Seoul High Court 2012Nu10132 (Law No. 29, 2012)

It is reasonable to view the appraised value calculated as of the commencement date of inheritance as the market price.

The change in the situation of the land and the decline in the market price of the real estate were made in transactions two years and eight months before the commencement date of the inheritance. Since the sales contract was terminated by agreement, it is not deemed the market price as of the commencement date of the inheritance. Rather, it is reasonable to view the appraised value calculated retroactively by the appraisal corporation as of the commencement date of the inheritance according to the entrustment of market appraisal by the first instance court.

Article 60(1) of the Inheritance Tax and Gift Tax Act

2012Du21109 Revocation of Disposition of Imposing Inheritance Tax

Jeon AA et al.

Head of the tax office;

Seoul High Court Decision 2012Nu10132 Decided August 29, 2012

February 14, 2013

All appeals are dismissed.

The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

Article 60(1) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 926, Jan. 1, 2010; hereinafter “the Act”) provides that the value of the property on which inheritance tax is levied shall be based on the market value as of the date the inheritance commences, and Article 60(2) provides that the market value under paragraph (1) of the same Article refers to the value that is generally recognized as being normal in cases of free transaction between many and unspecified persons. Here, “market value” means, in principle, an objective exchange value formed through a normal transaction, but it includes an value assessed in an objective and reasonable manner. Thus, in cases where there is no exchange value through a transaction, appraisal by a reliable appraisal institution may be deemed as the market value, and even if that value is based on a retroactive appraisal (see, e.g., Supreme Court Decision 2004Du1834, Feb. 1,

The court below acknowledged the facts as stated in its reasoning based on the adopted evidence. Although there was a sales contract between the decedent and DDR, etc. (hereinafter "non-party company") with respect to the land of this case inherited by the plaintiffs, the sale price of which was KRW 000,000 was entered into between the decedent and the non-party company, it was made two years and eight months before the commencement date of inheritance, and there was a change in the situation of the land of this case as well as a decline in the real estate price. Since the sales contract was terminated by agreement due to the circumstances of the non-party company thereafter, it cannot be deemed as the market price as of the commencement date

Rather, according to the entrustment of market value appraisal by the court of first instance, it determined that the appraisal value of the instant land calculated by the EEE appraisal corporation as of the commencement date of inheritance can be deemed as the market value as of the commencement date of inheritance. In light of the above provision and legal principles, and the record, the judgment of the court below is justifiable, and there is no error in the misapprehension of legal principles as to the market value under Article 60(1) and (2) of the Act. Therefore, all appeals are dismissed, and the costs of appeal are assessed against the losing party. It