Cho High Court Decision 2009J3250 (No. 12, 2010)

It is legitimate that the value of the inherited property is calculated at the arithmetic mean of the appraisal values of two appraisal corporations.

The calculation of the value of the inherited property at the arithmetic average of the appraisal values by two appraisal corporations is lawful. If an heir fails to report the inheritance tax base within 6 months from the date the inheritance commences, 50 million won shall be deducted in a lump sum, and the gift tax shall be imposed on the deceased and the cause and burden are different, it shall not be

2010Guhap3002 Revocation of Disposition of Levying Inheritance Tax

Superior AA

OO Head of the tax office

1. The main part of the lawsuit in this case shall be dismissed.

2. On January 3, 2006, the part of the Defendant’s imposition of KRW 126,028,018, which was made against the Plaintiff on June 15, 2010, in excess of KRW 62,692,621, among the imposition of inheritance tax, shall be revoked.

3. The plaintiff's remaining conjunctive claims are dismissed.

4. One-half of the costs of lawsuit shall be borne by the Plaintiff, and the remainder by the Defendant, respectively.

In the first place, on January 13, 2009, the defendant revoked the disposition of imposition of KRW 368,563,320 (in light of the description of evidence No. 1-2, "368,563,020," written in the plaintiff's application for modification of the plaintiff's purport, is obvious that it is a clerical error) of inheritance tax on January 3, 2006 against the plaintiff.

Preliminaryly, the Defendant’s disposition of imposition of KRW 126,028,018 of inheritance tax inherited on January 3, 2006 against the Plaintiff on June 15, 2010 is revoked (in light of the description of evidence No. 3, it is evident that the date of disposition specified in the Plaintiff’s written application for modification of the purport of the claim is a clerical error).

1. Details of the disposition;

A. The plaintiff, the non-party BB and the CCC (hereinafter collectively referred to as "the plaintiff et al.") are the successors of the SouthD (hereinafter referred to as "the deceased") who died on January 3, 2006. B is the deceased's spouse, and the plaintiff and the CCC are the deceased's children. At the time of the death of the deceased, the status of the property of the deceased is as shown in the attached list of property.

B. The Defendant calculated the sum of KRW 1,237,152,500 on the attached list 1 through 4 as inherited property, as the Plaintiff et al. did not report the inheritance tax base and tax amount (the first disposition). On August 8, 2008, the Defendant imposed KRW 40,875,710 on the Plaintiff et al. on January 3, 2006 (the first disposition).

C. After that, when the land No. 5 on the Attached Property List was confirmed as inherited property by the deceased, the defendant issued an additional disposition on January 13, 2009 on the inheritance tax of 368,563,320 won (calculated amount of KRW 368,563,327 or KRW 100,000) to the plaintiff, etc. on January 3, 2006 (the second disposition).

D. On August 21, 2009, the Plaintiff was dissatisfied with the second disposition and filed an appeal for inheritance tax with the Tax Tribunal on April 13, 2009. The Tax Tribunal accepted the Plaintiff’s claim on April 12, 2010. However, the Plaintiff asserted that the grounds for illegality of the second disposition (i.e., the tax liability was not specified by the heir, and (ii) the calculation of the value of inherited property and the inheritance deduction was erroneous (including the purport that the inheritance should be imposed only on the Plaintiff’s inherited property through an agreement division), but the Tax Tribunal did not determine the Plaintiff’s claim as to the second disposition.

E. Accordingly, on June 15, 2010, the Defendant revoked the secondary disposition and notified the Plaintiff, etc. of KRW 368,563,320 of inheritance tax inherited on January 3, 2006, along with the list of persons jointly and severally liable for payment by inheritor. Of them, the Plaintiff’s tax amount payable by inheritor is KRW 126,028,018 (third disposition).

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 through 4, 13, Eul evidence No. 1-1 to 5, the purport of the whole pleadings

2. Determination on the defense prior to the merits

A. The defendant's assertion

The defendant asserts that the main claim part of the lawsuit in this case is already subject to the cancellation disposition, and there is no benefit in the lawsuit, and that the conjunctive claim part is unlawful since it was filed without going through legitimate procedure of prior trial under the Framework Act on National Taxes.

B. Determination

(1) The main claim part

As seen earlier, the Defendant’s revocation of the second disposition according to the decision of the Tax Tribunal is inappropriate as there is no interest in the Plaintiff’s primary claim seeking revocation of the second disposition.

