Whether the representative director of a corporation may be deemed to have been donated by applying Article 32-2 of the former Inheritance Tax Act (amended by Act No. 3474 of Dec. 31, 1990) where he/she has entrusted his/her title to relatives in order to avoid the limitation on stock ownership by purchasing the shares of the corporation (negative)

If the representative director of a corporation merges with the shares of the corporation at the time of the purchase of the shares of the corporation at issue, it exceeds the share holding limit under Article 200 of the Securities and Exchange Act, and if he/she entrusts the title of ownership to his/her relatives including the plaintiff in order to avoid such limit, it shall not be deemed a donation by applying Article 32-2 of the former Inheritance Tax Act (amended by Act No. 3474 of Dec. 31, 190) to the extent that it is obvious that it

Article 32-2 of the former Inheritance Tax Act (amended by Act No. 2474 of Dec. 31, 1990)

[Plaintiff, Appellant] Plaintiff 1 and 1 other (Law Firm Domin, Attorneys Park Jae-soo and 1 other, Counsel for plaintiff-appellant) and 1 other (Law Firm 1, 1991, Counsel for plaintiff-appellant)

[Judgment of the court below]

Head of the tax office

Seoul High Court Decision 90Gu5605 delivered on December 21, 1990

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

We examine the grounds of appeal.

Article 32-2(1) of the former Inheritance Tax Act (amended by Act No. 3474 of Dec. 31, 1990; hereinafter the same applies) provides that if the actual owner and the registrant are different, the provision that the actual owner donates the property to the titleholder on the date of transfer of registration shall be deemed to be the donation of the property to the registrant. Since the legislative intent of the provision lies in preventing any abuse of the title trust system as a means to conceal the donation of the property that requires the transfer of the right or the exercise of the right, the transfer of the right is not intended to avoid the gift by concealing the title of the registration, etc., but rather, if the transferor refuses the transfer of the registration to the actual owner or is unable to transfer the registration, etc. to the future due to any other unavoidable cause or event similar thereto, it shall not be deemed the donation (see Supreme Court Decision 90Nu424, Oct. 10, 190; 90Nu4143, Oct. 13, 1990; 199Nu3231930.

According to the reasoning of the judgment of the court below in this case, the non-party, the representative director of Taeok Co., Ltd., based on its evidence in this case, purchased the shares of the above non-party company in question and combined them with those of the above non-party company in this case, and recognized that he entrusted the name of ownership to his relatives including the plaintiff in order to avoid such restriction, and unilaterally used the plaintiff's name without the plaintiff's consent in this title trust, and this title trust cannot be viewed as a donation by applying Article 32-2 (1) of the former Inheritance Tax Act, since this title trust was made without communication between the title truster and the title trustee, and even if there was communication between the parties in this title trust, it cannot be seen as a donation by applying the above provisions of the former Inheritance Tax Act, since it is obvious that the purpose of tax avoidance was not achieved, and it cannot be seen as a donation by applying the above provisions of the court below's decision that there was no error in the law of evidence violation of the rules of evidence concerning evidence verification and fact-finding.

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 Song Man-man (Presiding Justice)