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Tuesday, April 20, 2021

How Samsung Founder’s Family Could Pay Some of the World’s Biggest Tax Bills

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Jay Y Lee (center) arrives at Seoul High Court on January 18

When Lee Kun-hee assembled one of the largest private art collections in the world, little did he know that she would be embroiled in his family’s tax woes.

The treasury includes a portrait of Dora Maar by Pablo Picasso, one of Claude Monet’s water lily paintings, and thousands of other works which together are worth between 2.5 trillion won and 3 trillion won (2.2 billion and $ 2.7 billion), according to a person familiar with the assessment process who asked not to be named because she is not authorized to speak to the media.

He could prove to be a key asset in paying one of the biggest inheritance tax bills in the world. The Samsung dynasty has until the end of the month to unveil how the family plans to finance the levy of at least 11 trillion won due after Lee’s death in October. Although South Korean law does not currently allow the use of art for such payments, some cultural organizations want the government to consider changing it to ensure that the treasures remain in the country.

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“The idea of ​​paying inheritance tax with art did not receive much support as it was seen as something that would only benefit the wealthy,” said Chung Joon-mo, who co-leads Korea Art. Authentication and Appraisal Research Center and was the chief curator of the National Museum of Modern and Contemporary Art of Korea. “But now there is a growing feeling that it would be in the national interest to keep these world-class works of art in the country.”

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Over three decades, Lee’s father and founder of the Samsung Group, Lee Byung-chull, had built a formidable stack of mostly ancient Korean artwork, almost all of which was donated in the 1980s. to create Hoam – the museum named after his pseudonym. His son and daughter-in-law then expanded the family’s collection, acquiring pieces from international artists.

Unlike his father, young Lee was known for his follies when he saw an artwork worth buying, according to Lee Jong-seon, who wrote “Lee Collection” and helped build the art store. (he has no connection with the billionaire family). In 2004, the clan founded Samsung’s Leeum Museum, which houses pieces such as “Untitled (Black Figure)” by Jean-Michel Basquiat and “Two Candles” by Gerhard Richter.

Lees’ private collection includes around 13,000 works, including some by artists such as South Korea’s Andy Warhol and Park Soo-keun, the person familiar with the appraisal process said.

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Now the focus is on international coins because Korean coins are not sold because they are considered national treasures. Many could be worth millions: Another series of Monet’s water lilies, “Nympheas in Bloom,” sold for a record $ 84.7 million at Christie’s in New York in 2018.

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Analysts said companies in the conglomerate could raise dividends to pay inheritance taxes – and Samsung Electronics Co. did so in January. Still, the use of some of the art could help lighten the large sum. If the government accepted the coins as payment, they could visit local museums that lack the funds to purchase them themselves, former South Korean culture ministers and industry groups said. in a statement last month.

The family will pay according to the law, a Samsung Electronics spokeswoman said, declining to comment on artistic assets or specific funding plans because they are a personal matter. South Korea allows people to pay inheritance tax within five years of approval of the arrangement. Lee’s only son and Samsung heir, Jay Y. Lee – who is serving an 18-month prison sentence for corruption – has pledged to no longer create controversy over the estate.

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This is not the first time the family has found themselves embroiled in a scandal, and the art collection was embroiled in 2008. Lee Kun-hee’s wife, Hong Ra-hee, who chaired the museum Leeum until 2017, was investigated. to purchase works of art worth tens of millions of dollars using Samsung’s slush funds, although special prosecutors have concluded that they were funded by Lee’s personal assets.

In the UK, cultural property worth £ 65million ($ 89million) became Public Property of the Year through March 2020 under government tax programs, according to a report by the ‘Arts Council England. Jacob Rothschild, a descendant of one of the world’s largest banking dynasties, was able to save £ 2.8 million on his tax bill by using works of art, according to a 1990 article in The Spectator, a political magazine.

“It turns people’s cultural property into public collections,” Chung said. “What the individual owners enjoyed becomes a collective good. So it benefits everyone in that sense.

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

(Except for the title, this story was not edited by UK Time News staff and is posted Platforms.)

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