Samsung Electronics Vice Chairman Lee Jae-jong is about to become the third-generation owner of Samsung group and Samsung is reportedly looking for a way for him to pay inheritance taxes in five-year installments. "I understand that Samsung is considering transferring Samsung Electronics Chairman Lee Kun-hee's stake in Samsung Electronics to Samsung Welfare Foundation and Samsung Culture Foundation, but shelved the plan. We understand judging that annual levying and annual payment is the most practical alternative, the group contacted the National Tax Service early this year to inquire about the measure." said an unnamed source. The five-year installment plan should, of course, make it easier for tax payers to pay the tax in some excessive cases, like this one is of course.
We've reported back in September that Lee Jae-jong is probably going to take over the company because of his father's medical condition. Lee Kun-hee suffered a heart attack a few months back and is looking to let his son take over the control of Samsung. Lee Kun-hee holds stakes in Samsung Electronics, Samsung Life Insurance, Cheil Industries, Samsung C&T and Samsung SDS. His son can take control of the entire business group only when he takes over his father's stakes in Samsung Electronics and it's majority stakeholder, Samsung Life Insurance. Lee Kun-hee hold 3.38% (4,985,464 shares) stake in Samsung Electronics and 20.76% (41,519,180 shares) in Samsung Life Insurance. The current real tax rate under the inheritance tax act and the transfer tax act is set at about 65%, Lee Jae-jong will have to pay around 7 trillion won (6.36 billion U.S. dollars) to inherit his father's stakes in Samsung Electronics and Samsung Life Insurance. That is an enormous sum and no wonder they're looking for an installment plan. According to Chaebol.com, the value of Lee Jae-jong's listed share amounted to 3.85 trillion won ($3.50 billion) due to the listing of Samsung SDS. He ranked number one in stockholding among third-generation of Korean family controlled conglomerates ahead of Hyundai Motor's Vice Chairman Chung Ui-sun whose shares are worth 3.83 trillion won ($3.48 billion).
That is a seriously huge amount of money to pay for inheritance tax, I was utterly surprised actually, no wonder they're asking for a 5-year installment plan. Anyhow, what are your thoughts on all this?