B. The meaning of Article 45(1) of the Enforcement Decree of the Income Tax Act

B. Article 45(1) of the Enforcement Decree of the Income Tax Act shall not be construed as a provision to the effect that where a taxpayer claims transfer of security, it shall be limited to setting forth the criteria for recognition of transfer, and where a copy of a contract meeting the requirements under each subparagraph of the same paragraph is not attached to the report of confirmation of tax base,

The costs of appeal are assessed against the defendant.

Article 34(2) of the Inheritance Tax Act provides that "where a person having a special relationship transfers any property transferred to a person having a special relationship as prescribed by the Presidential Decree to his spouse, lineal ascendant or descendant within three years from the date of transfer, the original transferor shall be deemed to have directly donated the property at the time of transfer to his spouse, lineal ascendant or descendant, or the lineal ascendant or descendant." The "transfer of the property to a person having a special relationship" does not include the transfer of the property for the purpose of securing debts. Article 45(1) of the Enforcement Decree of the Income Tax Act provides that "where the debtor transfers the property to secure the repayment of debts, it shall not be deemed that the transfer is made if the copy of the contract meeting the following requirements is attached to the final return on tax base." However, this provision does not apply to the case where the person liable for tax payment claims the transfer of the property and a copy of the contract meeting the requirements under each subparagraph of the same paragraph is not attached to the final return on tax base (see Supreme Court Decision 2003Nu138983, May 24, 19839).

As duly determined by the court below, if the Plaintiff’s deceased non-party 1 borrowed gold KRW 14,00,000 from non-party 2 and completed the registration of ownership transfer for the land of this case as security, the above non-party 2 completed the registration of ownership transfer after the above non-party 1 died, and the Plaintiff repaid the principal and interest of the loan and returned the registration of ownership transfer for the land of this case to the Plaintiff before the plaintiff, the above non-party 2’s future registration of ownership transfer is to secure the obligation, and it does not constitute “transfer of property” under Article 34(2) of the above Act, and thus, it cannot be deemed as a donation pursuant to the above provision.

Although the reasoning of the judgment below is somewhat insufficient, the defendant's revocation of the disposition of this case on the ground that the plaintiff cannot impose gift tax on the same purport is justifiable, and there is no error in the misapprehension of legal principles as to inheritance tax law, incomplete deliberation, or omission of judgment, such as the theory of lawsuit, and the argument that the registration of ownership transfer in the future of the above non-party 2 is "transfer of property" as provided by Article 34 (2) of the above Act, which the court below did not determine (whether the above non-party 2 is a specially related person) on the premise that the registration of ownership transfer in the future of the above non-party 2 is "transfer of property" as provided by Article 34 (2) of the above Act

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Yellow-ray (Presiding Justice)