“Shares Worth 2.6 Trillion Won, but Taxes Alone Total 1.6 Trillion Won”... Chairman Lee Jae-yong Receives 11.15 Million Shares From His Mother

[Financial News] Lee Jae-yong, chairman of Samsung Electronics, received Samsung Electronics shares worth 2.6 trillion won as a gift from his mother, Hong Ra-hee, honorary director of Leeum Museum of Art. The gift increased Lee’s direct stake in Samsung Electronics to 1.75%. His gift tax bill is estimated at approximately 1.58 trillion won.
According to the Financial Supervisory Service’s Data Analysis, Retrieval and Transfer System (DART) on the 15th, honorary director Hong gifted Lee 11,158,000 common shares of Samsung Electronics that she held on the 12th. The transfer was a follow-up to the gift agreement signed on the 12th of last month and the transaction plan disclosed the following day, and the shares were transferred according to the planned schedule.
The transaction increased Lee’s Samsung Electronics holdings from 105,219,053 shares to 116,377,053, raising his stake by 0.17 percentage points, from 1.58% to 1.75%. Hong’s holdings, meanwhile, fell from 65,311,600 shares to 54,153,600, reducing her stake from 0.98% to 0.81%. As this was a gift from mother to son, the combined stake held by the largest shareholder and related parties did not change. However, the transfer has governance significance because it further strengthened Lee’s direct personal control as head of the group.
The market’s attention is focused on the astronomical gift tax bill. Under the Inheritance and Gift Tax Act, the taxable value of gifts of listed shares is calculated based on the average closing price over the two months before and the two months after the gift date. Applying Samsung Electronics’ average closing price of 236,305 won over the past two months, the gifted shares are valued at approximately 2.6367 trillion won.
Applying, among other factors, a 20% premium valuation for shares held by the largest shareholder and the top gift tax rate of 50%, Lee’s estimated gift tax bill comes to approximately 1.58 trillion won. However, the final tax payable will be determined after taking into account share price movements through January 12 next year, two months after the gift date, so the amount may vary depending on future share price trends.
The timing of the gift has also drawn attention in business circles because it coincides with Samsung Electronics’ announcement of a large-scale shareholder return policy. During its third-quarter earnings call on the 29th of last month, Samsung Electronics estimated total shareholder returns for the year at 90 trillion to 110 trillion won. It said it would decide at a board meeting in late January next year how to use the remaining 55 trillion to 75 trillion won, after subtracting the approximately 35 trillion won already spent or committed.
This means that major plans to enhance shareholder value, including cash dividends and share buybacks and cancellations, will be announced immediately after the statutory share-price valuation period for calculating gift tax ends. An industry source said, “Samsung Electronics’ schedule for announcing shareholder returns was part of the plan under its existing 2024–2026 policy implementation schedule.” The source predicted, “However, Lee’s final tax bill will be determined by share price movements through mid-January next year, and the shareholder return plan to be announced at the end of the month will have a considerable impact on future share prices and corporate governance.”
[email protected] Moon Young-jin Reporter