Claim in an irrecoverable state is not included in the inherited property;

Whether a claim is in an impossible condition at the time of commencement of inheritance shall be determined depending on whether it can be objectively recognized that there is a situation in which the claim cannot be recovered, and as it is almost impossible to repay the debt with the financial structure at the time of commencement of inheritance due to financing or creation of profits, dispositions including the inherited property are illegal.

2012Guhap8168 Revocation of Disposition of Levying Inheritance Tax

IsaA

Gangnam-gu Seoul Metropolitan Government Heading

February 27, 2013

March 29, 2013

1. On January 25, 2013, the part of the disposition imposed by the Defendant against the Plaintiff, which exceeds OOO(including additional OOO(s)) among those imposed by the Plaintiff is revoked.

2. The costs of the lawsuit are assessed against the defendant.

Cheong-gu Office

The same shall apply to the order.

1. Details of the disposition;

A. The Plaintiff succeeded to the property of the BB (hereinafter “the deceased”) upon the death of the father BB on March 4, 2009 (hereinafter “the inheritance of this case”).

B. On September 30, 2009, the Plaintiff reported and paid the taxable value of inherited property to the Defendant as OOO, OOO, OOO, and OOO, respectively.

C. On May 1, 2010, the Defendant conducted an inheritance tax investigation with respect to the Plaintiff, and added loans (OOOO) to the Deceased Co., Ltd. Co., Ltd., Ltd. and theCC Industry Development Co., Ltd. (hereinafter referred to as “CC Industry Development”), and excluded the Deceased’s joint and several liability obligations (OO) for the Deceased’s CC Report andCC Industry Development, thereby determining the taxable value of inherited property as OOO, deduction amount, OOOO, inheritance tax assessment standard as OOO, OOOO, and inheritance tax as OOO, respectively (hereinafter referred to as “first disposition”), and notified the Plaintiff of the payment of OOOO that deducted the amount of tax payable from the above inheritance tax.

D. On August 2, 2010, the Plaintiff dissatisfied with the request and filed a trial with the Tax Tribunal, but the said request was dismissed on December 13, 201, and the Plaintiff filed the instant lawsuit.

E. Furthermore, the Plaintiff filed a request for correction with the Defendant on September 13, 2012 during the pleadings in the instant case, and accordingly, the Defendant added the gift tax and capital gains tax (OOO) paid by the Plaintiff to public charges, thereby correcting the taxable value of inherited property as OO, OOO, and inheritance tax (hereinafter “the second disposition”).

F. After all, the Defendant, except for the portion excessively appropriated from the inheritance tax amount calculated as a basis for calculating the amount of tax to be declared, notified the Plaintiff to re-revision the amount of tax to be declared as OOO or the inheritance tax to OOO (hereinafter “instant disposition”) and to pay the Plaintiff the amount of tax to be paid after deducting the amount of tax to be paid from the above inheritance tax amount.

[Reasons for Recognition] Facts without dispute, Gap evidence 1 to 3, 5, 10 through 12 (including each number; hereinafter the same shall apply), Eul evidence 1 to 6, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

As of December 31, 2008, the development of theCC industry is a company that vicariously carries out printing operations using the lux electricity of the CCTV, the total amount of assets as of December 31, 2008 is an OOOO members and the total amount of liabilities is an OOO members. In light of the size and form of its business, theCC industry development was not likely to generate profits and repay its obligations. In addition, since the business closure was reported on January 24, 201, the decedent’s loans for the development of theCC industry (hereinafter “the instant bonds”) may not be collected and included in the inherited property. Accordingly, the instant disposition based on the premise that the instant bonds are included in the inherited property is unlawful.

B. Relevant statutes

former Inheritance Tax and Gift Tax Act (Amended by Act No. 9916, Jan. 1, 2010)

Article 7 (Scope of Inherited Property)

(1) The inherited property provided for in the provisions of Article 1 shall include the property belonging to the decedent and all articles having economic and de facto rights having property rights that can be liquidated into money and all de facto or de facto rights having property.

C. Facts of recognition

1) On March 29, 1989, theCC industry development was established for the purpose of running a maritime tourist hotel business, leisure facility construction business, etc., and completed the dissolution registration on December 10, 2004, but began on April 25, 2005, with the continuation registration of the company, and on behalf of printing agency by using the lux electricity of theCC.

