On Sunday (26/10), the news broke that Samsung’s big boss Lee Kun-hee had passed away. The family, in this case is the heirs, must pay an inheritance tax to the South Korean government (South Korea).
The wealth of South Korea’s richest man is estimated a $ 20.7 billion. Most of his wealth comes from his shares in four Samsung units.
The heirs must pay inheritance tax
The heirs must pay taxes of around $10 billion. CEO of the Analysis Company, Chung Sun-Sup, said the heirs were unlikely to sell shares to finance the tax.
On the issue of paying taxes, there is speculation that Samsung Group companies will increase dividends to pay the tax bill.
“The sale of shares can be problematic because it reduces the family’s control over the group. There is no conglomerate will do it. Instead, most of them choose to make cash payments for five years. Cash can be prepared through dividends or salaries,” Chung said, quoting frombloomberg.com, Monday (26/10/2020).
Meanwhile, Samsung Electronics declined to comment on the family’s plans to pay and share the inheritance. However, it was announced that all taxes related to inheritance will be paid in a transparent manner. It is as required by law.
Lee Kun-hee’s shareholding details
Lee’s ownership includes 4% ownership in the world’s largest smartphone, television and memory chip maker and 21% in Samsung Life Insurance Co., which owns the second largest share of Samsung Electronics.
His only son, Jay Y. Lee, has been running the company since his father had a heart attack in 2014. If he inherits all shares in Samsung Electronics and Samsung Life Insurance, he is said to be able to use dividends and personal expenses to prepare tax payments.
“It is uncertain how much cash assets the family that they have, but dividend income will not be sufficient to cover tax costs. Therefore, it is very likely that the family will rely on personal financing,” said Jongwoo Yoo, analyst at Korea Investment & Securities.