Samsung set to focus on investment after inheritance tax payments

(Kim Ho-young)

Samsung Group is expected to shift its business strategy toward investment and restructuring as it moves to complete inheritance tax payments for the estate of late Chairman Lee Kun-hee this month.

According to industry sources on Sunday, the Samsung owner family will pay the final installment of inheritance tax within April. When Lee passed away in 2020, he left behind an estate worth about 26 trillion won ($17.2 billion), including stocks, real estate and artworks. The corresponding inheritance tax was estimated at around 12 trillion won.

The heirs include Hong Ra-hee, honorary director of Leeum Museum of Art (3.1 trillion won), Jay Y. Lee (2.9 trillion won), Lee Boo-jin, president of Hotel Shilla Co. (2.6 trillion won), and Lee Seo-hyun, president of Samsung C&T Corp. (2.4 trillion won). After filing the inheritance tax in 2021, they have been paying it in six installments over five years under a deferred payment plan.

With the final installment to be completed this month, the total tax burden of about 12 trillion won will be resolved.

Over the past five years, the tax burden has shaped group strategy, with Samsung prioritizing governance stability and funding over large-scale investment and restructuring, a period industry observers describe as a “management phase.”

Funding measures reflected this approach. Hong, Lee Boo-jin and Lee Seo-hyun secured liquidity through stake sales and trust arrangements, while Jay Y. Lee retained core holdings.

Jay Y. Lee’s control over the group has strengthened during this period. His stake in Samsung Electronics Co. rose to 1.67 percent from 0.7 percent before the inheritance, while his stake in Samsung C&T Corp. increased to 22.01 percent from 17.48 percent. His stake in Samsung Life Insurance Co. expanded to 10.44 percent from 0.06 percent.

A significant portion of the tax was funded through dividends, with industry estimates putting payouts to the family from affiliates at several trillion won in recent years. Higher share prices also reduced the effective cash burden compared with initial expectations.

With the tax payments ending, the group’s strategic focus is expected to shift toward future investment. In semiconductors, Samsung is likely to increase spending on high-value areas such as high-bandwidth memory and advanced packaging to address growing artificial intelligence demand.

In mobile and consumer electronics, efforts are expected to center on strengthening product competitiveness through on-device AI, while in biopharmaceuticals, additional capacity expansion in contract development and manufacturing is seen as likely.

Large-scale mergers and acquisitions, which had been limited, could resume in areas such as fabless semiconductors, automotive chips and AI software.

Completion of the tax payments is expected to broaden Samsung’s strategic options and support the resumption of delayed investments and restructuring.

Separately, the potential for affiliate separation remains a variable. Industry observers have said Lee Boo-jin and Lee Seo-hyun could pursue more independent business roles, with Lee Boo-jin’s recent increase in her stake in Hotel Shilla seen in that context.