Whether joint and several liability or real liability is included in the subject of deduction under Article 29-4 (2) of the Inheritance Tax Act;

Article 29-4 (2) of the Inheritance Tax Act provides that, among the debts of a donor acquired by a donee, a donor shall be entitled to deduction from the taxable value of a taxable value only the debts for which it is clear that the donor will ultimately bear a burden on his/her own. Therefore, among debts owed by a donor, joint and several liability obligations or collateral guarantee obligations owed by a donor are separate from a primary debtor and are not subject to deduction in principle. However, in cases where a donee cannot exercise a right to indemnity even if a primary debtor performs his/her debts due

Article 29-4(2) of the Inheritance Tax Act

Kim Tae-ok

Head of the Do Tax Office

Seoul High Court Decision 86Gu1247 delivered on May 6, 1987

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

The grounds of appeal by the defendant litigant are examined.

According to Article 29-4(2) of the Inheritance Tax Act, where an onerous donation was made between the spouse, or lineal ascendants or descendants, even if the donee took over the obligation of the donor, the amount of such obligation shall not be deducted from the taxable value of the gift tax in principle: Provided, That where the donee, which is objectively recognized as capable of repaying the obligation, takes over the obligation of the State, local governments, and other financial institutions prescribed by Presidential Decree or judicial finalized debts, then the amount of such obligation taken over shall be deducted from the taxable value of the gift tax. However, it is clear to the effect that only the obligation of the donor whose nationality is certain among the obligation of the donor taken over by the donee is to be deducted from the taxable value of the gift tax, the obligation of joint and several sureties or secured obligation of the donor is not included in the subject matter of deduction in principle because the primary debtor is separately liable to pay the obligation, but if the donee is unable to exercise the right to indemnity even

The court below determined that the debt acquisition amount should be deducted from the taxable value of gift tax solely on the ground that the plaintiff acquired a joint and several surety obligation of the above non-party against the non-party guaranteed insurance company for the non-party, who is his father Kim Jong-bong, on the gift of this case. However, according to the relevant evidence employed by the court below, the non-party 1, a joint and several surety obligation, is insufficient since he did not consider the financial capabilities of the principal obligor. However, according to the relevant evidence employed by the court below, it is recognized that the non-party 1, a principal obligor for the above joint and several surety obligation, was operating the court below at the time of donation of this case and was detained and did not have financial capacity to repay the above debt, and the decision of the court below is just

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 Lee Jin-hun (Presiding Justice)