2) The amount lent by the Deceased to the Industry Development was used to cover most losses incurred before the registration of the company was made continuously.

3) ① The current shareholder status as of the end of 2008 of theCC Industry Development and ② the financial status from 2005 to 2008 are as follows.

(unit: State)

Stockholders

Number of shares

Deceased

5,000 (50%)

Madddi (Status of the deceased)

2,000 (20%)

Other

3,000 (30%)

Total

10,000 (100%)

(unit: Won)

Reference Date

Sales

Operating Income

net income

December 31, 2007

OOO

OOO

OOO

December 31, 2008

OOO

OOO

OOO

(unit: Won)

Reference Date

Assets:

Debt

Net Assets

December 31, 2005

OOO

OOO

OOO

December 31, 2006

OOO

OOO

OOO

December 31, 2007

OOO

OOO

OOO

December 31, 2008

OOO

OOO

OOO

4) At the time of the commencement of the instant inheritance, the name of OOOOO of a printing le-electric for newspaper printing owned byCC Japan was under the development of theCC industry. Accordingly, when the development of theCC industry decided to discontinue its business or is in progress in liquidation procedures, repayment of the lease loan was required, and the notification of seizure was also sent toCC Japan, which is a joint and several surety.

5) On December 28, 2010, CCTV (CC) sold eEF printing Co., Ltd. with all of its base facilities and ancillary facilities, and repaid the lease loan, etc. Accordingly, on December 28, 2010, theCC industrial development, which was exempted from the foregoing lease liability, held a board of directors meeting on December 28, 2010, decided to suspend business activities and discontinue business activities of the company, and reported the closure of business at the Seoul metropolitan tax office on January 24, 201.

[Reasons for Recognition] Unsatisfy, entry of Gap evidence Nos. 4 through 7, the purport of the whole pleadings

D. Determination

1) The inherited property cannot include claims that are impossible to be recovered at the time of commencement of inheritance. However, since the impossibility of collecting claims falls under exceptional grounds in determining the taxable value of inherited property, the burden of proving such special grounds lies on the person liable to pay the tax (see Supreme Court Decision 94Nu9719, Mar. 14, 1995).

In addition, whether a claim is in an impossible condition at the time of commencement of inheritance shall be determined depending on whether it can be objectively recognized that a debtor is in an irrecoverable situation due to the circumstances such as bankruptcy, composition, company reorganization, compulsory execution, etc., or the situation of excess of his/her obligation continues to exist for a considerable period of time due to business closure, missing, execution of punishment, etc., and there is no possibility that the debtor would otherwise receive the loan, and the debtor may not recover his/her claim in fact due to the absence of bankruptcy (see Supreme Court Decision 2003Du9886, Sept. 24, 2004

2) We examine the following circumstances that can be seen in addition to the overall purport of the pleadings as seen earlier, namely, (i) theCC Industry Development was established on March 29, 1989 for the purpose of maritime tourist hotel business, leisure facility construction, etc., and completed the registration of dissolution on December 10, 2004; (ii) after the continuation of the registration of the company on April 25, 2005, it was carrying out the printing work by proxy using CC Japan’s base electricity instead of the previous target business; (iii) the liabilities were approximately KRW 1,700 times from the time of the continuation of the registration of the company as above until the commencement of the inheritance in this case and the closure of theCC industry development; (iii) the joint and several surety’s joint and several surety’s obligation to suspend its business operation and discontinue its business operation after about 1 year and 9 months from the commencement of the inheritance in this case, it appears that it was objectively impossible for the Defendant to claim that it was not able to recover the financial structure of the instant case.

In accordance with such judgment, if the inheritance tax and additional tax are excluded from the inherited property, the aggregate amount of the inheritance tax and additional tax to be paid by the plaintiff shall be the "total amount of tax" item in the attached tax calculation table, such as the "total amount of tax" column. Therefore, as requested by the plaintiff, the portion exceeding the above "OOOO" item in the disposition of this case (including additional tax OOs) shall be revoked in an unlawful manner.

3. Conclusion

Therefore, the plaintiff's claim of this case is reasonable, and it is decided as per Disposition by admitting it.