Lee Family Donates Art to Ease $10.78 Billion Tax Bill

The family of the late Samsung Electronics chairman Lee Kun-hee is expected to pay over 12 trillion Korean won ($10.78 billion) in inheritance taxes. Mr. Lee passed away in October last year, but his contributions played a huge role in turning Samsung into a global giant and economic powerhouse for Korea.

Investors are keeping a close eye on the tax issue, which could have serious implications on the stakes of the Lee family in Samsung. It is still unclear whether any shares would be sold.

Changes in Jay Y. Lee’s holdings, Mr. Lee’s son, will only be discovered once regulatory filings have been submitted. Jay Y. Lee has been the de facto head of Samsung Electronics since 2014, but he is currently serving two years and six months in prison after being caught in a bribery scandal with Korea’s former president Park Geun-hye.

This massive tax bill is one of the largest ever in Korea, and even globally, according to Samsung. The family of Mr. Lee “expects to pay more than 12trn won in taxes related to inheritance, which is more than half of the value of the late chairman’s total estate,” the firm said in a statement.

Mr. Lee’s family plans to donate antiques and paintings to the National Museum of Korea and other cultural organizations in hopes of reducing their tax liability. The late chairman’s collection includes works by Marc Chagall, Pablo Picasso, Paul Gauguin, Claude Monet, Joan Miro, and Salvador Dali.

South Korea’s inheritance tax, which is at 50%, is the world’s second-highest after Japan’s 55%. The top rate could potentially be pushed higher by adding a premium if the deceased has a controlling interest in the company.

Source: BBC