The owning family of Samsung Group, South Korea's biggest chaebol, initiated the process of paying a world-record inheritance tax of 12 trillion won ($10.3 billion), Nikkei reported
Lee Kun-hee, chairman of Samsung Group, died in October last year, leaving behind asset worth $20.9 billion.
Under the current South Korean inheritance tax system introduced in 2000, 50-percent tax rate is applied to inherited assets that exceed 3 billion won. That is the second highest among member countries of the Organization for Economic Cooperation and Development (OECD) next only to Japan at 55 percent.
Besides the country's 50% inheritance tax rate a 20% premium is added to the appraisal value of the deceased person's holdings, which will be based on the four-month average of the shares' closing market price before and after the death.
Samsung family members will be paying the inheritance tax mostly through share sale in Samsung group companies and proceeds from real estate
Hong Ra-hee, the deceased chairman's widow, has signed an agreement to sell a 0.33% stake in Samsung Electronics to a bank.
Lee Jae-yong, de facto heir of the family, who holds stakes worth a total of about 7.2 trillion won in six of Samsung Group's listed affiliates, is expected to pay off his inheritance tax in part by using cash, dividends and proceeds from real estate sales.
Daughters Lee Boo-jin, CEO of Hotel Shilla, and Lee Seo-hyun, who runs the Samsung Foundation, each own stakes in Samsung C&T and Samsung SDS worth about 1.6 trillion won. They are reportedly selling stake in Samsung SDS, the group's software development arm and Samsung insurance to pay the inheritance tax.
South Korea's transformation from an economic minnow to one of the world's powerful economic engines owes much to its sprawling, family-owned conglomerates called chaebols. Samsung, which contributes to about 17% of the South Korean economy, is the biggest of them all with Besides dominating presence in electronics and technology, Samsung also ventures in finance, engineering, education, entertainment and even sports.
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