The judgment below is reversed and the case is remanded to Seoul High Court.

The grounds of appeal are examined.

1. Article 31(1) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 11609, Jan. 1, 2013; hereinafter “Gift”) provides that donated property subject to gift tax shall include all things having economic value that can be converted into money and all de facto or de facto rights having property value.

In addition, Article 60(1) declares the principle of market value by requiring the value of the property on which a gift tax is levied to be in accordance with the market price as of the date of donation. Paragraph (2) of the same Article provides that the market price is “the value generally recognized as being constituted if a transaction is made freely between many and unspecified persons,” and Paragraph (3) of the same Article provides that “where it is difficult to calculate the market price in applying paragraph (1), the value assessed by the methods prescribed in Articles 61 through 65 shall be deemed the market

Therefore, property belonging to the donee and having property value which can be converted into money is included in the donated property, and the calculation of the value shall be based on the market price as of the date of donation. However, if no property is freely traded between many and unspecified persons, and there is no other provision in assessing the value thereof immediately, it shall be taxed on the basis of the amount that is the most appropriate value of the property value of the donated property.

Where the status of a donor under an insurance contract transferred to a donee constitutes donated property, there is no adequate way to calculate immediately the market price of the status itself under the insurance contract, but at the time of donation, refund or insurance contract that can be paid by cancelling an insurance contract or cancelling an offer.