Samsung shares came under the market spotlight as the amount of inheritance tax was set at a record 11.03 trillion won ($9.96 billion) based on closing prices of the stocks on Tuesday.
Among shares held by late Samsung chairman Lee Kun-hee are those of tech giant Samsung Electronics, IT solutions developer Samsung SDS, construction firm Samsung C&T, and insurer Samsung Life Insurance. According to the nation’s sole securities exchange operator Korea Exchange, the value of Lee’s shares of Samsung Group affiliates came to 22.1 trillion won.
The value of inherited stocks is set based on the average closing prices of stocks over four months -- two months before and after a base date. In Samsung’s inheritance case, the base date is Oct. 23, the last trading day before the late chairman passed away on Oct. 25. Therefore, the amount of inheritance is calculated based on the average closing prices between Aug 24 and Dec. 22.
The value of stocks that Lee’s bereaved family will receive came in at 18.96 trillion won — the average value of the chairman’s shares for the four-month period.
Under the local tax rules, the maximum tax rate of 50 percent is imposed on inherited stocks valued over 3 billion won, and 20 percent is additionally levied on the largest stakeholder. Heirs can receive a 3 percent deduction for voluntary reporting.
Based on the local tax rules, the inheritance tax for Samsung shares came to slightly more than 11 trillion won, the highest-ever taxation for individuals in the nation. The late chairman also left properties, including a part of Samsung Everland and his Hannam-dong residence, which are also subject for additional taxation.
The stock prices of most Samsung Group affiliates remained almost flat on Tuesday except for Samsung C&T and Samsung Life Insurance. The tech giant’s common stock and preferred stock closed at 72,300 won and 68,500 won, down 0.96 percent and 0.44 percent respectively. Samsung C&T and Samsung Life Insurance saw their stock prices jump more than 6 percent in the morning trading session, but slid in the afternoon. The construction firm’s shares closed at 132,500 won, up 3.92 percent, while the insurance firm’s shares rose 5.54 percent to 80,000 won.
According to a regulatory filing in June, the late chairman holds a 4.18 percent stake in Samsung Electronics, 0.08 in the firm’s preferred stocks, 17.33 percent in the construction unit, 0.06 percent in the insurer, and 9.2 percent in the IT solutions firm. He also owns a 0.09 percent stake in non-life insurer Samsung Fire & Marine Insurance.
The Samsung heirs and heiresses can choose to pay the inheritance tax through installments. After filing a report over inheritance tax and paying one-sixth of inherited assets at the tax authority, they can pay the rest for the next five years.
Lee is survived by his wife Hong Ra-hee and three children — Jae-yong, vice chairman of Samsung Electronics, Boo-jin, CEO of Hotel Shilla, and Seo-hyun, chief of Samsung Welfare Foundation.
By Kim Young-won (firstname.lastname@example.org