If a building was sold to a site on which the building was settled and the registration of ownership transfer was completed under the purchaser’s name before the balance settlement, but the sales remaining amount after removal of the building was received, whether capital gains tax on such site shall be refunded under the former Tax Reduction and Exemption Control Act (amended by Act No. 4165 of Dec. 30, 1989)

Even if the transfer registration of ownership was made in the name of the buyer before the remainder of the site, which is the object of sale, even if the sale was not paid in full to the Plaintiff, the transfer income tax on the site of this case shall be refunded under Articles 62(1) (amended by Act No. 4165 of Dec. 30, 1989) and 50(1) and 51(2)1 (amended by Presidential Decree No. 12035 of Dec. 31, 1986) of the Enforcement Decree of the Regulation of Tax Reduction and Exemption Act, depending on whether the building on the site of this case is settled on the site of this case, not on the date of completion of the transfer registration of ownership, but on the date of receipt of the remainder. Thus, if the building on the site of this case was removed prior to the date of receipt of the remainder, the transfer income tax on the site of this case shall be refunded.

Article 62(1) of the Regulation of Tax Reduction and Exemption Act (amended by Act No. 4165 of Dec. 30, 1989); Article 50(1) of the Regulation of Tax Reduction and Exemption Act (amended by Act No. 12035 of Dec. 31, 1986); Article 51(2)1 of the Regulation of Tax Reduction and Exemption Act (amended by Act No. 12035 of Dec. 31, 1986)

Supreme Court Decision 89Nu1681 Decided September 12, 1989

Park Sang-up, Attorney Park Young-chul, Counsel for the plaintiff-appellant

Head of Dong Tax Office

Seoul High Court Decision 89Gu13266 delivered on April 12, 1990

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

As to the ground of appeal by Defendant Litigation Performers

According to the reasoning of the judgment below, the court below determined as follows: (a) based on evidence, that the plaintiff entered into a sales contract on the site of this case on March 5, 1986; (b) only KRW 150,000,000 on the date of the above contract, including the down payment of KRW 249,20,000,000, and (c) transfer the ownership transfer registration under the purchaser’s name on May 9; and (d) upon making a provisional registration of transfer of ownership under the Plaintiff’s name as a security for securing the performance of remainder claims, the court below determined that the above construction of the building of this case was unlawful on the ground of Article 16(1)5 of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 1581, Nov. 24, 1986; (b) on the ground of the fact that the building on the site of this case was removed and received the remainder on the ground of Article 16(1)5 of the Enforcement Decree of the Income Tax Act before its remainder is paid.

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Yoon Young-young (Presiding Justice)