Cho High Court Decision 201Da1588 (Law No. 15, 2011)

be deemed to have been donated the shares unless there are special circumstances, as long as the shares have been transferred;

In the application of the provision on deemed donation of stock nominal trust, unless there are special circumstances, so long as the name of the stocks has been transferred, the purpose of tax avoidance is presumed to be also presumed, and the burden of proof on special circumstances that can destroy such presumption exists to the person who asserts it.

2011Guhap3690 Revocation of Disposition of Imposition of Gift Tax

XX

Kim Jong-soo

July 5, 2012

September 27, 2012

1. The plaintiff's claim is dismissed.

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

The Defendant’s imposition of KRW 000 of the gift tax on December 1, 2004 and KRW 000 of the gift tax on December 2, 2004 against the Plaintiff on August 3, 2010 shall be revoked in entirety.

1. Details of the disposition;

A. On December 1, 2004, the Plaintiff acquired 8,990 shares of XX General Construction Co., Ltd. (hereinafter referred to as the “instant shares”) and 26,110 shares issued by XX General Construction Co., Ltd. (hereinafter referred to as the “instant shares”) on December 2, 2004 (hereinafter referred to as the “instant shares”) and acquired shares 26,110 shares issued by XX General Construction Co., Ltd. (hereinafter referred to as the “instant shares”).

B. On Aug. 3, 2010, the Defendant: (a) deemed that the KimA, the representative director of the O Construction Co., Ltd. ( XX integrated construction changed the name of December 2, 2004 to an Oconstruction Co., Ltd.; hereinafter referred to as “O construction”) deemed that the instant shares were trusted in title to the Plaintiff in the same manner as that of the preceding paragraph; and (b) determined and notified the Plaintiff on Dec. 1, 2004, KRW 00 won of gift tax on gift; and (c) KRW 000 of gift tax on December 2, 2004 (hereinafter referred to as “instant disposition”).

C. On December 3, 2010, the Defendant issued ex officio a correction and determination of gift tax amount of KRW 000 on December 1, 2004, and KRW 000 on December 2, 2004, on the ground that the gift tax of KRW 00 on the donation was erroneously applied to the major shareholder premium rate of a small and medium enterprise at the time of stock evaluation.

D. The Plaintiff, who was dissatisfied with the instant disposition, requested an inquiry to the Tax Tribunal on March 21, 201, but was dismissed on September 15, 201.

[Ground of recognition] Facts without dispute, Gap 1, 2 evidence, Eul 1 to 11, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) The Plaintiff issued a certified copy of the Plaintiff’s resident registration to the effect that KimA would be registered as a director of the Oconstruction, and did not know at all the circumstances that the instant shares were acquired in the name of the Plaintiff. The acquisition of the instant shares is merely a fraudulent name theft, not a nominal trust.

2) Even if the acquisition of the instant shares by domestic affairs constitutes a title trust, the title trust of the instant shares was to meet the licensing criteria for the engineering work business, and there was no fact that KimA avoided the cumulative taxation on the secondary tax liability or dividend income of oligopolistic shareholders. Thus, the Plaintiff and KimA did not have the purpose of tax avoidance.

3) There is a problem in the assessment methods and amount of the instant shares.

B. Relevant statutes

(1) The former Inheritance Tax and Gift Tax Act (amended by Act No. 8828 of Dec. 31, 2007)

Article 45-2 (Presumption of Donation of Title Trust Property)

(1) Where the actual owner and the nominal owner are different from the property which requires a registration, etc. for the transfer or exercise of rights (excluding land and buildings; hereafter the same shall apply in this Article), the value of such property shall be deemed to have been donated by the actual owner on the date (where the property is subject to a change of ownership, referring to the date following the last day of the year following the year in which the date of acquisition of ownership falls), notwithstanding the provisions of Article 14 of the Framework Act on National Taxes, by the nominal owner:

1. Where any property is registered in another person's name without the purpose of tax avoidance, or transfer is not made in the name of the actual owner who acquired the ownership;

(2) Where property is registered, etc. under another person's name, and a transfer of ownership is not made under the name of the actual owner, and during the grace period, the name of stocks, etc. is not converted under the name of the actual owner, it shall be presumed that there exists a purpose of tax avoidance: Provided, That this shall not apply where the transferor files a report on the change of ownership, along with a report under Articles 105 and 110 of the Income Tax Act or a report under

C. Determination

1) The legislative intent of Article 45-2 of the former Inheritance Tax and Gift Tax Act (amended by Act No. 8828, Dec. 31, 2007; hereinafter the same) is to recognize an exception to the substance-over-form principle to the effect that the act of tax avoidance using the title trust system is effectively prevented, thereby realizing the tax justice, so the proviso of the same Article shall apply only where the purpose of the title trust is not included in the purpose of the tax avoidance. The burden of proving that the purpose of the title trust was not the purpose of the tax avoidance is available, and the actual owner is a person who asserts it, and that there was no purpose of the tax avoidance, the application of the provision on presumption of donation cannot be avoided solely on the ground that the nominal owner has no purpose of the tax avoidance (see Supreme Court Decision 2004Du1223, Jan. 2

2) As long as the title of the instant shares was transferred from KimA to the Plaintiff, the Plaintiff is deemed to have donated the instant shares from KimA, barring any special circumstance, and is presumed to have the purpose of tax avoidance, and the burden of proving the special circumstances that may destroy such presumption is the nominal owner, i.e., the Plaintiff, who asserts that such presumption is responsible.

3) The Plaintiff alleged, due to special circumstances, that ① the Plaintiff’s name was stolen, and ② KimA and the Plaintiff did not have the intent of tax avoidance. However, each of the statements in evidence Nos. 1, 2, and 3 is insufficient to accept the above assertion, and there is no other evidence otherwise.

4) Meanwhile, although the plaintiff asserts that there is a problem in the calculation of the value of the shares of this case, there is no evidence to acknowledge it. The plaintiff's assertion is without merit.

5) Therefore, the instant disposition is lawful.

3. Conclusion

Thus, the plaintiff's claim of this case is dismissed as it is without merit.