 |
Heirs mulling over donating Lee Kun-hee's art collections
By Baek Byung-yeul
As the due date for paying inheritance tax owed by the late Samsung Group Chairman Lee Kun-hee's bereaved family is approaching, observers are looking at how the heirs will pay one of the world's largest inheritance tax bills estimated at around 13 trillion won ($11.7 billion).
Industry sources said Tuesday that Samsung Group may officially announce a payment plan for the tax, which is due by the end of this month, next week although a company official declined to reveal any details on the matter.
The heirs are Lee's widow Hong Ra-hee, son and Samsung Electronics Vice Chairman Lee Jae-yong, oldest daughter and Hotel Shilla CEO Lee Boo-jin and younger daughter and Samsung Welfare Foundation Chairwoman Lee Seo-hyun.
The late chairman passed away in October, 2020, aged 78, leaving behind 19 trillion won in stocks, and artwork and real estate with an estimated value of around 3 trillion won.
As seen in previous cases such as the LG Group owner family after Chairman Koo Bon-moo's death and the family of the late Hanjin Group Chairman Cho Yang-ho, the Samsung Group heirs are expected to opt to pay the tax over a five-year period after first paying a one-sixth installment of around 2 trillion won.
The inheritance tax on the stocks is calculated based on the average price of the shares over a period of four months ― two months prior to death and two months after.
But attention is being drawn to how the late chairman's enormous art collection will be dealt with. According to media reports, the heirs decided to donate some of the art to local museums. Samsung Group refused to confirm this, saying "the bereaved family will deal with the inheritance issue."
The late Samsung chief was known to be an avid art collector and a supporter of artists such as celebrated video artist Paik Nam-june. He had collected around 13,000 pieces, ranging from ancient Korean to contemporary art.
The late chairman's love for art was inherited from his father and Samsung Group founder Lee Byung-chull, who collected antique works. He inherited his father's collection and became Korea's biggest individual collector of rare artefacts including 20 National Treasures and works by Pablo Picasso and Andy Warhol.
In regard to dealing with the collection, local art experts have expressed concern that some pieces may be sold to raise the necessary money to pay the massive inheritance tax.
Given the country doesn't allow heirs to pay inheritance taxes with works of art, the experts have called on the government to revise the current Tax Law so that the late chairman's valuable art collection can be kept together in the country. In response to this, ruling Democratic Party of Korea Rep. Lee Kwang-jae proposed a bill to revise the law last November.
However, a local art scene official said the heirs won't be able to pay the tax with works of art as the relevant revision has yet to be enacted.
"The bill to revise the Tax Law is still waiting for a vote in the National Assembly. Given the due tax date in April, the late chairman's scions won't be able to pay the inheritance tax with artwork," Chung Joon-mo, president of the Korea Art Authentication and Appraisal Research Center and former curatorial director at the National Museum of Modern and Contemporary Art, said.
In the early 2010s, Chung was the first person to raise the need to revise the Tax Law to allow people to pay inheritance tax with works of art. Since then scholars, artists and officials on the local art scene have agreed that the current law needs to be amended to allow people to do this so that the country can officially preserve the legacy of artists who have passed away rather than seeing their works auctioned off.
