[Supreme Court Decision 2007Du21914 (O1, 2008)]

The costs of appeal are assessed against the Plaintiff.

[Seoul High Court Decision 2007Nu2199 ( September 18, 2007)]

2. The costs of lawsuit shall be borne by the Plaintiff.

A. On July 29, 2005, the Plaintiff: (a) was divided into the Defendant on June 24, 1996 into ○○○○○-dong, ○○-dong, ○○○-dong, ○○-dong, ○○-dong, 1,000 square meters; (b) 881 square meters in the same ○-dong, ○○-dong, ○-dong, ○○-dong, ○-dong, 1,524 square meters; (c) 357 square meters in the same ○-dong, ○-dong, ○-dong, ○-dong, ○-dong, ○○-dong, ○-dong, ○-dong, ○○-dong, ○○-dong, ○○-dong, ○-dong, 1,881 square meters in the same ○-dong on April 29, 2005; and (d) transferred the instant farmland to ○○-dong, 2005.

B. However, on December 1, 2005, the Defendant imposed capital gains tax of KRW 24,381,400 on the Plaintiff on the ground that at the time of the transfer of the instant land, the Plaintiff did not reside in ○○○○○○○, where the instant land was located and was not a person residing in the area adjacent to the ○○○○, where the instant land was located, on the ground that the Plaintiff did not have been subject to capital gains tax reduction

[Reasons for Recognition] Facts without any dispute, Gap 2, Eul 1's each entry, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The plaintiff actually acquired on May 10, 1989 and completed the registration of transfer of ownership on June 24, 1996. From July 16, 1992, the plaintiff was residing in ○○○○○○○, adjacent to the ○○, where the land of this case was located, but is not connected to the present due to the administrative restructuring, and the disposition of this case is unlawful, since it constitutes the reduction of capital gains tax on self-employed farmland under Article 69(1) of the Restriction of Special Taxation Act and Article 66(1) of the Enforcement Decree of the same Act.

(b) Related statutes;

director Restriction of Special Taxation Act (amended by Act No. 7775 of Dec. 29, 2005)

Article 69 (Reduction or Exemption of Transfer Income Tax for Self-Cultivating Farmland)

(1) With respect to the income accruing from a transfer of land prescribed by Presidential Decree, which is directly cultivated by the resident prescribed by Presidential Decree, for not less than eight years [in cases where the relevant land is incorporated into the Korea Agricultural and Rural Infrastructure Corporation established under the Korea Agricultural and Rural Infrastructure Corporation and Farmland Management Corporation Act (hereafter in this Article, referred to as the "Korea Agricultural and Rural Infrastructure Corporation") or into the corporation prescribed by Presidential Decree which mainly runs the agricultural industry (hereafter in this Article, referred to as the "agricultural corporation"), not later than December 31, 2005, not later than five years; in cases where the farmland eligible for subsidies for managerial transfer direct payments prescribed by Presidential Decree is transferred to the Korea Agricultural and Rural Infrastructure Corporation or agricultural corporations not later than December 31, 2010, the tax amount equivalent to 100/100 of the capital gains tax on the income accruing from a transfer of land prescribed by Presidential Decree, from among the land subjected to taxation of agricultural income tax (including those subject to non-taxation, reduction and exemption and small collection), or has been subjected to a disposition of replotting for replotting pursuant to the National Land Planning and Utilization Act, limited to only ten percent.

(1) Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 19329 of Feb. 9, 2006)

Article 66 (Reduction or Exemption of Transfer Income Tax for Self-Cultivating Farmland)

(1) For the purpose of the main sentence of Article 69 (1) of the Act, the term “resident prescribed by the Presidential Decree who resides in the seat of the farmland” means a person who has cultivated while living in the area (including the area corresponding to the relevant area at the time of commencement of cultivation, but not corresponding to it due to a reorganization of administrative district) falling under any of the following subparagraphs for not less than 8 years (in case of transfer to the Korea Agricultural and Rural Infrastructure Corporation under the Korea Agricultural and Rural Infrastructure Corporation and Farmland Management Fund Act (hereafter in this Article, referred to as the “Korea Agricultural and Rural Infrastructure Corporation”) or to the corporation under paragraph (2), 5 years, and in case of transfer

