Samsung heirs to complete record 12 trillion won inheritance tax payment this month

The family of the late Samsung Group Chairman Lee Kun-hee is set to complete one of the largest inheritance tax payments in South Korean history this month, finalising a six-instalment settlement totalling approximately 12 trillion won (US$8 billion).

The final payment closes a process that began in 2021, following Lee Kun-hee's death in 2020. Industry sources confirmed on Sunday that all four heirs will meet their obligations before the end of the month.

The heirs

The estate left by Lee Kun-hee was valued at approximately 26 trillion won and comprised Samsung shares, real estate and private art collections. The inheritance tax liability, estimated at around 12 trillion won, ranks among the largest ever levied on a single estate in South Korea.

The four heirs — widow Hong Ra-hee, honorary director of the Leeum Museum of Art; son and Executive Chairman Lee Jae-yong; daughter Lee Boo-jin, chief executive of Hotel Shilla; and daughter Lee Seo-hyun, president of Samsung C&T — bore different portions of the bill.

Hong Ra-hee faced the largest individual liability at approximately 3.1 trillion won. Lee Jae-yong's share stood at around 2.9 trillion won, followed by Lee Boo-jin at 2.6 trillion won and Lee Seo-hyun at 2.4 trillion won.

Diverging payment strategies

Family members adopted markedly different strategies to finance their respective obligations over the five-year payment window.

Hong Ra-hee and her two daughters progressively sold stakes in key Samsung affiliates, including Samsung Electronics, Samsung SDS and Samsung C&T. Earlier this year, Hong signed a trust agreement covering the sale of 15 million Samsung Electronics shares, explicitly stating that the proceeds were intended to discharge her remaining tax liability.

Lee Jae-yong took a different approach. Rather than divesting his holdings in core Samsung companies, he relied on dividend income and personal loans to fund his payments. Analysts interpreted this decision as a deliberate effort to protect his grip on Samsung's ownership structure, which is centred on Samsung C&T.

The strategy appears to have strengthened his position. His stake in Samsung Electronics has risen to 1.67 per cent from 0.70 per cent prior to inheriting his father's shares. His holding in Samsung C&T increased to 22.01 per cent from 17.48 per cent, while his stake in Samsung Life Insurance climbed sharply to 10.44 per cent from just 0.06 per cent.

Dividends as a key funding source

Across all four heirs, dividend income from Samsung affiliates has provided substantial financing. Since Lee Kun-hee's death in 2020, the family is estimated to have received approximately 4 trillion won in dividends. When dividends accumulated prior to his passing are included, the total is believed to exceed 6 trillion won — covering the majority of the overall tax burden.

Rising share prices in key affiliates, including Samsung Electronics, also helped ease the financial pressure associated with converting assets into liquidity.

A turning point for Samsung

Analysts said the completion of the tax payments represents a structural turning point for the group, removing a significant source of governance uncertainty that has shadowed Samsung's management for the past five years.

Park Ju-gun, chief executive of corporate tracker Leaders Index, said the timing carries particular significance. "This year is particularly meaningful as the completion of inheritance tax payments coincides with the resolution of legal risks and improving earnings at Samsung Electronics," he said.

Park added that attention would now turn to whether Lee Jae-yong would present a detailed road map for his stated "New Samsung" initiative.

The conglomerate is widely expected to move swiftly on investment and restructuring decisions that had been deferred during the inheritance process. Semiconductors, artificial intelligence and biopharmaceuticals have been identified as the primary focus areas for accelerated capital deployment and business reorganisation.

Solid earnings in Samsung's semiconductor division, combined with a reduction in the legal uncertainties surrounding Lee Jae-yong over the past year, have further strengthened the conditions for a forward-looking pivot in group strategy.