The heirs to the South Korean electronics giant Samsung are facing what is believed to be one of the largest ever tax bills after the death of Lee Kun-hee.
Mr Lee, the third son of Samsung’s founder, is credited for transforming the company, previously known for low quality goods, into the world’s largest manufacturer of televisions, memory chips and smartphones.
Following Mr Lee’s passing in October 2020, his family is now expected to pay 12trn won (€9bn) in inheritance tax, based on South Korea’s 50 per cent inheritance tax rate, the second highest in the world after Japan.
If the deceased has a controlling interest in a company, a premium may be added to shares, taking the top rate even higher.
Samsung has issued a statement saying that the payment is one of the largest ever, both in Korea and globally.
It said that 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.”
The matter has been followed closely by investors, as it could have affected the Lee family’s stake in Samsung, although shares in the company’s various divisions, listed separately on stock exchanges, were mixed following the news.
It is thought that the family will be forced to sell off some of its shareholding to afford the tax bill.
Investors will now need to wait for regulatory filings to find out whether the shares held by Mr Lee’s son, Samsung Electronics vice chairman Jay Y. Lee, have changed hands.
The extensive art collection of the deceased Mr Lee is meanwhile expected to be donated to the National Museum of Korea and other organisations, which may reduce the family’s tax liability.
Marc Chagall, Pablo Picasso, Paul Gauguin, Claude Monet, Joan Miro and Salvador Dali are all represented in the art collection.
Such situations are unlikely to occur in Malta, which enjoys a nil rate of inheritance tax.
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