Whether the Plaintiff has held title trust with the key real estate

It cannot be deemed that the Plaintiff’s transfer of ownership on the ground of sale of real estate is the restoration to the name under the title trust agreement.

2017Guhap70459 Revocation of Disposition of Imposing capital gains tax

KimA

BB Director of the Tax Office

2018.07.03

2018.08.14

1. The plaintiff's claim is dismissed.

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

The Defendant’s disposition of imposition of capital gains tax of KRW 904,640,240 for the Plaintiff on March 7, 2017 shall be revoked.

1. Details of the disposition;

A. On April 12, 2002, the Plaintiff completed the registration of ownership transfer of a house listed in attached Table 1 List 1 (hereinafter referred to as “defensive house”). On February 10, 2014, the Plaintiff completed the registration of ownership transfer to the CCC largest (hereinafter referred to as “GGCC”).

B. Meanwhile, on November 26, 1986, the Plaintiff’s spouse DoD acquired the ownership of a house listed in [Attachment 1 List 2 (hereinafter “non-defensive house”). On April 11, 2014, the Plaintiff sold to EE, a child, KRW 2 billion, and completed the registration of ownership transfer on the ground of this on April 23, 2014.

C. On June 5, 2014, DoD reported and paid the transfer income tax of KRW 103,866,547 by applying the special deduction for long-term possession of one house per household to the gains from transfer exceeding KRW 900 million in relation to the transfer of housing outside of the issues.

D. ADD died on August 23, 2014, and the Plaintiff and EE succeeded to the property of ED.

E. The Defendant issued a disposition on March 7, 2017, imposing KRW 641,238,134 on the Plaintiff and EE for an irregular under-reported additional tax, KRW 208,636,565 in total, KRW 158,632,092 in total, KRW 904,640,240 in total, and KRW 904,640,240 in total, inasmuch as the instant housing was first owned by the Plaintiff, and the instant housing was nominal trust with KimCC on February 10, 2014.

F. The Plaintiff filed an appeal against the instant disposition, and the Tax Tribunal dismissed the appeal on August 8, 2017.

2. Whether the disposition is lawful;

A. The plaintiff's assertion

The actual owner of the housing at issue was KimCC from the time of new construction, but the Plaintiff received title trust upon completion of the registration of ownership transfer on April 12, 2002, and returned the registration of ownership transfer to KimCC on February 10, 2014. Therefore, even though the requirements for special deduction for long-term possession of one house for one household at the time of transfer of the housing other than the key issue were met, the instant imposition disposition based on the premise that the Plaintiff was two houses for one household is illegal.

B. Relevant statutes

Attached Table 2.

C. Determination

A title trust agreement refers to an agreement that is made between a person who holds, or actually acquires, the ownership or other real rights to real estate and another person to hold or hold real rights to real estate internally and another person, and the registration thereof is to be made under his/her name (Article 2 Subparag. 1 of the Act on the Registration of Real Estate under Actual Titleholder’s Name), Article 1, 9, 10, 11, 12, 13, 14, 16, 18, 5, 8, 13, 14, and 14, 5, 8, 13, and 14, and 5, and 14, and 5, 5, 8, 13, and 14, as a whole, the testimony of the witness KimCC, and it is difficult to view that the Plaintiff as the first house owner of KimCC’s ownership completed the registration of ownership transfer under a title trust agreement on April 12, 2002, the Plaintiff’s assertion that the transfer of housing outside of the issue is without merit.

① The Plaintiff asserted that the sale price of other real estate owned by KimCC in the name of newF, KimCC, and its spouse’s maximumGGG was in possession of an installment savings (Evidence A, No. 13 and 14), and the witness KimCC testified to the aforementioned purport. However, each of the above evidence alone is difficult to view that the said real estate was owned by KimCC in relation to newF, or that the amount withdrawn from the sale price of the said real estate or the financial transaction details submitted was used to newly construct the key house, and there is no other evidence to acknowledge otherwise.

② From 204 to 2004, the Plaintiff provided housing as collateral and received money from a financial institution as an obligor. Furthermore, even after the completion of the registration of ownership transfer in the name of KimCC on February 10, 2014, the Plaintiff provided housing as collateral and received money from a financial institution as an obligor, and the sum of the maximum debt amount in each mortgage reaches KRW 360 million. Moreover, the Plaintiff paid not only capital gains tax arising from the transfer of ownership as of February 10, 2014, but also the acquisition tax and registration fee paid by the purchaser in the ordinary transaction (as alleged in the Plaintiff, KimCC owned the housing as of the first issue, and was returned to the name of the Plaintiff on February 10, 2014, it is reasonable in light of the empirical rule that KimCC, who was returned in the name of the Plaintiff, was not able to obtain capital gains tax, acquisition tax, and registration expenses, but it is difficult to view that there was no objective need for the Plaintiff to pay capital gains tax to the Plaintiff as collateral and to pay the said housing.

③ In light of the fact that documents, such as design drawings, etc. prepared around the time of the new construction of the housing, contain the name of the spouse of KimCC, KimCC resided in the housing for a considerable period of time, KimCC, and KimCC paid property tax on the housing at issue several times from February 10, 2014 to February 10, 201, prior to the completion of the registration of ownership transfer on February 10, 201, even though it is recognized, there is insufficient evidence to deem that KimCC newly built the housing at issue as seen earlier, and there is a possibility that there is a separate legal relationship such as donation concerning the use of the housing at issue or the cost-sharing.

④ In around 2012, the Plaintiff acquired ○○○○○○-ri 402-1 land adjacent to the key house, and 402-2 land, etc., and newly built and resides on the ground. If the Plaintiff is the actual owner of the key house, there is no reason to acquire each of the above real estate. The KimCC and its spouse, even though they had engaged in long-term income activities since their return to the Republic of Korea in 1986, are against common sense that they do not own a house in the Republic of Korea. However, this is merely merely a circumstance or motive that the KimCC would acquire ownership of the key house, but cannot be deemed the ground for a title trust agreement.

3. Conclusion

Therefore, the claim of this case is dismissed as it is without merit. It is so decided as per Disposition.