Seoul Administrative Court 201Gudan15940 ( October 28, 2011)

early 201st century0257 ( October 12, 2011)

Temporary one household does not satisfy the special requirements for non-taxation on one house and one association member's relocation right;

The term "requirements for transfer of existing house within two years from the time when the house, which is a special condition for non-taxation for one association member's relocation right for a temporary one household, is completed, and the house completion date of two years or less, and one year or less, shall be deemed as the date of approval for use. It shall not be deemed as the date of the transfer of existing house after two years from the date of approval for use, and the date of completion of two years or less

Article 156-2 of the Enforcement Decree of Income Tax Act

2011Nu41429 Revocation of imposition of capital gains tax

XX Kim

Head of the District Tax Office

Seoul Administrative Court Decision 2011Gudan15940 decided October 28, 2011

May 29, 2012

July 13, 2012

1. The plaintiff's appeal is dismissed.

2. The costs of appeal shall be borne by the Plaintiff.

The judgment of the first instance shall be revoked.

The Defendant’s disposition of imposition of capital gains tax of KRW 000 against the Plaintiff on August 6, 2010 is revoked.

1. Quotation of judgment of the first instance;

The reasoning for this Court’s explanation is as stated in the judgment of the court of first instance, except for the parts which are dismissed or added as set forth in the following (2) and (3). Thus, this Court’s reasoning is cited in accordance with Article 8(2) of the Administrative Litigation Act and the main text of Article 420 of the Civil Procedure Act.

2. The notification shall be made in part

In addition, from 3th to 4th of the first instance judgment, the number of 3th to 9th of the first instance judgment is as follows.

(1) Plaintiff’s assertion

A) According to Article 156-2(4) of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 22034, Feb. 18, 2010; hereinafter the same) which was enforced at the time of the transfer of the instant first house, in order to constitute a special case concerning non-taxation on one house and one association member's relocation right for a temporary one household, all members of the household must live in the said house as a director (including the case where a part of the members of the household can not move in as provided by Ordinance of the Ministry of Strategy and Finance), within two years after the completion of the house acquired according to the management disposal plan for the housing redevelopment project under the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents and the housing reconstruction project, and within two years before or after the completion of the house acquired in accordance with the management disposal plan for the housing redevelopment project or the housing reconstruction project (No. 2).

B) The above subparagraph 1 requires that the "all members of the household" who are the object of the association member's relocation right reside within 2 years after the completion of the house, as a director and live in the house for 1 year or longer. Since the "part of the members of the household" among the members of the household can not be removed due to school attendance, work circumstances, medical treatment and other inevitable reasons as prescribed by Ordinance of the Ministry of Strategy and Finance, even if there are inevitable reasons, the "part of the members of the household" among the members of the household should be moved in and resided in the house for 2 years or more after the completion of the house.

However, members of the household, including the Plaintiff, have started to reside in the second house of this case from the time two years elapsed from the completion of the second house of this case (on November 30, 2007, the date of approval for use), and on April 16, 2010 (on July 16, 2010, the date of the move-in report on the resident registration) (the date of the move-in report on the resident registration). Since the Plaintiff failed to meet the requirements of subparagraph 1, the Plaintiff cannot be subject to exemption from capital gains tax for one house of one household.

C) In addition, according to the above subparagraph 2 above, one household possessing one house and one association member's relocation right shall transfer the previous house within 2 years before or after the completion of the house subject to the association member's relocation right. In this case, the completion date of the house shall be deemed to be the approval date for use of the house which the competent authority has obtained approval for use after redevelopment or reconstruction works, so that the owner of the house can actually use the house in question and legally.

The plaintiff alleged that the date of completion of the second house of this case was not the date of approval for use, but within 2 years from the completion date of the second house of this case on the premise that the date of completion of the second house of this case was the date of registration for ownership preservation, but the registration for ownership preservation is merely the opening of a registration form of a registry, which is a public account book stating the relation of rights and the factual matters of real estate which is the object of the right, and does not acquire ownership according to its registration. Therefore, the registration date for ownership preservation

In addition, the plaintiff asserts that the second house of this case is not a member of the plaintiff but a reconstruction association constructed by the plaintiff and therefore it is unreasonable to regard the date of issuance of the certificate of use inspection as the date of completion of the second house of this case, i.e., the date of issuance of the certificate of use inspection, i., the date of use approval as the date of completion of the second house of this case. However, in calculating transfer margin, Article 162 of this case prescribes the time of acquisition and time of transfer in calculating transfer margin and is irrelevant to the application of Article 156-2 (4) which prescribes the special cases of non-taxation of the house of one household who owns the house and the occupation right, and "the completion of the house" of Article 156-2

D) Therefore, since the Plaintiff failed to meet any of the requirements under the subparagraphs of Article 156-2(4) of the Enforcement Decree of the Income Tax Act, the Plaintiff’s assertion on this part is without merit.

3. The addition;

In addition, the following arguments and judgments should be added between the fourth and 19 of the first instance judgment.

The plaintiff asserts that even if the acquisition date of the second house of this case is the approval date for use, the plaintiff's transfer of the second house of this case exceeds the two-year period from the completion date of the second house of this case to the extent of 24 days due to lack of knowledge in tax law, the defendant's imposition of large amount of capital gains tax is contrary to tax justice and contrary to the principle of equity and proportionality.

On the other hand, as seen earlier, the Plaintiff could not be subject to the application of special exemption from capital gains tax on one house for one household from the beginning to the beginning because not only the requirements for transfer of existing house (Article 156-2 (4) 2 of the Enforcement Decree of the Income Tax Act), but also the requirements of residence 1 for two years or more from the time when the house was completed, and thus, it could not be subject to the application of special exemption from capital gains tax on one house for one household from the beginning to the beginning. Since not only taxation on capital gains but also non-taxation are binding acts, the discretion to decide whether to impose capital gains in consideration of the circumstances asserted by the Plaintiff is not recognized to the Defendant. Thus, the Plaintiff’s assertion cannot be said to be contrary to the tax justice of this case,

4. Conclusion

Therefore, the plaintiff's claim seeking the revocation of the disposition of this case shall be dismissed as it is without merit, and the judgment of the court of first instance is just in conclusion, and the plaintiff's appeal is dismissed. It is so decided as per Disposition.