Samsung heirs agree to pay $11 billion in inheritance taxes

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Heirs of the late Samsung Chairman Lee Kun-hee will pay $11 billion in inheritance taxes, Samsung Electronics said.

On behalf of the Samsung family, the company disclosed Wednesday the inheritance process, which includes the donation of $900 million to domestic hospitals and some 23,000 pieces of art to museums.

Samsung heirs, including the imprisoned Samsung Electronics Vice Chairman Lee Jae-yong, will pay $1.8 billion this month, while the remaining $9.2 billion will be paid in installments over the next five years.

The company did not disclose how the four heirs – Lee Jae-yong, his two sisters, and his mother – would divide the assets, which are mostly composed of shares from Samsung conglomerate affiliates.

Lee Kun-hee held 4.18 percent of Samsung Electronics, 20.76 percent of Samsung Life Insurance and 2.88 percent of Samsung C&T. It’s unclear whether he left a will when he died in October.

If there is no will, the heirs will either follow South Korean law or settle on a plan internally. According to statutory ratios, the wife should get a third of the assets while the three siblings would receive 22.2 percent each.

Analysts expect the heirs to divide the wealth and settle matters internally.

“Under the statutory breakdown, Lee Kun-hee’s wife would become the biggest shareholder of Samsung Electronics. I don’t think that will happen,” Park Ju-gun, CEO of a South Korean business tracker called Leader’s Index, said. “Chances are, Lee Jae-yong would inherit most of Samsung Electronics shares. But the split requires every heir to agree. For that reason, I cannot completely rule out the possibility of family feuds.”

Lee Jae-yong holds 0.7 percent of Samsung Electronics, while his mother’s stake amounts to 0.91 percent. He has been the de-facto leader of Samsung Electronics – the world’s top maker of memory chips and smartphones – since his father collapsed of a heart attack in 2014.

Lee Jae-young is in prison for having bribed former South Korean President Park Geun-hye, who is expected to spend the rest of her life in jail after getting impeached in 2017.

Lee Jae-young is serving a 30-month sentence, scheduled for release in July 2022. But he is also standing trial over a separate indictment involving alleged stock price manipulation.

Lee Kun-hee’s multibillion-dollar art collection will mostly be transferred to the National Museum of Korea, with a small number of works contributed to other museums across South Korea.

Samsung founder Lee Byung-chull was an avid art collector, and his son, Lee Kun-hee, also shelled out big bucks to collect Western and Korean masterpieces of various ages.

The collection has works by painters Pablo Picasso, March Chagall and Claude Monet. The list also has renowned modern Korean artists like Kim Whan-ki, Lee Jung-seop and Park Soo-keun.

The Lee Kun-hee collection consists of paintings, pottery, calligraphy and Buddhist art pieces from the ancient and medieval Korean dynasties.

Up to 14 of them were designated as national treasures in South Korea, like the 1751 landscape painting, “Inwang Jesaekdo,” created by legendary painter Jeong Seon. The painting depicts a Seoul mountain after rain and was designated as National Treasure No. 216 in 1984. It will be contributed to the National Museum of Korea.

“What greatly impressed me was the quality of the Lee Kun-hee collection. I sincerely welcome the donation of so many pieces, which will enable people from across the world to enjoy first-class arts,” noted art collector Moon Woong, said. “”In particular, the Samsung family opted to contribute pieces by regional artists to museums in their specific regions. The decision is so endearing because it will culturally benefit so many people.”

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