It is reasonable to view that the time of donation of insurance money is when the termination refund is received due to early termination or the insurance money is received due to the arrival of maturity.

It is reasonable to see that the donation period for a contractor, the insured, or a person designated as the recipient of the insurance money in the insurance in the insurance is when the cancellation refund is received or the insurance money is received due to the expiration date. It is difficult to see that the donation was made at the time of subscription on the sole ground that the contractor, the insured, or the recipient of the insurance money has been designated for the insurance which has not yet

Article 34 of the Inheritance Tax and Gift Tax Act

2014Guhap1957 Revocation of Disposition of Imposition of Gift Tax

United Kingdom A

BB Director of the Tax Office

January 8, 2015

January 29, 2015

1. The Defendant’s imposition of KRW 376,92,00 (including additional tax of KRW 136,92,00) on the Plaintiff on July 18, 2013, each disposition of KRW 45,807,00 (including additional tax of KRW 18,080) on the gift tax of KRW 107,685,950 (including additional tax of KRW 10,132,858) on the Plaintiff for the year 2009, shall be revoked.

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

The same shall apply to the order.

1. Details of the disposition;

A. On November 23, 2009, at the ○○ Bank ○○○○ Bank’s terms and conditions as follows, an insurance contract (hereinafter referred to as the “instant insurance contract”) was concluded in the name of the Plaintiff, which subscribed to the Life Insurance Co., Ltd. △△ Savings Insurance II (hereinafter referred to as “instant insurance”). The Plaintiff’s husband’s ParkCC terminated the term deposit under the name of the Plaintiff and paid KRW 1 billion insurance premium under the instant insurance contract (hereinafter referred to as “the instant insurance contract”).

B. From March 2012, 201, △△ Regional Tax Office conducted an investigation into the source of funds for the instant insurance premium from around March 13, 201, confirmed the aforementioned facts, and notified the Defendant of the imposition of KRW 1 billion of the instant insurance premium as the Plaintiff’s donated property on May 13, 2013. Accordingly, on July 18, 2013, the Defendant imposed a gift tax of KRW 376,92,00 (including additional tax of KRW 136,92,00 (including additional tax of KRW 136,92,00), gift tax of KRW 45,807,00 (including additional tax of KRW 18,00,000), gift tax of KRW 107,685,90 (including additional tax of KRW 10,00), and penalty tax of KRW 1085,90 (including additional tax of KRW 108,00) for the year 2012.

C. Accordingly, the Plaintiff filed an appeal with the Tax Tribunal on October 15, 2013, but the Tax Tribunal dismissed the Plaintiff’s appeal on March 13, 2014.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1, 2, 5, 11, 12, 13 (including branch numbers, if any; hereinafter the same shall apply), Eul evidence Nos. 1 and 2, witness witness testimony, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) In the process of remitting one’s overseas income to Korea, ParkCC, the spouse of the Plaintiff, deposited income in the name of the Plaintiff in a domestic financial institution and managed it under the name of the borrower. The instant insurance was also managed in the name of the Plaintiff on the continuous line of management of the said property, and the Plaintiff is merely a policyholder and a beneficiary of the insurance money under his name. Therefore, the instant insurance premium deposit does not constitute a donation of cash, deposits, installment savings, etc., and thus, the instant disposition made on a different premise is unlawful.

2) In addition, even if the beneficiary of the insurance contract of this case is the Plaintiff, and it is possible for the Plaintiff to receive the insurance money at the maturity of the insurance contract of this case, the termination right for the insurance of this case, which is a borrowed account, is reserved against ParkCC. The insurance of this case, as a kind of life insurance, shall be deemed to have been made only when the Plaintiff actually receives the insurance money, and it shall not be deemed that the insurance contract of this case was made at the time when the Plaintiff actually receives the insurance money. Therefore, the Defendant’s disposition of this case is unlawful.

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

(c) Fact of recognition;

1) From around 2004, ParkCC operated the business of opening and operating a medical machine agency in India and China, etc. The revenue earned from foreign countries was remitted to the domestic foreign currency account and returned each time it returned to the Republic of Korea, and deposited money deposited in the account of a fixed deposit in the name of the Plaintiff and managed the passbook and seal in his own possession.

2) On May 6, 2009, ParkCC deposited KRW 2 billion in the account under the Plaintiff’s name (Account Number: 00-0000-000-0000) at the ○○ Bank ○○ Bank branch, and deposited KRW 2,012,521,796 on November 20, 2009, after withdrawing KRW 2,012,521,796 on the total amount of the principal and interest on the fixed deposit due at ○○ Bank ○○ Bank 14:10 on the same day, two of the fixed deposit accounts under the Plaintiff’s name (Account Number: 00-00-00-1, 000-000-00-2) and deposited in each of the above accounts at KRW 1 billion on the same day.

