The family of the late Samsung Electronics chair Lee Kun-hee have said they will pay more than 12tn won (£7.8bn) in inheritance tax and donate his collection of more than 23,000 artworks – including pieces by Salvador Dalí, Pablo Picasso and Jean-Michel Basquiat, and one of Claude Monet’s water lilies paintings – to South Korean national museums.
Lee, who is credited with transforming Samsung into the world’s largest smartphone and memory chip maker, died in October 2020 aged 78 with an estate worth an estimated 26tn won. His family had until Friday to figure out how to pay the inheritance tax bill.
South Korea has among the highest inheritance tax rates in the world, charging 50% of the value of assets, rising to 60% for company shares inherited by large shareholders. By comparison, the UK and the US charge inheritance tax at 40% (above a tax-free threshold of £325,000 in the UK). There are growing calls for a hike in UK and US inheritance tax rates to help fund the recovery from the coronavirus-ravaged economy.
Lee’s wife and three children said they were happy to pay the huge tax bill. “It is our civic duty and responsibility to pay all taxes,” they said in a rare public statement, noting that “the inheritance tax payment is one of the largest ever in Korea and globally”.
They added that the tax they would pay, in instalments over five years, was “equivalent to three to four times the [South Korean] government’s total estate tax revenue last year”.
In order to reduce the tax bill, the family are to donate most of the art collection to South Korean museums. The £1.3bn trove of masterpieces includes works by the Korean artists Park Soo-keun, Lee Jung-seop and Kim Whan-ki, as well as pieces by Marc Chagall, Picasso, Paul Gauguin, Monet, Joan Miró, Dalí and Basquiat.
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The total value of the collection – which includes Chagall’s Bride and Groom with Bouquet and Dalí’s Family of Marsupial Centaurs – is estimated at 2tn won (£1.3bn), far more than the $835m that the late Peggy and David Rockefeller collection sold for at Christie’s in 2018.
The National Museum of Modern and Contemporary Art said the 1,488 pieces it is receiving from the Lee family was its biggest ever private donation.
The family also announced it was donating 1tn won to improve public healthcare, including 500bn won to build South Korea’s first specialist hospital for infectious disease. The family said they hoped the donations would “uphold his legacy and contribute to the creation of a better society”.
Lee had been South Korea’s richest person, and held the title for 12 years, according to Forbes.
The family was mired in scandal in January, when Lee’s son Lee Jae-yong, 52, was jailed for bribery linked to his succession.
