Seoul Administrative Court 201Guhap4091 ( October 27, 2011)

Cho High Court Decision 2010Du2577 ( November 30, 2010)

Value multiplied by proportional ratio at the time of approval for the management and disposal plan shall not be deemed market price.

There is no provision that the value of inherited property can be assessed by applying the proportion ratio, and the proportion ratio is merely a estimate for measuring development gains following the completion of an urban rearrangement project, and the appraisal value can not be considered as the market price by multiplying the appraisal value by the proportion at the time of the approval plan for the management

2011Nu42507 Revocation of Disposition of Revocation of Inheritance Tax Imposition

IsaA

The director of the tax office.

Seoul Administrative Court Decision 2011Guhap4091 decided October 27, 2011

May 30, 2012

July 11, 2012

1. Following the extension of the purport of the claim made by the Plaintiff at the trial, and the judgment of the first instance is modified as follows. The part of the imposition disposition by the Defendant against the Plaintiff on May 13, 2010, which exceeds KRW 000, out of the inheritance tax imposition disposition by the Defendant against the Plaintiff, shall be revoked.

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

1. Purport of claim

On May 13, 2010, the part of the inheritance tax imposed by the Defendant on the Plaintiff exceeding KRW 000 among the imposition disposition of KRW 000 on the Plaintiff (the Plaintiff sought revocation of the portion exceeding KRW 000 of the first imposition disposition of KRW 000, which was made by the Defendant, and sought extension of the purport of the claim as above, so it is apparent in light of the cause of the claim, etc. that the Plaintiff filed the instant lawsuit in order to seek revocation of the imposition disposition of inheritance exceeding KRW 00,00,000, the amount of the inheritance tax imposed only on the remainder of KRW 00,000 upon the Plaintiff’s filing of the total amount of the inheritance tax after deducting KRW 0,00,000 from the total amount of the inheritance tax imposed on the Plaintiff (i.e., the total amount of KRW 0,000,000, and the inheritance tax imposed on the Defendant had already been subject to reduction of KRW 10,000,000 for the purport of the claim for revocation of the tax.

2. Purport of appeal

The judgment of the first instance is revoked. The plaintiff's claim is dismissed.

1. The part citing the judgment of the court of first instance

2. The reasoning for this Court’s ruling is as follows: (a) whether the instant disposition is legitimate on the grounds of the entry with respect to the instant case; (b) whether the instant disposition is legitimate; (c) the relevant statutes (from the second to the fourth to the fourth to the second to the second); and (d) the grounds for the first instance judgment, except as follows. The relevant parts are cited in accordance with Article 8(2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act.

The third to the third to the eighth is as follows:

D. On May 13, 2010, the Defendant assessed the value of the instant real estate in the above manner. The Defendant assessed the value of the instant real estate by adding 000 won according to the above evaluation and the value of inherited property omitted while the Plaintiff filed a return, and determined 000 won including all kinds of additional taxes to the inheritance tax, and imposed 000 won as inheritance tax by deducting 000 won already reported by the Plaintiff, and deducting 00 won as inheritance tax (the detailed details are the same as the entry in the column for the correction of the assessment of the tax amount of inheritance; hereinafter referred to as “instant disposition”).

2. Part to be used again; and

C. Determination

(1) As to the assertion that it cannot be viewed as a right to acquire real estate

The former Inheritance Tax Act does not define the right to acquire real estate: Provided, That Article 61(5) of the former Inheritance Tax Act provides that the right to acquire real estate shall be the value appraised by the method prescribed by Presidential Decree in consideration of the remaining period, character, content, transaction circumstances, etc. of the relevant right, etc.; pursuant to Article 51(2) of the former Enforcement Decree of the Inheritance Tax Act, the right to acquire real estate (including the right to acquire a building and its appurtenant land when a building is completed) under Article 61(5) of the former Enforcement Decree of the Inheritance Tax Act and the right to use a specific facility shall be based on the sum of the paid amount by the appraisal standard date and the amount equivalent to premium as of the appraisal standard date. In light of the fact that the former Inheritance Tax Act and the Enforcement Decree provides on the premise that the right to acquire real estate shall be paid a certain amount of money, the right to acquire real estate shall not be deemed as the right to request the transfer of the ownership of real estate, such as sales contract, and the right to request the transfer of the ownership of the previous building or new building site.

(2) As to the assertion that the appraisal value by means of multiplying the appraisal value by the proportional ratio is unlawful

Even if the plaintiff's property inherited is "right to acquire real estate", the following circumstances are considered comprehensively, and the value is the appraised amount assessed by the appraisal institution as of the date of authorization for project implementation as of the date of authorization for the management and disposal plan of this case.

① There is no provision that the value of inherited property may be assessed by applying the proportionality ratio.

(2) The proportional rate is the amount calculated by dividing the total project cost from the appraised value of land and buildings after the completion of the project as the assessed value of the previous land and buildings, and it is only the estimated value to measure the development gains accrued from the completion of the urban improvement project.

③ The proportionality is mainly used in figures to present a standard for the cost sharing so that landowners, such as land in a rearrangement project zone can determine whether to participate in the project, and there is a substantial difference depending on the calculation method. Furthermore, it is difficult to readily conclude that the calculation method is objective and reasonable.

(4) After completion of a project that serves as the basis for calculating the proportional rate, the appraised value of land and buildings may be considerably different depending on the business fluctuations, and the total project costs may also be increased or decreased to a considerable extent due to the change in the business plan or the increase in expenses incurred in the business delay.

(5) According to Article 51(2) of the Enforcement Decree of the former Inheritance Tax Act, the value of a right to acquire real estate (including the right to acquire a building and its appurtenant land when a building is completed) shall be calculated based on the amount paid by the date of appraisal as of the base date for appraisal and the amount equivalent to the premium as of the base date for appraisal. In cases of a member, there is no amount paid until the date of commencing

(3) Justifiable tax amount

According to Article 60 of the former Inheritance Tax Act, the value of property on which inheritance tax is levied shall be the market value (including the value which is generally deemed to have been established when free transactions take place between many and unspecified persons, and which is recognized as the market value, as prescribed by Presidential Decree, such as the expropriation and public sale price and appraisal price) as of the commencement date of inheritance (hereinafter referred to as the "evaluation date"). In cases where it is difficult to calculate the market value, the value assessed by the methods prescribed in Articles 61 through 65, considering the type, scale, transaction circumstances, etc. of the relevant property, shall be based on the value assessed by the methods prescribed in Articles 61 through 65. According to Article 61(1)1 and 2, the appraised value of land is the officially assessed individual land price prescribed in the Public Notice of Values and Appraisal of Real Estate Act, and the appraised value of a building is calculated and publicly announced by the Commissioner of the National Tax Service at least once a year, taking into account the new construction price, structure, use, location, and new construction year, etc.

3. Conclusion

As the Plaintiff seeks revocation of the part exceeding KRW 000 by expanding the purport of the claim in the trial, the Plaintiff seeks revocation of the amount that is smaller than the reasonable amount of tax. In line with the scope sought by the Plaintiff, the judgment of the first instance court is modified as follows. On May 13, 2010, the part exceeding KRW 000 of the imposition disposition of inheritance tax against the Plaintiff, which was made by the Defendant on May 13, 2010, is revoked. The Defendant’