3) However, on November 21, 2009, ○○ Bank’s ○○ Bank’s chapter head and exaggeration DooD requested ParkCC to buy the instant insurance, and ParkCC subscribed to the instant insurance with the Plaintiff as the contractor, the insured, and the beneficiary. He terminated one of the fixed deposit accounts (Account Number: 00-000-00-00-2) opened in the name of the Plaintiff as of the preceding day, and made one billion won deposited in the said account to be deposited into the instant insurance premium immediately from the said account.

4) On December 18, 2012, when the investigation into the withdrawal of funds by △△ regional tax office was in progress, a notary public agreed on December 18, 2012 that a domestic deposit, etc. deposited in the name of the Plaintiff in the name of the Plaintiff shall be successively returned to ParkCC in order. On May 9, 2013, a notary public agreed to change the contractor and the beneficiary of the instant insurance into ParkCC as part of the procedures for returning the deposit exchange agreement in the name of the deposit source, No. 460 of 2013, which was written in the name of the Plaintiff.

[Reasons for Recognition] The evidence as mentioned above, Gap evidence Nos. 3, 4, 6, 10, testimony of witness D and the purport of the whole pleadings

D. Determination on the subject to whom the instant insurance contract reverts

1) The fact that the term deposit account in the Plaintiff’s name, which was deposited in the lump-sum payment of the instant insurance premium, was managed in the name of the Plaintiff by ParkCC in the name of the Plaintiff, and that it is the property owned by ParkCC as seen earlier or there is no dispute between the parties. Therefore, the Plaintiff is presumed to have received the instant insurance premium in cash from ParkCC, and in such a case, if there are special circumstances, such as that the instant insurance premium payment in the Plaintiff’s name was made for other purposes than the donation, the burden of proof for such fact shall be the Plaintiff, the taxpayer.

2) We examine the following circumstances: (a) ParkCC appears to have managed its financial assets by means of earning income while running a business overseas and investing in financial products under the Plaintiff’s name for a long time; (b) ParkCC entered into an agreement with the Plaintiff upon the recommendation of the head of ○○ Bank ○○ branch office in the process of managing property under the Plaintiff’s name as above; (c) UDR, who is the person in charge of ○○ Bank ○○ branch office in relation to the instant insurance contract, was deemed to have been in charge of managing and disposing of the Plaintiff’s financial account at the time of ordinary banking transactions; (d) it appears that ParkCC’s business was deemed to have been in charge of managing and disposing of the Plaintiff’s financial account under the Plaintiff’s name, including the Plaintiff’s name, signature, signature, and seal, and investment explanation; and (e) it appears that it was difficult to view the Plaintiff’s bank account in the process of managing and operating the instant insurance contract under the Plaintiff’s name as the title of the Plaintiff’s insurance contract.

E. Determination on the non-existence of the timing of donation

1) The main text of Article 34(1) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 9916, Jan. 1, 2010) provides that "where there is a difference between the beneficiary of insurance money and the payer of insurance money in life insurance or non-life insurance, the amount of insurance money shall be deemed as the value of donated property of the beneficiary of insurance money if the insured event occurs." Here, an insured incident refers to an uncertain accident that specifies the insurer's liability to pay according to the specific contents of the insurance terms and conditions,

2) Meanwhile, in light of the following circumstances that can be acknowledged by comprehensively taking into account the nature of the insurance of this case into account the following circumstances, i.e., (i) the insurance of this case provides that if the insurance of this case terminates halfway unlike the deposit, the amount deducted shall be paid; (ii) the insured is living before the expiration of the insurance period; (iii) the insured becomes dead or disabled due to a disaster during the insurance period; (iv) the insured is obliged to pay the insurance premium; and (v) the insured is obliged to pay the insurance premium; and (v) the contractor and the insured are obliged to inform the insurer of the fact that it is necessary for risk assessment before accepting the subscription and has an important effect on the occurrence of the insurance accident; and (v) the insured are obliged to inform the fact that they know of the fact that it is necessary for the risk assessment before accepting the subscription; and (v) the termination of the contract under the provisions following the breach of the duty of disclosure.

Ultimately, the insurance of this case has the nature of insurance for itself in that the plaintiff, the only legal successor of the plaintiff, who is the insured insured, is ParkCC, the actual control over the insurance of this case, and that the beneficiary of the insurance is designated as the plaintiff at the maturity of the insurance. Thus, it is reasonable to see that the donation period for the plaintiff, who is designated in the insurance of this case as the contractor, the insured and the beneficiary of the insurance of this case, is the time when the termination refund is received or the insurance is received after the maturity of the insurance, and it is difficult to see that the donation was made at the time of the purchase of the insurance of this case only because the contractor, the beneficiary of the insurance of this case, and the beneficiary of the insurance are designated as the plaintiff at the maturity of the insurance of this case.

F. Sub-committee

Therefore, on November 23, 2009, the insurance day of the instant case, the Defendant’s instant disposition was unlawful on the premise that ParkCC donated KRW 1 billion to the Plaintiff on November 23, 2009.

3. Conclusion

Therefore, the plaintiff's claim is reasonable, and it is decided as per Disposition by admitting it.