’s widow Hong Ra-hee and their children Lee Jae-yong, Lee Boo-jin, and Lee Seo-hyun, will be making the sixth and concluding payment this month. This plan was initiated in 2021 after the Chairman’s passing in 2020.
Estate Valuation
Lee Kun-hee’s estate was estimated to be worth around 26 trillion won, comprising stocks, real estate, and art collections. Hong Ra-hee is shouldering the most significant proportion of the tax, around 3.1 trillion won. The children follow closely behind, each paying between 2.4 to 2.9 trillion won.
Payment Strategies
The family members navigated the tax payment through various strategies. Hong and her daughters allegedly sold shares in key Samsung affiliates like Samsung Electronics, Samsung SDS, and Samsung C&T. Hong also entered into a trust agreement earlier this year to sell 15 million Samsung Electronics in an apparent move to cover her portion of the tax.
In contrast, Samsung Electronics Chairman Lee Jae-yong financed his share of the tax through dividends and personal loans. This approach is perceived as an attempt to maintain his influence over the group’s ownership structure, primarily centered on Samsung C&T.
Investment Plans
Over the past five years, the family is estimated to have received about 4 trillion won in dividends from affiliates following Lee Kun-hee’s death, and more than 6 trillion won when considering earlier dividends.
With the tax nearly settled, the group is predicted to channel more investment into sectors like semiconductors, artificial intelligence, and biopharmaceuticals. The completion of the inheritance tax payments is significant as it coincides with improved earnings at Samsung Electronics and the resolution of legal risks.
Questions & Answers
What was the total worth of Lee Kun-hee’s estate?
The estate, which comprised stocks, real estate, and art collections, was estimated to be worth around 26 trillion won.
How did the Lee family manage to pay off the inheritance tax?
The family used various strategies to pay the tax. This included selling shares in key Samsung affiliates and gaining dividends. Lee Jae-yong also utilized personal loans.
What is the expected future investment direction of the Samsung Group?
With the tax nearly settled, the Samsung Group is expected to increase investment in sectors like semiconductors, artificial intelligence, and biopharmaceuticals.
