One of the world’s biggest tax inheritance settlements is taking place; the heirs to South Korea’s Samsung group have announced that they are to pay more than ₩11 trillion won (over $10 billion) in death duties. The late chairman of the electronics company- Lee Kun-hee – was the country’s richest man when he passed away late last year at the age of 78 leaving behind an estimated ₩22 trillion won ($19.6 billion) in assets.
South Korea have very stringent inheritance tax laws which are also escorted by high rates, which has resulted in the family receiving a hefty bill. The inheritance is more than half the value of the late Lee’s estate as South Korea can charge up to 60% of inherited shares for large shareholders. Said shares are inclusive of Samsung Electronics, Samsung Life, and Samsung C&T as well as some real estate.
The majority of the late chairman’s stakes in Samsung affiliates are likely to go to his younger son as the eldest is currently serving a prison sentence for bribery, embezzlement, stock manipulation, and other offences. Lee had apologised last May for some things he had said regarding governance and pleaded that there would no longer be any more controversy regarding the succession.
The family are intending on paying back the bill over six instalments which are said to have already started. The legal deadline for the family to file for tax return was the 30th of April 2021; the amount of arguably the biggest inheritance tax bill in South Korea and internationally.
The majority of the remaining assets left behind by the late chairman are consistent of artwork which is estimated to be around 23,000 pieces; these are inclusive of pieces by Marc Chagall, Pablo Picasso, Paul Gauguin, Claude Monet, Joan Miro, and Salvador Dali.
The collection is also inclusive of Korean artists such as Kim Thanks, Park Soo-Keun, Jung Scop, and Chang Urchin. All of the pieces will be donated to South Korea’s national museum for modern art and other national organisations. Reports note that the donation of art pieces are said to reduce the family’s tax liability.
The Lee family are also said to be donating around 1 trillion won (approx. $902 million) to a variety of philanthropic causes; around 700 billion won (approx. $631 million) of the bill will be spent on efforts to help and respond to the rate of infectious disease; 500 billion won (approx. $451 million) will be spent on efforts to build specialist hospitals; 200 billion won (approx. $360 million) will be spent on a laboratory to support and research into vaccines and treatments for sicknesses and diseases. The remainder of the money will be spent on medical expenses for children who are battling cancer and rare diseases.
Although the family have been given more than a hefty fine, it is admirable that the money is going to be used to help those who need it most. A large proportion of the money is being used to help those who are struggling with their physical health and to those who are opting to contribute to the betterment of those who are in need.
Conclusively, this is the largest inheritance tax bill South Korea has ever seen and arguably the world. The strict inheritance laws and the high rates are ultimately what led to the family getting fined such a huge amount. The assets left behind by the late electronics chairman are variant in real estate, art pieces, and equity, which is now being distributed amongst differing national South Korean organisations to reduce the family’s tax liability and to also aid those who are in need.
To keep up with the latest commercial news, click on commercial to get your daily dose.
Donate & Support