Samsung heirs to pay record $10bn inheritance tax bill

Saleha Riaz
·2 min read

Watch: Samsung Heirs to Pay $11 Billion of Inheritance Tax

The family of Samsung Electronics' (005930.KS) former chairman Lee Kun-hee, who died in October last year, will have to cough up 12 trillion won (£7.8bn, $10.78bn) in inheritance taxes on his estate.

Lee’s heirs are his spouse Hong Ra-hee, son, Samsung Electronics vice chairman Jay-yong, and his two daughters Boo-jin and Seo-hyun.

A November 2020 report in The Korea Herald said that “while Samsung Group has yet to unveil the deceased leader’s will or his plan to bequeath the assets, these four will be the beneficiaries" as per Korean law. 

It added that Hong Ra-hee’s share of the inheritance will be 50% more than those of the three children.

Samsung Electronics chairman Lee Kun-hee with daughters Lee Boo-jin (R) and Lee Seo-hyun. Photo: Reuters
Samsung Electronics chairman Lee Kun-hee with daughters Lee Boo-jin (R) and Lee Seo-hyun. Photo: Reuters
Samsung Electronics Chairman Lee Kun-hee (C) attends the celebration of his 71st birthday at the Shilla hotel with his wife Hong Ra-hee in Seoul January 9, 2012.   REUTERS/Kim Hong-Ji (SOUTH KOREA - Tags: BUSINESS)
Lee Kun-hee (C) with his wife Hong Ra-hee. Photo: Reuters

She will inherit 2.6tn won in stocks, while Jae-yong, Boo-jin and Seo-hyun will each get 1.7tn won worth of shares.

Lee Kun-hee’s estate includes shareholdings in Samsung Electronics (which at the time of writing was trading at 82,100 won) as well as smaller units such as Samsung Life Insurance and Samsung C&T.

Jay-yong, who according to the BBC has been the de facto head of Samsung Electronics since 2014, is currently in prison. He was given a sentence of two years and six months for involvement in a bribery scandal related to South Korea’s former President Park Geun-hye.

Lee Kun-hee's son is currently in jail. Photo: Press Association
Lee Kun-hee's son is currently in jail. Photo: Press Association

Boo-jin is the president and chief executive of Hotel Shilla. An affiliate of Samsung, it operates luxury hotels and duty-free shops.

Some reports have predicted she might take over the empire, given her brother is in jail. Forbes estimates her net worth at the moment is about $2bn (£1.4bn).

Her younger sister Seo-hyun oversees the Samsung Welfare Foundation, a charity founded by her father. She joined Samsung Group's Cheil Industries, a textile firm, as a manager in 2002. Forbes estimates her current net worth to be $1.8bn.

The BBC said the tax issue is being followed closely by investors as it could have affected the Lee family's stake in Samsung, but they will need to wait for regulatory filings.

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Lee's collection of 23,000 antiques and paintings will be donated to the National Museum of Korea among other cultural organisations. Media reports have said this will reduce the family's tax liability.

At 50%, South Korea's inheritance tax rate is the second highest in the world, after Japan.

Watch: What is inheritance tax?