(2) Preliminary Claim part

In a case where a tax authority changed a disposition that is the object of a tax disposition while the appeal procedure is in progress, and the grounds for illegality are common, the Commissioner of the National Tax Service and the National Tax Tribunal were given an opportunity to re-determine the basic facts and legal issues, such as when the preceding disposition was duly conducted, and in a case where there are reasons such as the fact-finding and legal issues, and it seems that the taxpayer would be harsh to make the taxpayer go through the preceding trial procedure, the taxpayer may file an administrative lawsuit seeking the revocation of the tax disposition even without going through the preceding trial procedure (see, e.g., Supreme Court Decision 96Nu2200, Apr.

As seen earlier, the Plaintiff’s claim for a trial by the Tax Tribunal by asserting that (i) the liability for tax payment was not specified for each inheritor regarding the second disposition; (ii) that there was an error in calculating the value of inherited property and inheritance deduction; (iii) that the Tax Tribunal accepted the claim; and (iv) that the Plaintiff did not determine the second disposition; and (v) that the grounds for illegality alleged by the Plaintiff regarding the third disposition are common to the grounds for illegality alleged in the preceding trial procedure as follows. The demand for a second instance procedure by the tax authority and the Tax Tribunal would be harsh to the Plaintiff even if there was a lack of opportunity to determine the said illegal cause, and that the Plaintiff may seek a revocation of the third disposition even without undergoing the preceding trial procedure. Therefore, the Defendant’s claim in this part is without merit.

3. Whether the disposition is lawful;

A. The plaintiff's assertion

(1) Mistake in calculating inherited property

① In calculating the value of inherited property, the Defendant calculated the land price Nos. 1 and 5 on the attached list No. 1 and 5 in excess of the compensation paid by BB and the Plaintiff from FF head. ② The Defendant deducted KRW 500 million from co-inheritors without applying basic deduction and disability deduction.

(2) Gift tax and double taxation of inheritance tax on the uniform inherited property

On January 5, 2009, the Defendant imposed the gift tax of KRW 101,828,90 on the land No. 1 on the attached list No. 45,875,710 on the attached list No. 1, and each of the land No. 5 on the same list No. 5, but imposed the inheritance tax again, and applied double taxation on the unified property.

(3) The portion of the Plaintiff’s share of inherited property due to the agreement on division of inherited property on May 10, 2006

On May 10, 2006, the Plaintiff agreed upon and divided inherited property on May 10, 2006, and the Plaintiff acquired only 1/2 shares of land No. 1/2 as inherited property, but the Defendant did not reflect it in the calculation of inheritance tax against the Plaintiff

(b) Related statutes;

The entries in the attached Table shall be as follows.

C. Determination

(1) Judgment on the assertion that the calculation of inherited property was erroneous

According to Articles 60(1) and 61(1) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 9916, Jan. 1, 2010); and Article 50(1)4 of the Enforcement Decree of the same Act, the value of inherited property shall be assessed on the basis of the date on which the inheritance commences, but in principle, the value of land shall be assessed on the basis of the date on which the inheritance commences. In the case of land without a publicly assessed individual land price, the head of the competent tax office shall make an assessment under Article 9(2) of the Public Notice of Values and Appraisal of Real Estate

In this case, considering the overall purport of the arguments in the evidence Nos. 7, 8-1, 2, 3, and 2-1, 4 of the evidence Nos. 2, the defendant calculated the value of inherited property in calculating the value of inherited property, with respect to the land No. 1 on the attached list No. 5 of the same list without the officially assessed individual land price as of Jan. 1, 2006, the average appraisal price of the land No. 5 of the same list as of May 31, 2005 is appraised each value by taking an arithmetic mean of the appraisal prices of two appraisal corporations as of May 31, 2005. Meanwhile, on February 15, 2007, the non-party FF head assessed each value of the land No. 1 on the attached list No. 705,500 won in total, Dec. 27, 2007, Feb. 15, 2008; No. 20653, Aug. 19, 2008>

According to the above facts, the defendant calculated the value of inherited property by reflecting the price of the inherited property at the time of January 1, 2006 (attached Form 1 land) and May 31, 2005 (attached Table 5 land) adjacent to the date of commencing the inheritance, which is the date of commencing the inheritance, is lawful in accordance with the provisions of the law, and it is lawful in accordance with the provisions of the law. It is difficult to view that the defendant erred in calculating the value of inherited property solely on the ground that the land price at the time of December 1, 2006, which is lower than the above price, is lower than the above price, and therefore, the plaintiff's assertion

