© Reuters. FILE PHOTO: Lee, chairman of Samsung Group, reacts at press conference regarding his resignation at company headquarters in Seoul
SEOUL (Reuters) – The family of late Samsung Electronics (OTC 🙂 chairman Lee Kun-hee said on Wednesday they would pay more than 12 trillion won ($ 10.78 billion) in inheritance taxes for the succession of the late patriarch.
Lee, who is credited with transforming Samsung (KS 🙂 into the world’s largest smartphone and memory chip maker, died on October 25. Its holdings included stakes in Samsung subsidiaries valued at $ 17 billion.
The Lee family’s handling of the hefty inheritance tax bill – one of the largest ever in Korea and the world – had been closely watched as it could have resulted in the family’s majority stake being diluted in Samsung.
The family had discussed using shares in affiliates as collateral for personal loans to pay part of the tax bill, a move that would avoid the sale of their vast Samsung holdings, Reuters reported last week, citing sources.
The family’s statement on Wednesday did not give details on how Lee’s shares will be divided among the heirs or whether any will be sold. Besides the loans, the family is expected to use dividends from its own stake and Lee’s to pay tax, analysts said.
Lee’s holdings included a 4.18% stake in Samsung Electronics, 0.08% preferred shares of Samsung Electronics, 20.76% of Samsung Life Insurance, 2.88% of Samsung C&T and 0.01% of Samsung SDS, which the South Korean tax code estimated was worth around 18.96 trillion won ($ 17 billion).
South Korea’s tax code allows payment in installments, with one-sixth of the total tax bill payable first, then the remainder over five years at an annual interest rate currently set at 1.2%.
The family also announced that they would donate one trillion won to public health charities, including the establishment of a laboratory specializing in infectious diseases. Lee’s extensive collection of antiques and paintings will be donated to the National Museum of Korea and other cultural organizations.
($ 1 = 1,113.3700 won)
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