How Samsung Founder’s Family Could Pay Among World’s Biggest Tax Bills

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How Samsung Founder's Family Could Pay Among World's Biggest Tax Bills

Jay Y Lee (centre) arrives on the Seoul Excessive Court docket on January 18

When Lee Kun-hee was assembling one of many world’s largest privately owned artwork collections, little did he know that it will change into embroiled in his household’s tax woes.

The trove features a portrait of Dora Maar by Pablo Picasso, certainly one of Claude Monet’s water lilies work and hundreds of different works that collectively are estimated to be price between 2.5 trillion gained and three trillion gained ($2.2 billion and $2.7 billion), in keeping with an individual accustomed to the appraisal course of who requested to not be named as a result of he is not approved to talk to the media.

It may show to be a key asset in paying for one of many world’s largest inheritance-tax payments. The Samsung dynasty has till the top of the month to unveil how the household plans to finance the levy of at the very least 11 trillion gained due after Lee’s demise in October. Whereas South Korean legislation does not at the moment enable artwork for use for such funds, some cultural organizations need the federal government to think about altering it to make sure the treasures stay within the nation.

“The concept of paying inheritance tax with artwork hasn’t obtained a lot help as a result of it was perceived as one thing that will solely profit the wealthy,” stated Chung Joon-mo, who co-leads the Korea Artwork Authentication and Appraisal Analysis Middle and was the chief curator of Korea’s Nationwide Museum of Fashionable and Modern Artwork. “However now there’s rising sentiment that it will be of nationwide curiosity to maintain such world class artworks within the nation.”

Over the course of three many years, Lee’s father and Samsung Group founder Lee Byung-chull had constructed a formidable pile of largely historic Korean artworks, almost all of which was donated within the 1980s to arrange Hoam – the museum named after his pseudonym. His son and daughter-in-law later expanded the household’s assortment, buying items by worldwide artists.

Not like his father, the youthful Lee was identified for splurging when he noticed a piece price shopping for, in keeping with Lee Jong-seon, who wrote “Lee Assortment” and helped construct the artwork stash (he is unrelated to the billionaire household). In 2004, the clan based Samsung’s Leeum museum, which homes items resembling Jean-Michel Basquiat’s “Untitled (Black Determine)” and Gerhard Richter’s “Two Candles.”

The Lees’ personal assortment contains about 13,000 works, together with some by artists resembling Andy Warhol and South Korea’s Park Soo-keun, the particular person accustomed to the appraisal course of stated.

Now the main focus is on the worldwide items because the Korean ones are prohibited from being bought as a result of they’re thought of nationwide treasures. Many may very well be price tens of millions: One other of Monet’s water lilies collection, “Nympheas en fleur,” bought for a record-breaking $84.7 million at Christie’s in New York in 2018.

Analysts have stated the conglomerate’s corporations could enhance dividends to pay for the inheritance tax – and Samsung Electronics Co. did simply that in January. But utilizing the a number of the artwork may assist alleviate the massive sum. If the federal government accepted the items as cost, they might go to native museums that do not have the funds to purchase them themselves, former South Korean tradition ministers and trade teams stated in an announcement final month.

The household can pay in accordance with the legislation, a Samsung Electronics spokeswoman stated, declining to touch upon the artwork property or particular funding plans as a result of they seem to be a private matter. South Korea permits individuals to pay inheritance taxes over the course of 5 years after the association is accredited. Lee’s solely son and Samsung inheritor, Jay Y. Lee – who’s serving an 18-month jail sentence for bribery – has pledged to not create any extra controversy over succession.

It is not the primary time the household finds itself entangled in a scandal, and the artwork assortment was embroiled in a single again in 2008. Lee Kun-hee’s spouse, Hong Ra-hee, who chaired the Leeum museum till 2017, was investigated on a cost of shopping for artworks price tens of tens of millions of {dollars} utilizing Samsung’s slush funds, although particular prosecutors concluded they had been financed by Lee’s private property.

Within the U.Ok., cultural properties price 65 million kilos ($89 million) had been introduced into public possession within the 12 months by way of March 2020 below authorities tax packages, in keeping with a report by the Arts Council England. Jacob Rothschild, scion of one of many world’s largest banking dynasties, was in a position to save 2.eight million kilos from his tax invoice by utilizing artwork items, in keeping with a 1990 article by the Spectator, a political journal.

“It is turning people’ cultural property into public collections,” Chung stated. “What was loved by particular person house owners turns into a collective asset. So it advantages everybody in that sense.”

–With help from Benjamin Stupples, Sohee Kim and Pratish Narayanan.

(Apart from the headline, this story has not been edited by NDTV employees and is revealed from a syndicated feed.)

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