In addition, according to Articles 21(1) and 67(1) of the same Act, where an heir fails to file a report on the inheritance tax base within 6 months from the date the inheritance commences, 50 million won shall be deducted in calculating the inheritance tax base in a lump sum. Since the fact that the Plaintiff, etc. did not file a report on the inheritance tax base within the above period is as seen earlier, it cannot be deemed that the Defendant erred in collectively deducting 500 million won in calculating the inheritance tax base, and thus, the Plaintiff’s assertion on this issue

(2) Judgment on double taxation assertion

In addition to the purport of the arguments in the statement Nos. 1-4, 7 through 12, 13-1, and 2 of the evidence Nos. 1-2, the following facts are as follows: ① each land on the attached property list is the land acquired by Hah, the external mother of the Plaintiff, which was acquired by inheritance on November 3, 1955; ② the remaining ZY, the remaining Y, and the remaining Y inherited 1/3 shares of the Plaintiff; ② the remaining ZZ and 2/3 shares of the Plaintiff’s total of the shares of the deceased’s mother (DDD) and the remaining Y, upon the agreement on division of inherited property as of May 13, 2002, the remaining YY-1/3 shares were acquired by each deceased’s donation as of the same date; ③ the tax authority imposed the inheritance tax on the Plaintiff’s remaining Y-2 and 13-3 shares of the deceased’s inheritance on the remaining Y-1/207.

According to the above facts, gift tax imposed on each land listed in the attached list is imposed on the deceased on May 13, 2002 by gift made on the deceased on the attached list, and the cause and burden are different from that of inheritance tax imposed on the plaintiff et al., and even if the plaintiff et al. is liable for the tax due to a separate reason such as inheritance, since the amount equivalent to the tax is deducted from the value of inherited property and excluded from the subject of imposition of inheritance tax, the plaintiff's above assertion

(3) Determination as to the assertion that the content of the agreement on division of inherited property is not reflected

According to Article 3(1) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 8828 of Dec. 31, 2007), an inheritor is liable to pay inheritance tax on the basis of the inherited property received or to be received by each person among inherited property. According to the evidence evidence Nos. 6, 7, 10, 11, and 12, the Plaintiff, etc. divided the deceased’s inherited property through consultation on May 10, 2006. The Plaintiff, etc. agreed on the transfer of land No. 1 on the attached list No. 705,35,500, which received compensation from the FF head of FF on February 15, 2007 and deposited KRW 342,50,000 among them into the bank account of CCC.

Details of the consultation division

(1) The Plaintiff shall acquire land No. 1 in the list of bridges, and pay 1/2 of the compensation to CCC.

② The Plaintiff waives all inheritance on the inherited property other than the above land.

③ The Plaintiff is liable for taxes and public charges only for the above land I 1/2 and the remainder of the inherited property is borne by BB and CCC.

In light of the overall contents of the above consultation division (in particular, the agreement that the compensation or public charges of the above land will be reverted to the Plaintiff only 1/20,000), and the fact that the compensation received by the Plaintiff has been actually paid to CCC, it is reasonable to deem that the above consultation division purports that the Plaintiff acquires only 1/2 shares of the above land (so, the Plaintiff does not succeed to the securities listed in the attached list No. 4). Thus, the value of the property inherited by the Plaintiff is 2,25,824,50 won (= KRW 757,392,00), 17.01% of the total value of the inherited property (=378,696,000 won ± 2,25,824,500 won x 1/2000 won) (= KRW 378,696,25,24,500 x100 won).

Therefore, among the third disposition, the part imposing inheritance tax ("tax amount to be paid by inheritor") on the plaintiff exceeding the above 62,692,621 won among the third disposition is illegal (However, there is no change in the total amount of inheritance tax that the plaintiff imposes joint and several tax liability). Therefore, the plaintiff's argument is justified

4. Conclusion

Therefore, the part of the main claim in the lawsuit of this case is unlawful and dismissed, and the plaintiff's conjunctive claim is accepted as it is reasonable within the scope of the above recognition, and the remainder of the conjunctive claim is dismissed as it is without merit. It is so decided as per Disposition.