1. An area within a Si/Gun/Gu (referring to an autonomous Gu; hereafter the same shall apply in this paragraph) where farmland is located;

2. An area within a Si/Gun/Gu adjacent to an area referred to in subparagraph 1.

m. Act on the Establishment of nine autonomous Gus in Gwangjin-gu, Seoul Special Metropolitan City, Metropolitan Cities, and Do Jurisdiction (amended by Act No. 4802, Dec. 22, 1994)

Article 4 (Change of Name of ○ Metropolitan City, and Establishment of ○○-gu and ○○-gu)

(2) ○ Metropolitan City shall have the following ○-gu and ○-gu respectively:

Name of the Gu

Jurisdiction

○○-gu

Of the ○-gu, ○○ Dong, ○○ Dong, ○ Dong, ○○ Dong, and ○○ Dong.

(c) Fact of recognition;

The following facts may be acknowledged in full view of the purport of the whole pleadings in Gap evidence No. 1.

(1) On June 24, 1996, the Plaintiff completed the registration of ownership transfer for the land of this case on the ground of sale dated April 26, 1996.

(2) Accordingly, on May 13, 2005, the Plaintiff transferred ○○ land among the instant land to ○○○, and ○○ land to ○○○○, respectively.

(3) Meanwhile, the instant land is located in ○○○○○○○○, and the Plaintiff was residing in ○○○○○, located in ○○○○, bordering with ○○○○○, from July 24, 1992 to December 22, 1994. However, pursuant to Article 4(2) of the Gwangjin-gu Seoul Special Metropolitan City Act on the Establishment of 9 Autonomous Gus and the Act on the Change of Jurisdiction between Special Metropolitan Cities, Metropolitan Cities, and Dos, which was enacted by Act No. 4802 on December 22, 1994, the Plaintiff’s resident in ○○○○○ (the Plaintiff resided in ○○○○○○○, ○○○○, ○○1 apartment, 000, and 000 households), which is located in ○○○○○, and the Plaintiff does not have a boundary with ○○○.

D. Determination

(1) In order to fall under the reduction or exemption of capital gains tax on self-arable farmland under Article 69 of the Restriction of Special Taxation Act, the person residing in the location of the farmland [Article 66(1) of the Enforcement Decree of the same Act (Article 66 of the Enforcement Decree of the same Act) located in the Si/Gun/Gu where farmland is located or the area adjacent to the area where farmland is located] shall be one of the own farmland for not less than eight years, and first,

(2) The plaintiff asserts that he acquired the land of this case on May 10, 1989. Thus, if the registration of ownership transfer is completed with respect to real estate, the nominal owner of the registration shall be presumed to have acquired the ownership by the "legal cause for registration". Therefore, in order to reverse such presumption, the plaintiff must prove that he completed the registration of ownership transfer with respect to the land of this case on the ground of sale dated April 26, 1996. As seen earlier, it is presumed that the plaintiff acquired the ownership as the cause for registration. Meanwhile, according to the evidence Nos. 4-1, 2, and 3, it is presumed that ○○ entered into a sales contract for the land of this case (previous ○, ○○) between ○○ and ○○ on April 18, 1989. However, since it is not the plaintiff but the above presumption is stated as ○○○ on the ground of sale.

Ultimately, the plaintiff acquired the land of this case by sale on April 25, 1996, and the ○○○○ was divided into ○○○○○○ on March 1, 1995, and at the time of the plaintiff's acquisition of the land of this case, the ○○○○ and the ○○○○ which had already been residing in the plaintiff does not correspond to the adjacent area. Thus, the plaintiff cannot be deemed to have resided in the location of the land (On the other hand, the plaintiff asserted that the ○○○ and the ○○○○○ are adjacent to the sea, but the scope of the location of the land of this case is based on the "Gu which is an autonomous Gu," and it cannot be deemed that the ○○○○○ is included in the ○○○○○○ at the time of acquisition

(3) Therefore, the Plaintiff’s assertion cannot be deemed as falling under the reduction or exemption of capital gains tax on self-arable land, and the Plaintiff’s assertion is without merit.

