Samsung household declares plans to pay off greater than $10 billion of inheritance tax

A Samsung flag (R) and South Korean nationwide flag flutter at the company’s Seocho constructing in Seoul on April 28, 2021.

JUNG YEON-JE | AFP through Getty Images

SINGAPORE — The household of Samsung Electronics’ unimaginative chairman announced Wednesday they’ll be paying off a massive inheritance tax invoice of further 12 trillion Korean won (about $10.78 billion).

The inheritance tax charge is one amongst the greatest within the historical past of South Korea and globally — “the same to 3 to four times the Korean government’s total estate tax income closing twelve months,” Lee Kun-hee’s household acknowledged in an announcement.

“As equipped for beneath the laws, the Family plans to pay the elephantine quantity of the inheritance tax over a interval of 5 years, initiating in April 2021,” the Lee household acknowledged.

Lee handed away in October 2020 at the age of 78, after rising the Samsung Neighborhood into South Korea’s greatest conglomerate. He took the helm in 1987 following the loss of life of his father, Lee Byung-chul, who founded the conglomerate.

Lee’s massive estate

Yonhap reported that the household is at risk of fund the inheritance taxes with stock dividends however could well receive bank loans.

The household did no longer say how the members will spoil up the patriarch’s stockholdings.

Reuters reported in October that Lee turned into as soon as the wealthiest stock proprietor in South Korea.

His estate turned into as soon as valued at about $23.4 billion bucks, based fully on Reuters which cited native media. Lee’s stock ownership contains 4.18% of Samsung Electronics fashionable shares and nil.08% of most smartly-most fashionable shares, 20.76% stake in Samsung Lifestyles Insurance, 2.88% stake in Samsung C&T and a 0.01% stake in Samsung SDS, reported Reuters.

Shares of those corporations declined after records of the tax announcement on Wednesday. Samsung Electronics fell 0.97% and Samsung C&T dropped 2.92%. Samsung SDS slipped 0.8% while Samsung Lifestyles Insurance turned into as soon as 0.24% lower.

The household also acknowledged they’ll be donating 1 trillion won to health-care and scientific causes.

“The unimaginative Chairman Lee’s sequence of antiques, Western paintings and works by Korean artists — roughly 23,000 pieces in total — will be donated to nationwide organizations,” they acknowledged, in recognition of his passion for paintings sequence and “his perception within the significance of passing on our cultural heritage to contemporary generations.”

South Korean chaebols

Samsung is South Korea’s greatest chaebol — or sizable, household-toddle conglomerates that have historically played a needed position within the nation’s financial vogue.

Such corporations, which consist of the Hyundai Motor Neighborhood and SK Neighborhood, alter massive networks of corporations through a circular preserving construction and their alter most steadily exceeds money-drift rights. Which arrangement households most steadily wield undue affect over neighborhood corporations without reference to their slightly miniature verbalize shareholdings.

Soundless, many electorate have demanded reforms to curtail the ability of the chaebols as considerations linger over crony capitalism.

In January, Samsung heir Jay Y. Lee turned into as soon as sentenced to 2 and a half of years in detention heart by a South Korean court. The younger Lee’s return to penal advanced came following a retrial of a bribery case sharp frail President Park Geun-hye, based fully on Yonhap.

— CNBC’s Chery Kang and Saheli Roy Choudhury contributed to this utter.

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