“Done all capital”, the Samsung family still lacks nearly 3 trillion won in inheritance tax
The family of late Samsung Group Chairman Lee Kun-hee is expected to continue selling its shares in the group’s branches over the next few years, according to market observers. This is the move needed to pay off about 2.9 trillion won ($2.3 billion) in inheritance tax out of a total of about 10 trillion won.
Families can increase dividends or take out loans backed by securities. These are two highly viable options. Along with that, the sale of shares will have a certain impact on the corporation’s cross-shareholding structure.
The family members, headed by Ms. Hong Ra-hee (wife of the late president Lee Kun Hee), is also the director of the Leeum Samsung Art Museum. Also present were Samsung Electronics Vice Chairman Lee Jae-yong, Hotel Shilla CEO Lee Boo-jin and Samsung Welfare Fund Chairman Lee Seo-hyun.
The wife and three children of the late Samsung chairman paid about one-sixth of the total 12 trillion won in inheritance tax last April. The remaining 10 trillion won will be paid in installments over the next five years. Of that total, 11 trillion won is for inheritance of stocks.
So far, the wife and two daughters have sold a total of 1.98 trillion won of Samsung-related shares. However, the annual dividend income of four family members is 856.8 billion won, plus income from other deals is still less than 2.9 trillion won, far from the figure. 10 trillion won.
On March 24, Ms. Hong sold more than 19.94 million shares of Samsung Electronics at 68,800 won per share. The total amount of 1.37 trillion won accounts for 0.33% of her total shares. The price per share is 2.4% lower than the previous closing price. Lee Boo-jin and Lee Seo-hyun sold a total of 610 billion won in shares of Samsung SDS and Samsung Securities.
Yuanta Securities analyst Choi Nam-kon said the family would have to pay 580 billion won a year over the next five years to meet a 2.9 trillion won shortfall. “The family paid 1.15 trillion won in the first installment last year and must pay 1.97 trillion won annually from 2022 to 2026,” he said in a report. “The members have the ability to pay off 2.9 trillion won by selling their shares without significantly affecting the group’s share structure.”
Of the 11 trillion won, 3.1 trillion won will be paid by Ms. Hong. Samsung Electronics vice president will pay 2.9 trillion won, Hotel Shilla CEO will pay 2.6 trillion won, and Samsung Welfare Fund chairman is responsible for 2.4 trillion won.
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