3. Conclusion

Therefore, the disposition of this case is legitimate, and the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.

[Attachmentcheon District Court 2006Gudan1446, Dec. 28, 2006]

2. The costs of lawsuit shall be borne by the Plaintiff.

A. On July 29, 2005, the Plaintiff: (a) was divided into the Defendant on June 24, 1996 into ○○○○○-dong, ○○-dong, ○○○-dong, ○○-dong, ○○-dong, 1,000 square meters; (b) 881 square meters in the same ○-dong, ○○-dong, ○-dong, ○○-dong, ○-dong, 1,524 square meters; (c) 357 square meters in the same ○-dong, ○-dong, ○-dong, ○-dong, ○-dong, ○○-dong, ○-dong, ○-dong, ○○-dong, ○○-dong, ○○-dong, ○-dong, 1,881 square meters in the same ○-dong on April 29, 2005; and (d) transferred the instant farmland to ○○-dong, 2005.

B. However, on December 1, 2005, the Defendant imposed capital gains tax of KRW 24,381,400 on the Plaintiff on the ground that at the time of the transfer of the instant land, the Plaintiff did not reside in ○○○○○○○, where the instant land was located and was not a person residing in the area adjacent to the ○○○○, where the instant land was located, on the ground that the Plaintiff did not have been subject to capital gains tax reduction

[Reasons for Recognition] Facts without any dispute, Gap 2, Eul 1's each entry, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The plaintiff actually acquired on May 10, 1989 and completed the registration of transfer of ownership on June 24, 1996. From July 16, 1992, the plaintiff was residing in ○○○○○○○, adjacent to the ○○, where the land of this case was located, but is not connected to the present due to the administrative restructuring, and the disposition of this case is unlawful, since it constitutes the reduction of capital gains tax on self-employed farmland under Article 69(1) of the Restriction of Special Taxation Act and Article 66(1) of the Enforcement Decree of the same Act.

(b) Related statutes;

director Restriction of Special Taxation Act (amended by Act No. 7775 of Dec. 29, 2005)

Article 69 (Reduction or Exemption of Transfer Income Tax for Self-Cultivating Farmland)

(1) With respect to the income accruing from a transfer of land prescribed by Presidential Decree, which is directly cultivated by the resident prescribed by Presidential Decree, for not less than eight years [in case where the relevant land is incorporated into the Korea Agricultural and Rural Infrastructure Corporation established under the Korea Agricultural and Rural Infrastructure Corporation and Farmland Management Corporation Act (hereafter in this Article, referred to as the "Korea Agricultural and Rural Infrastructure Corporation") or into the corporation prescribed by Presidential Decree which mainly runs the agriculture (hereafter in this Article, referred to as the "agricultural corporation"), not later than December 31, 2005, not later than five years; and in case where the farmland eligible for subsidies for managerial transfer direct payments prescribed by Presidential Decree is transferred to the Korea Agricultural and Rural Infrastructure Corporation or an agricultural corporation not later than three years, not later than December 31, 2010] and is prescribed by Presidential Decree, the tax amount equivalent to 10/100 of the capital gains tax shall be reduced or exempted: Provided, That in case where the relevant land is incorporated into the residential area, commercial area and industrial area (hereafter in this Article, referred to as the "residential area, etc.") under the National Land Planning and Utilization Act, or subjected to the designation of replotting not later than ten days.

(1) Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 19329 of Feb. 9, 2006)

Article 66 (Reduction or Exemption of Transfer Income Tax for Self-Cultivating Farmland)

(1) For the purpose of the main sentence of Article 69 (1) of the Act, the term “resident prescribed by the Presidential Decree who resides in the seat of the farmland” means a person who has cultivated while living in the area (including the area corresponding to the relevant area at the time of commencement of cultivation, but not corresponding to it due to a reorganization of administrative district) falling under any of the following subparagraphs for not less than 8 years (in case of transfer to the Korea Agricultural and Rural Infrastructure Corporation under the Korea Agricultural and Rural Infrastructure Corporation and Farmland Management Fund Act (hereafter in this Article, referred to as the “Korea Agricultural and Rural Infrastructure Corporation”) or to the corporation under paragraph (2), 5 years, and in case of transfer

