Cho High Court Decision 2014Do4982 ( December 24, 2014)

The burden of proof of substantial taxation in title trust is presumed to be the taxpayer, and the seal of approval is presumed to have been prepared according to the terms and conditions of the contract,

The presumption of substantial taxation related to the transfer income tax on the real estate held in title trust is presumed to have been prepared according to the terms and conditions of the contract unless there are special circumstances, and there is no evidence to prove that the taxpayer has the burden of proof.

Article 14 of the Framework Act on National Taxes

Seoul Administrative Court 2015Gudan53254 Revocation of Disposition of Imposing capital gains tax

KimA

Head of the tax office;

2015.07.16

2015.08.20

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The Defendant’s disposition of imposition of capital gains tax of KRW 45,720,90 for the Plaintiff on July 1, 2014 is revoked.

1. Details of the disposition;

A. The headB was the owner of a multi-household housing on the ground of the OOO-dong OO-dong OO-dong OO-dong OB. As for the instant housing No. 202 (hereinafter “instant real estate”), the ownership transfer registration under the Plaintiff’s name was made on September 8, 2008 on September 17, 2008, and on April 2, 2009 on April 2, 2009, the ownership transfer registration was made in the name of ParkCC, respectively.

B. The Plaintiff did not file a preliminary return on the tax base of capital gains in relation to the transfer income of the instant real estate, and the Defendant, around July 1, 2014, determined and notified the Plaintiff of the capital gains tax calculated by using the acquisition value of the instant real estate as an OOO (including additional taxes) (hereinafter “instant disposition”).

C. The Plaintiff dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal on October 7, 2014, but the said claim was dismissed on or around December 24, 2014.

[Reasons for Recognition] Facts without dispute, Gap 4, 14 evidence, Gap 7-2, Gap 13-1, Eul 13-1, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The real estate of this case was owned by the Plaintiff, his wife, and No. 201 of the housing of this case, and No. 301 of the housing of this case was owned by the Plaintiff, his wife, under title trust, to Song-E, who is his woman.

The Plaintiff was convicted of violating the Act on the Registration of Real Estate under Actual Titleholder’s Name with respect to the title trust to DoD and EE. Therefore, the instant disposition imposing capital gains tax on the Plaintiff who is a title trustee under the principle of substantial taxation is unlawful.

In addition, the market price of the instant real estate exceeds the KRW OO. The sales contract on the instant real estate between the headB and the Plaintiff stating the purchase price as the KRW OO is merely an entry in the form. Therefore, the instant disposition that calculated capital gains tax by deeming the acquisition price as the KRW OO is unlawful.

B. Determination

1) Determination on title trust

If a title truster transfers real estate to a third party and income from such transfer was attributed to a title truster, under the principle of substantial taxation as stipulated in Article 14(1) of the Framework Act on National Taxes, if the title truster, who is the subject of the transfer, does not become a taxpayer of the transfer income tax (see, e.g., Supreme Court Decision 96Nu6387, Oct. 10, 197); however, the title truster, who is the subject of the transfer, does not become a taxpayer of the transfer income tax (see, e.g., Supreme Court Decision 84Nu68, Jun. 26, 1984).

As to the instant case, it is not sufficient to recognize that B had title trust on the instant real estate to the Plaintiff only with the record of Gap evidence No. 21 and the evidence submitted by the plaintiff, and there is no other evidence to acknowledge this otherwise.

2) Determination on acquisition value

Unless there are special circumstances, the seal of approval issued by the parties to a transaction is presumed to have been prepared in accordance with the sales contract between the parties, and the fact that the contract was prepared differently from the actual ones should be proved by the claimant (see, e.g., Supreme Court Decision 93Nu2353, Apr. 9, 1993).

Meanwhile, according to Article 27 of the Business Affairs of Licensed Real Estate Agents and Report of Real Estate Transactions Act, when a party to a transaction concludes a real estate sales contract, it shall jointly report the actual transaction price, etc. of the real estate to the head of the Si/Gun/Gu having jurisdiction over the location of the real estate subject to sale within 60 days from the date of conclusion of the transaction contract, and when the certificate of completion of report is delivered, the purchaser shall be deemed to have obtained the seal of approval under

According to the records on this case, Gap evidence No. 18-2, the plaintiff was issued a certificate of completion of report under this Act by the head of the OO on September 17, 2008 with respect to the purchase of the real estate of this case, the transaction amount of goods is stated as OOO won in the above certificate of completion of report, and the sales contract attached at the time of report under this Act was stated as OOO won.

In accordance with the above facts, the sales contract for the instant real estate between the Plaintiff and the headB is presumed to have been prepared in accordance with the sales contract, and the grounds alleged by the Plaintiff alone are insufficient to reverse the above presumption.

Therefore, the Defendant’s disposition of this case that calculated capital gains tax by deeming the purchase price OOO as the acquisition price under the above sales contract as the acquisition price is lawful.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.