Cho High-2017-Seoul Government-2598 (Law No. 2017.07.20)

Receipt of part of the heir's proprietary property in lieu of waiver of the share of inheritance cannot be deemed as donation.

In case where one of the co-inheritors receives the whole amount of rent revenue, which is the inherent property of each co-inheritors, deposited in the account in the name of the decedent instead of giving up his/her share of inheritance, it cannot be viewed as a gratuitous transfer of property, and thus does not constitute donation.

Article 2 (Gift Tax Taxables) of Inheritance Tax and Gift Tax Act

2017Guhap5997 Revocation of Disposition of Imposition of Gift Tax

○ Kim

○ Head of tax office

April 13, 2018

May 4, 2018

1. Each disposition imposing gift tax of KRW 000 (including additional tax of KRW 000), and KRW 000 (including additional tax of KRW 000) that the Defendant rendered to the Plaintiff on April 11, 2017, shall be revoked.

2. The costs of the lawsuit are assessed against the defendant.

Cheong-gu Office

The same shall apply to the order.

1. Details of the disposition;

A. Kim XX (hereinafter referred to as “the net”) died on November 8, 2015, and his heir has KimY, the Plaintiff, and the Kim Z (hereinafter referred to as “Y, the Plaintiff, and the Kim Z”).

B. In the account of ○○ Securities (hereinafter “instant account”) in the name of the deceased, there was a balance of KRW A with securities and deposits. Of them, KRW B was inherited property, and C was owned by the heir.1)

C. On March 21, 2016, the successors changed the name of the instant account to the Plaintiff. The Defendant, through such change of title, deemed that KimY made the Plaintiff a donation of the Egypt owned by KimY, and Kim Z, to the KRW 000 (including additional tax KRW 000), and KRW 00 (including additional tax) of the gift tax attributed to March 201, 2016 (hereinafter referred to as the “instant disposition”).

[Reasons for Recognition] Unsatisfy, Gap evidence 5, Eul evidence 1, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. Summary of the plaintiff's assertion

After the death of the deceased, the inheritor agreed to bear the costs related to inheritance (the inheritance tax, registration tax, and other public charges) in consideration of the fact that the deceased’s real estate, KimY’s claim for the return of deposit and deposit claims, and the Plaintiff’s claim for the return of deposit and deposit claims, and that KimY agreed to bear the costs related to inheritance. Since the Plaintiff received the instant amount from KimY and Kim Z in lieu of giving up the share of inheritance on real estate, lease deposit claims, and deposit claims, the Plaintiff could not be deemed to have received the transfer of property free of charge.

B. Facts of recognition

1) The value of the deceased’s inherited property is the sum of F won as follows:

○ Real Estate Gwon (○○○○○○○○○○-dong 000 square meters, 000 square meters, 000 square meters, 000 square meters, 000 square meters, 000 square meters, 000 square meters, 000 square meters, and 000 square meters, 000 square meters, 000 square meters, 000 square meters, 000 square meters, 000, 000, 000 (hereinafter referred to as “the instant real property”).

○ Securities and Deposit Hwon (Inheritance of the balance of this case’s account)

○ Claim for Return of Deposit for Lease ( Claim for Return of Deposit for Lease of Apartment ○○○-dong Apartment with the deceased’s residence)

○ Kwon, such as deposit claims

2) The deceased’s debt is a Lone with respect to a multi-household house.

3) On December 2015, successors prepared a “Agreement on Division of Property, which the KimY shall solely inherit the instant real estate,” and completed the registration of ownership transfer in the KimY future on January 12, 2016 on the instant real estate due to the “Succession by Agreement Division.” The successors changed the name of the instant account to the Plaintiff on March 21, 2016, and changed the account, etc. of the deceased’s account in the name of Kim Zz. around that time.

4) The inheritors filed inheritance tax return on the inherited property as well as the amount of tax payable on the basis of the inherited property, such as (i) and (ii) on May 31, 2016.

[Reasons for Recognition] Facts without dispute, Gap 3, 4 evidence, Eul 2 and 4 evidence, the purport of the whole pleadings

C. Determination

In full view of the following facts and circumstances, which can be recognized by comprehensively taking account of the aforementioned facts and the purport of the entire pleadings, it is difficult to view that KimY, and KimZ transferred the key amount of this case to the Plaintiff “free of charge”. Rather, it is reasonable to view that the Plaintiff received the key amount of this case from KimY, and Kim Z as the “price giving up its equity interest in the real estate, lease deposit claims, deposit claims, deposit claims, etc., which are inherited property.”

1) According to the agreement of the heir, “property acquired by KimY” is about Nwon, and the property acquired by KimY is about KRW : G estimated value of the instant real estate - obligation to return the lease deposit - inheritance Mwon, etc.). The property acquired by Kim Z is Pwon (=Jwon + deposit claims, etc.). On the other hand, the property acquired by the Plaintiff is considerably lower than that of the deceased’s property owned by B, KimY, and Kim ZZ out of the balance of the instant account.

Considering that the Plaintiff received the portion owned by KimY and Kim Z from the balance of the account in this case, KimY was considered as receiving the portion of QY from sources (Mwon - Dwon), Kim Z (Pwon - Ewon), and the Plaintiff received the Swon (Nwon + Dwon + E won), and the difference in the value of the property that the heir received between the heirs is reduced (Although the amount the heir acquired is the largest, the heir was the birth of the deceased, and there was a significant change in the value of the property that the heir received from the heir. As the south of Korea, the heir was considered as the birth of the deceased, the past and future role toward the deceased and the house of Kim Y, and the cost of acquiring real estate (Article 3-2)).

2) If inherited property is divided by the method as alleged by the Plaintiff, it may not be registered by dividing the instant real property according to the inherited shares, or the process of dividing lease deposit claims, deposit deposit claims, deposit claims, etc. may be conducted separately. Therefore, there seems to be a sufficient reason for the co-inheritors to reach an agreement as alleged by the Plaintiff.

3) The registration of the instant real estate or the change of the name of the instant account was made as agreed upon, as alleged by the Plaintiff.

4) The title change in the instant account was made after the inheritance was commenced and before the inheritance was reported. In other words, the transfer of property was made at the time near the inheritance.

3. Conclusion

The claim of this case is justified, and it is so decided as per Disposition.

1) There is no dispute between the Plaintiff and the Defendant on this issue. At the same time, the inheritor added the instant issues to the inherited property, and reported by deducting them from the inheritor’s debts (Evidence 2), and the head of ○○ Tax Office excluded the instant issues from the inherited property by deeming them as the inheritor’s proprietary property (Evidence 4).