Whether a deemed donation for a title trust with no purpose of evading gift tax is made (negative)

The legislative intent of Article 32-2(1) of the former Inheritance Tax Act is to prevent the abuse of the title trust system as a means of concealment of gift with respect to the property that requires the transfer or exercise of the right, etc., so if the transferor refuses to transfer the registration to the actual owner or is unable to transfer the registration to the actual owner in the future, or if the transferor becomes a donation due to any circumstance under which it is impossible to transfer the registration to the actual owner in the future or any other similar inevitable circumstance, it shall not be deemed a donation.

Article 32-2(1) of the former Inheritance Tax Act (amended by Act No. 4283 of Dec. 31, 1990)

Supreme Court Decision 90Nu4143 delivered on October 10, 1990 (Gong1990, 2314) 90Nu2291 delivered on October 23, 1990 (Gong190, 2456)

Attorney Kim Jae-chul, Counsel for the defendant-appellant-appellee

Director of the tax office

Seoul High Court Decision 89Gu3085 delivered on June 7, 1990

The appeal is dismissed.

The costs of appeal shall be borne by the defendant.

As to the Grounds of Appeal

If the actual owner and the title holder are different under the provision of Article 32-2(1) of the Inheritance Tax Act, the actual owner shall be deemed to have donated the property to the title holder on the date of transfer of registration. However, since the above provision is intended to prevent the abuse of the title trust system as a means of concealment of gift with respect to the property that requires the transfer or exercise of the right, it shall not be deemed to have been a donation if the transferor refuses to transfer the title to the actual owner or is unable to transfer the registration in the name of the actual owner under the law, or if there is a circumstance that the transferor is unable to transfer the title to the actual owner in the future or any other similar inevitable circumstance, it shall not be deemed to have been a donation (see, e.g., Supreme Court Decisions 90Nu291, Oct. 23, 1990; 90Nu291, Oct. 23, 190).

For this reason, this appeal is dismissed, and it is so decided as per Disposition by the assent of all participating Justices.

Justices Kim Yong-ju (Presiding Justice)