Samsung Heirs to Pay More Than $10.78 Billion In Inheritance Taxes
Heir of Samsung Lee Jae Yong Sentenced to Prison for Two Years and Six Months Before Resuming Role in The Tech Firm
The family of the chairman of Samsung Electronics, Lee Kun-hee, would be paying more than 12 trillion won (which is equivalent to $10.78 billion) in the form of inheritance taxes on his real estate. The country of South Korea has become one of the regions across the world which has the highest number of rates for inheritance taxes.
Scandals surrounding Lee family
Chairman Lee, who has been credited for the transformation of Samsung into a global giant for electronics, and had died in the month of October last year. The tax issues of the family have been under close monitoring by the investors, as it has the possibility of affecting the stock shares of the Lee family in Samsung Electronics.
However, the Samsung shares that have been listed under various divisions were accidentally shown to be mixed on the news, which was unable to clarify regarding the selling of shares is true or not. The investors now require to wait for the time being for regulatory filings to be able to discover the changes which have occurred in the shareholdings by the son of Chairman Lee, along with the vice-chairman of Samsung Electronics Jay Y. Lee, who has been known as the de facto head of the tech firm since the year 2014.
Vice-Chairman Jay Y. Lee is currently being held in prison as he is serving his sentence of two years and six months after he was found guilty for his participation in the bribery scandal, which also involved the former President of South Korea Park Geun-Hye.
The bribery cases was a retrial for an earlier case that involved Park Geun-Hye, who was also sentenced to prison for being found guilty for corruption and bribery. The ruling which has been made by the high court on the heir for Samsung Electronics, Lee Jae Yong, would likely have ramifications for his role in the upcoming future at Samsung.
After the news had been made public regarding the sentence on Samsung heir, the shares of the tech giant dropped more than 4% before they were able to claw their way back up.
The jail term received by Lee Jae Yong has made a temporary pause in his decision-making authority at the conglomerate.
According to the experts, the sentence by the high court could possibly create a vacuum in his leadership along with hampering the decision making of Samsung on large scale investments made by the firm in the future.
In the year 2014, in which Lee Jae Yong’s father Lee Kun-hee was hospitalized for some time after suffering from myocardial infarction, his son was able to assume the leadership role of the tech firm Samsung.
Huge tax bill
According to the statement provided by Samsung Electronics which said that the payment for the inheritance tax is the largest transaction ever done across the country of South Korea and even across the world.
It stated that the Samsung’s Lee family is expected to pay more than 12 trillion won in the form of taxes which is related to their massive amount of inheritance they had received majorly due to Samsung, which is worth around half of the value of the total amount of real estate owned by the late chairman Lee Kun-hee.
A large number of paintings and antiques in the collection would be given in the form of a donation to the National Museum of Korea along with some of the other cultural organizations by the ex-chairman of Samsung Electronics. The collection of the artwork includes famous artists work like Pablo Picasso, Marc Chagall, Claude Monet, Salvador Dali, Joan Miro and Paul Gauguin.
According to the reports from the national media, the charitable donations would consequently reduce the tax liability of the Lee family, who owns one of the largest tech firms, Samsung Electronics.
At 50%, the rate of inheritance taxes in South Korea has become the second-highest across the world after Japan. A premium could possibly be added to the stock shares of the company if the deceased has the controlling interest in the firm, which could potentially further increase the top rate.
In comparison, in the United States and the United Kingdom, the inheritance taxes are generally taxed at 40%, meanwhile at an average amount of 15% throughout the Organization of Economic Corporation and Development.