If the title trust is not registered or recorded, the propriety of the deemed donation (negative)

Since title trust cannot be deemed as a trust under the Trust Act, even if the fact of title trust is not registered or recorded under Article 3 of the Trust Act, it cannot be deemed as a donation under Article 32-2 of the former Inheritance Tax Act (amended by Act No. 3474 of Dec. 31, 1981).

Article 32-2 of the former Inheritance Tax Act (amended by Act No. 3474 of Dec. 31, 1981); Articles 1(2) and 3 of the Trust Act

Supreme Court Decision 79Nu396 Decided January 16, 1979, 82Nu9 Decided June 22, 1982, Supreme Court Decision 82Nu121 Decided October 12, 1982

[Judgment of the court below]

Head of Dongmasan Tax Office

Daegu High Court Decision 82Gu202 delivered on March 22, 1983

The judgment below is reversed, and the case is remanded to the Daegu High Court.

The Plaintiff’s attorney’s ground of appeal is examined.

1. According to the reasoning of the lower judgment, the lower court determined that the Defendant’s disposition imposing the gift tax of this case was lawful on the ground that the Nonparty, the representative director of the Non-Party New Metal Co., Ltd., obtained the Plaintiff’s permission on December 10, 1978, was transferred to the Plaintiff under the name of the Plaintiff on the above Non-Party’s shareholder registry, and that there was no fact that it was a trust property, and there was no evidence to deem that the above Non-Party donated the above stocks to the Plaintiff, but such transfer was deemed as a gift by Article 32-2 of the Inheritance Tax Act.

2. However, the constructive gift stipulated in Article 32-2 of the Inheritance Tax Act, which was enforced at the time of the transfer of the above title (amended by Act No. 3474 of Dec. 31, 1981), shall be deemed to have donated the trust property to the trustee in the event that the trust property is not registered or recorded in the securities, or is not recorded in the register of shareholders or the bond register in accordance with Article 3 of the Trust Act with respect to the trust property, or if it is not recorded in the register of shareholders or the bond register in accordance with the provisions of Article 3 of the Trust Act. Thus, the mere nominal trust cannot be deemed to be a trust under the provisions of Article 3 of the Trust Act, even if the fact of the nominal trust is not registered or registered in accordance with the provisions of the above former Inheritance Tax Act (see, e.g., Supreme Court Decisions 78Nu396, Oct. 12, 1982; 82Nu121, respectively).

According to the facts established by the court below, it is difficult to view the transfer of stocks owned by the non-party in the name of the plaintiff on the register of shareholders as a trust under Article 1 (2) of the Trust Act and merely as a trust under Article 1 (2) of the Trust Act. Thus, the court below's decision that the transfer of stocks is deemed as a donation under Article 32-2 of the former Inheritance Act on the premise that the aforementioned transfer of stocks is a trust for the property shall be deemed as a donation under the above Article 32-2 of the former Inheritance Act.

3. Therefore, the lower judgment is reversed, and the case is remanded to the Daegu High Court. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Lee Sung-soo (Presiding Justice)