Whether the scope of the joint and several liability of co-inheritors changes depending on the payment by other co-inheritors (negative), and, in a case where the tax authority did not specify the limit of the liability for joint and several liability when giving a notice of collection of the amount of tax determined by the tax authority, whether the notice of collection without the limit of the liability for joint and several liability has been given (affirmative) / In a case where there are inherent defects in the collection procedure, whether the notice of collection itself may be contested (affirmative), and in a case where the tax authority gives a notice of collection on the total amount of inheritance tax borne by the co-inheritors, even though the tax authority bears only the liability for joint and several liability for the amount of inherited property received or to be received by the co-inheritors, whether the co-inheritors may file

The joint and several liability of co-inheritors is partly extinguished within the scope of the liability for joint and several payment, and does not change in the scope of the liability for joint and several payment originally borne by other co-inheritors depending on whether to pay the amount of tax. Furthermore, the tax collection demand or seizure under the National Tax Collection Act is premised on the collection notice ordering the payment of the amount of tax finalized. If the amount of tax is unpaid, the tax authority may demand or seize the total amount of the determined amount of tax. Thus, if the tax authority did not specify the limit of the liability for joint and several payment while notifying the collection of the amount of tax finalized, it shall be deemed that the tax authority issued a notice of tax collection without the limit of the liability for joint and several payment. Meanwhile, in a case where the collection procedure inherent defects exist in the collection procedure, the tax authority may dispute not only the liability for joint and several payment, such as demand or seizure, but also the liability for joint and several payment within the extent of the property received or received by the co-inheritors, the limit of the liability for joint and several payment, which is one of its own inherent liability for joint and several payment in an appeal procedure.

Article 3(1) (see current Article 3-2(1) and (4) (see current Article 3-2(3)) of the former Inheritance Tax and Gift Tax Act (Amended by Act No. 9916, Jan. 1, 2010); Article 9 of the National Tax Collection Act; Articles 1 and 12 of the Administrative Litigation Act

Plaintiff (Law Firm Lee Li-EL, Attorneys Yoon Young-young et al., Counsel for the plaintiff-appellant)

The Director of Gangnam District Office

Seoul High Court Decision 2013Nu12128 decided January 17, 2014

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

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

A. The main text of Article 3(1) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 9916, Jan. 1, 2010; hereinafter “Inheritance Tax Act”) provides that “he inheritor is liable to pay inheritance tax according to the ratio calculated as prescribed by the Presidential Decree based on the property that he/she received or is to receive, among inherited property.” Paragraph (4) of the same Article provides that “The inheritance tax pursuant to the provisions of paragraph (1) shall be jointly and severally liable for payment within the scope of the property each inheritor received or is to receive.”

B. The lower court found the following facts: (a) the Nonparty died on April 5, 2009; (b) on the part of his co-inheritors, six persons, including the Plaintiff, etc., did not report inheritance tax; (c) on July 6, 201, the Defendant served the Plaintiff on July 6, 201 on the aggregate of the value of inherited property; and (d) on the list of inheritance tax and co-inheritors liable for joint and several payment (hereinafter “list of co-inheritors”), the Defendant served on the Plaintiff on July 6, 2011 the aggregate of the value of inherited property; (c) together with the total tax amount of KRW 1,030,404,760, one of six persons among the six persons of joint and several taxpayers, who return to the Plaintiff. The lower court stated in the list of co-inheritors, stating that “one of the six persons, including the Plaintiff, is at the time of payment.”

Furthermore, the lower court determined that the Plaintiff’s lawsuit of this case seeking revocation or non-existence of such a disposition was unlawful on the ground that the Defendant did not make any separate disposition as to the limit of the Plaintiff’s joint payment obligation, on the ground that the Defendant’s entry of the total amount of tax to be paid by the Defendant in the notice of tax payment was made by six co-inheritors including the Plaintiff, and that the amount of tax to be paid by each of the above six co-inheritors is deemed to have been individually imposed and notified by the list of co-inheritors. However, when other co-inheritors fulfilled their unique inheritance tax payment obligation, the scope of the Plaintiff’s joint payment obligation may vary if the Plaintiff actually performed his/her obligation, and the Plaintiff could not contest the collection disposition as to the limit of the Plaintiff’s joint payment obligation at the stage of the collection procedure.

C. However, the lower court’s determination is difficult to accept for the following reasons.

(1) The duty of joint and several payment of inheritance tax by co-inheritors is naturally finalized when the obligation of joint and several payment of inheritance tax by each of the other co-inheritors becomes final and conclusive by a taxation disposition against each of them, and thus, the tax authority may initiate the collection procedure immediately to the person jointly and severally liable for payment without any separate final and conclusive procedure. The notice of joint and several payment of inheritance tax by the tax payment notice to one of the co-inheritors is characterized as a disposition in the collection procedure followed by the disposition of each co-inheritors (see, e.g., Supreme Court Decision 98Du9530, Nov. 27, 2001).

The joint and several liability of co-inheritors is partly extinguished within the scope of the liability for joint and several payment, and does not change within the scope of the liability for joint and several payment originally borne by other co-inheritors depending on whether to pay the amount of tax. Furthermore, a notice of demand or seizure under the National Tax Collection Act is premised on the collection notice ordering the payment of the determined amount of tax. If the amount of tax is unpaid, the tax authority may demand or seize the total amount of the determined amount of tax. Thus, if the tax authority did not specify the limit of the liability for joint and several payment while notifying the collection of the amount of tax determined by the tax authority, it shall be deemed that the notice of tax collection does not have the limit of the liability for joint and several payment. Meanwhile, in a case where there are inherent defects in the collection procedure, not only the disposition for arrears, such as demand or seizure, but also the notice of tax collection itself may be disputed not only within the limit of the property received or received by the co-inheritors, but also the tax authority gives notice of tax collection on the total amount of inheritance tax borne by the co-inheritors, as one’s own obligation for joint and several payment.

(2) Examining the facts acknowledged by the court below in light of the aforementioned legal principles, the defendant issued a tax notice to the plaintiff and issued a notice of collection of the total amount without any limit of the joint payment obligation, and if the property received or to be received by the plaintiff does not reach the total amount of tax, the part exceeding the limit of the joint payment obligation among the above notice of collection should be revoked as unlawful.

Nevertheless, the court below rejected the lawsuit of this case on the ground that the Defendant stated the total amount of tax payable by the Defendant in the notice of tax payment was merely a notice of collection of the total amount of tax jointly and severally liable by six co-inheritors, including the Plaintiff, and did not take any disposition as to the limit of the Plaintiff’s joint and several liability for payment of inheritance tax. In so doing, the court below erred by misapprehending the legal principles on the nature of notice of collection of joint and several liability for inheritance tax by co-inheritors or the method of litigation as to the limit of the joint and several liability for payment.

2. Conclusion

Therefore, without further proceeding to decide on the remaining grounds of appeal, the judgment of the court below is reversed, and the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices

Justices Kim Chang-suk (Presiding Justice)