The family of deceased Samsung Electronics chairman Lee Kun-hee said on Wednesday it will pay more than 12 trillion won or $10.78 billion in inheritance taxes for the estate of the late patriarch, Reuters reported.
Lee, who is credited with transforming Samsung into the world’s largest smartphone and memory chip maker, died on Oct. 25. His estate, valued at around 26 trillion won or $23.4 billion according to local media, included shareholdings in Samsung affiliates valued at $17 billion.
The Lee family’s handling of the hefty inheritance tax bill – one of the largest ever in both Korea and globally – had been closely watched as it could have resulted in the dilution of the family’s controlling stake in Samsung.
The family’s statement on Wednesday did not give details of how Lee’s shares will be distributed among the heirs or whether any will be sold.
The family had been discussing using shares in affiliated companies as collateral for personal loans to pay part of the tax bill, a measure that would avoid the sale of their extensive Samsung holdings.
The family is also expected to use dividends from both their own and Lee’s shareholdings to pay the tax, analysts have said.
Lee’s shareholdings included a 4.18 percent stake in Samsung Electronics, 0.08 percent of Samsung Electronics preferred shares, 20.76 percent of Samsung Life Insurance, 2.88 percent of Samsung C&T, and 0.01 percent stake in Samsung SDS, which according to South Korean tax code valuation were worth about 18.96 trillion won ($17 billion).
Any changes in shareholding by Lee’s son and Samsung Electronics vice chairman Jay Y. Lee or other family members are expected to be reported in quarterly regulatory filings.
The family will make payments in instalments, as allowed by South Korea’s tax code, with one-sixth of the total tax bill to be paid first, then the rest over five years at an annual interest rate currently set at 1.2 percent, according to tax officials.