Supreme Court Decision 2012Du10710 (Supreme Court Decision 2014.09.04)

A taxpayer of capital gains tax shall be in a position to substantially control, manage, and dispose of capital gains and shall be the subject of the transfer.

At the time of the transfer of the instant land, the Plaintiffs cannot be deemed a taxpayer of capital gains tax because they were in a position to substantially control, manage, and dispose of the capital gains at the time of the transfer, or as the subject of the transfer of the instant land.

Article 14 of the Framework Act on National Taxes

2014Nu7307 Revocation of Disposition of Imposing capital gains tax

Red AA et al.

Head of the Office of Government

The third instance decision

Supreme Court Decision 2012Du10710 Decided September 04, 2014

December 1, 2014

January 07, 2015

1. Revocation of a judgment of the first instance;

2. On February 10, 2010, the Defendant: (a) revoked both the disposition of imposition of capital gains tax DDDDD won for the transfer income tax belonging to the year 2005 for Plaintiff Hong A; (b) the transfer income tax belonging to the year 2005 for Plaintiff Hong A; and (c) the disposition of imposition of capital gains tax DDD won belonging to the year 2005 for Plaintiff Hong A.

3. All costs of the lawsuit shall be borne by the defendant.

The same shall apply to the order.

"If a title truster transfers property under title trust at his/her own will, he/she is in a position of de facto controlling, managing, and disposing of capital gains, and thus, he/she is liable to pay capital gains tax. However, if a title truster arbitrarily transfers property under title trust without delegation or consent from the title truster, the transferor is not a title truster, but a title truster is not in a position of de facto controlling, managing, and disposing of capital gains unless capital gains are returned to the title truster, and thus, he/she cannot be deemed a person liable to pay capital gains tax (see, e.g., Supreme Court Decision 98DuOO, Nov. 26, 199). However, in light of the developments leading up to the transfer of the land in this case, the transfer of the land in this case, as recognized above, Red AA appears to have arbitrarily disposed of the land in conflict with the intent of the Plaintiffs, the title truster, who was the title truster, and further, if so, it is difficult to recognize that the transfer price was paid for the transfer of the land in this case under the name of the Plaintiffs.

Therefore, the plaintiffs' claim of this case is justified, and the judgment of the court of first instance is unfair with different conclusions, and it is so decided as per Disposition with the plaintiff's appeal acceptance.