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The heirs of Samsung Electronics head Lee Kun-hee, who died last October, have announced plans to settle what Bloomberg called “one of the largest inheritance-tax bills in history”. His family said it would transfer $11bn of funds and donate 23,000 works of art to the South Korean state, including masterpieces by Dali, Monet and Picasso. It will also donate hundreds of millions of dollars to the fights against infectious diseases and child cancer.
At 50%, plus 20% when passing down shares owned by the largest shareholder in a company, South Korea’s inheritance tax is among the highest in the world: the average levy in OECD countries is 15%. Lee’s case alone has netted the government three to four times the total estate-tax revenue raised last year.
This is only the latest twist in the family soap opera at Samsung, which started out trading dried fish and vegetables in the 1930s, and is now one of the world’s leading producers of computer chips and smartphones. The jailing for bribery in January of Lee Jae-yong, the late chairman’s son, has clouded the family’s public image. It has also complicated decisions about how to divide his shareholdings and could disrupt the company’s long-term investments and strategic planning.
The FT suggests that some may view the donations as “a ploy” to improve the family’s image, and observes: “The wealth and power of South Korea’s chaebol families remain divisive on the streets of Seoul.”