Samsung heirs donate massive art trove to help clear inheritance tax bill

They will also give hundreds of millions of dollars to medical projects and research in an apparent attempt to improve their public image as they proceed with a multi-year plan to inherit both the wealth and corporate power of South Korea’s richest-ever businessman.

The Lee family, including his widow and three children, expects to pay more than 12 trillion won (£7.77 billion) in inheritance taxes, which is more than half the wealth Lee held in stocks and real estate, Samsung said.

This would be the largest amount in South Korea and more than three times the country’s total estate tax revenue for last year.

Giving away the late chairman’s vast collection of art masterpieces would reduce the taxable portions of his estate.

The family plans to divide the payment in six instalments over five years, while making the first payment this month.

“It is our civic duty and responsibility to pay all taxes,” the Lee family said in a statement.

They had until Friday to report the extent of the inheritance and payment plans to tax authorities.

Raising cash for the tax payment is crucial for the Lee family to extend its control over Samsung’s business empire, which extends from semiconductors, smartphones and TVs to construction, shipbuilding and insurance.

Some analysts say the process could result in a shakeup across the group.

The late Mr Lee owned 4.18% of Samsung Electronics, which is one of the world’s biggest makers of computer memory chips and smartphones, but also held stakes in Samsung affiliates that collectively owned a larger share than his in the crown jewel electronics company.

The complex shareholding structure has allowed Mr Lee and his family to exert broad control over the group.

In Wednesday’s statement, Samsung did not mention how Mr Lee’s widow and children would split his assets, and there is speculation they have not reached a final agreement.

Most market analysts believe Mr Lee’s shares will be distributed in a way that would strengthen the leadership of his only son and corporate heir, Lee Jae-yong, the de facto chief of Samsung Electronics who is currently imprisoned for bribery and other crimes.

Mr Lee’s other children are Lee Boo-jin, CEO of Samsung’s Shilla luxury hotel chain, and Lee Seo-hyun, who heads the Samsung Welfare Foundation.

The family plans to donate 23,000 art pieces from Mr Lee’s personal collection to two state-run museums.

They include old Korean paintings, books and other cultural assets designated as national treasures, and modern Korean painters such as Park Soo-keun and Lee Jung-seop.

There are also the works of Marc Chagall, Pablo Picasso, Paul Gauguin, Claude Monet, Joan Miro and Salvador Dali, Samsung said.

The National Museum of Modern and Contemporary Art said the 1,488 pieces it received from the Lee family was its biggest private donation.

The works included Lee Jung-seop’s “Bull”, Dali’s “Family of Marsupial Centaurs”, Monet’s “Water Lily Pond (Le Bassin Aux Nympheas)”, and Chagall’s “Red Bouquet With Lovers (Les Amoureux Aux Bouquets Rouges)”.

The National Museum of Korea will receive around 21,000 pieces from Mr Lee’s collection of Korean traditional art, including paintings, ceramics and sculptures.

Hwang Hee, South Korea’s culture minister, said some of the art donated by Mr Lee will be displayed for the public starting in June.

He expressed “deep gratitude” to the Lee family for “enriching” the country’s cultural assets, but he sidestepped questions on whether he thought Samsung was trying to create a positive atmosphere for Lee Jae-yong to get pardoned.

The Lee family will also donate one trillion won (£647 million) to help fund infectious disease research and treatment for children with cancer and rare illnesses.

About half of that money will be used to help finance the establishment of a 150-bed hospital providing specialised treatment for infectious diseases.

Experts had raised the need for such facilities equipped with negative pressure rooms and other advanced systems following the emergence of Covid-19.

About 300 billion won (£192 million) of the funds will go into a decade-long programme with the Seoul National University Children’s Hospital to help families pay for the treatment of children with cancer and rare diseases and support clinical trials and drug development.

“Members of the (Lee family) hope to honour the life of the late Chairman Lee and his commitment to corporate citizenship and co-prosperity by giving back to communities,” Samsung said.