1. An area within a Si/Gun/Gu (referring to an autonomous Gu; hereafter the same shall apply in this paragraph) where farmland is located;

2. An area within a Si/Gun/Gu adjacent to an area referred to in subparagraph 1.

m. Act on the Establishment of nine autonomous Gus in Gwangjin-gu, Seoul Special Metropolitan City, Metropolitan Cities, and Do Jurisdiction (amended by Act No. 4802, Dec. 22, 1994)

Article 4 (Change of Name of ○ Metropolitan City, and Establishment of ○○-gu and ○○-gu)

(2) ○ Metropolitan City shall have the following ○-gu and ○-gu respectively:

Name of the Gu

Jurisdiction

○○-gu

Of the ○-gu, ○○ Dong, ○○ Dong, ○ Dong, ○○ Dong, and ○○ Dong.

(c) Fact of recognition;

The following facts may be acknowledged in full view of the purport of the whole pleadings in Gap evidence No. 1.

(1) On June 24, 1996, the Plaintiff completed the registration of ownership transfer for the land of this case on the ground of sale dated April 26, 1996.

(2) Accordingly, on May 13, 2005, the Plaintiff transferred ○○ land among the instant land to ○○○, and ○○ land to ○○○○, respectively.

(3) Meanwhile, the instant land is located in ○○○○○○○○, and the Plaintiff was residing in ○○○○○, located in ○○○○, bordering with ○○○○○, from July 24, 1992 to December 22, 1994. However, pursuant to Article 4(2) of the Gwangjin-gu Seoul Special Metropolitan City Act on the Establishment of 9 Autonomous Gus and the Act on the Change of Jurisdiction between Special Metropolitan Cities, Metropolitan Cities, and Dos, which was enacted by Act No. 4802 on December 22, 1994, the Plaintiff’s resident in ○○○○○ (the Plaintiff resided in ○○○○○○○, ○○○○, ○○1 apartment, 000, and 000 households), which is located in ○○○○○, and the Plaintiff does not have a boundary with ○○○.

D. Determination

(1) In order to fall under the reduction or exemption of capital gains tax on self-arable farmland under Article 69 of the Restriction of Special Taxation Act, the person residing in the location of the farmland [Article 66(1) of the Enforcement Decree of the same Act (Article 66 of the Enforcement Decree of the same Act) located in the Si/Gun/Gu where farmland is located or the area adjacent to the area where farmland is located] shall be one of the own farmland for not less than eight years, and first,

(2) The plaintiff asserts that he acquired the land of this case on May 10, 1989. Thus, if the registration of ownership transfer is completed with respect to real estate, the nominal owner of the registration shall be presumed to have acquired the ownership by the "legal cause for registration". Therefore, in order to reverse such presumption, the plaintiff must prove that he completed the registration of ownership transfer with respect to the land of this case on the ground of sale dated April 26, 1996. As seen earlier, it is presumed that the plaintiff acquired the ownership as the cause for registration. Meanwhile, according to the evidence Nos. 4-1, 2, and 3, it is presumed that ○○ entered into a sales contract for the land of this case (previous ○, ○○) between ○○ and ○○ on April 18, 1989. However, since it is not the plaintiff but the above presumption is stated as ○○○ on the ground of sale.

Ultimately, the plaintiff acquired the land of this case by sale on April 25, 1996, and the ○○○○ was divided into ○○○○○○ on March 1, 1995, and at the time of the plaintiff's acquisition of the land of this case, the ○○○○ and the ○○○○ which had already been residing in the plaintiff does not correspond to the adjacent area. Thus, the plaintiff cannot be deemed to have resided in the location of the land (On the other hand, the plaintiff asserted that the ○○○ and the ○○○○○ are adjacent to the sea, but the scope of the location of the land of this case is based on the "Gu which is an autonomous Gu," and it cannot be deemed that the ○○○○○ is included in the ○○○○○○ at the time of acquisition

(3) Therefore, the Plaintiff’s assertion cannot be deemed as falling under the reduction or exemption of capital gains tax on self-arable land, and the Plaintiff’s assertion is without merit.

3. Conclusion

Therefore, the disposition of this case is legitimate, and the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.