Cho High Court Decision 201Do1135 (No. 21, 2011)

The taxation disposition based on the presumption of inheritance is legitimate because it is insufficient to prove that it was used as living expenses.

Since it is difficult for the plaintiffs to prove that the amount of money withdrawn from the account of the deceased was used as the living expenses of the deceased, and the issue amount is used for purposes other than donation, the taxation by presumption of inheritance is legitimate.

2011Guhap32171 Revocation of Disposition of Imposing Inheritance Tax

PostalAA

The director of the tax office.

December 20, 2011

February 17, 2012

1. The plaintiff (appointed)'s claim is dismissed.

2. The costs of lawsuit shall be borne by the plaintiff (appointed party).

The Defendant’s disposition of imposition of KRW 80,842,388, which the Plaintiff (appointed) entered in the separate sheet on January 3, 2011, is revoked.

1. Details of the disposition;

A. A. On November 1, 2009, the Pre-B (hereinafter referred to as the "pre-employed") died and succeeded to the inheritance of the Plaintiff (appointed parties) and the remaining Plaintiff (appointed parties) (hereinafter collectively referred to as the "Plaintiffs"), and the Plaintiffs reported and paid KRW 80,357,520 of the inheritance tax on May 26, 2010.

F. As a result of the inheritance tax investigation with respect to the Plaintiffs, the Defendant confirmed that the Plaintiff’s office transferred the sum of KRW 240,000,000 from the decedent’s account to the Plaintiff’s account, and notified the Plaintiff of the result of the tax investigation to additionally impose tax amount of KRW 80,842,388, Oct. 19, 2010 by deeming the said issue amount as prior donation property under Article 13(1)1 of the Inheritance Tax and Gift Tax Act (amended by Act No. 9916, Jan. 1, 2010; hereinafter “Inheritance Tax and Gift Tax Act”).

C. On November 16, 2010, the Plaintiffs filed a request for pre-assessment review on the results of the tax investigation, and the Defendant decided not to adopt it on December 16, 2010. On January 3, 2011, the Plaintiffs imposed an inheritance tax of KRW 80,842,380 on the Plaintiffs (hereinafter “instant disposition”).

D. On March 11, 2011, the Plaintiff (Appointed) appealed and filed an appeal with the Tax Tribunal. On June 22, 2011, the Tax Tribunal dismissed the appeal.

[Ground of recognition] Facts without dispute, Gap evidence 1, 10 evidence, Eul evidence l (including paper numbers; hereinafter the same shall apply) through 2, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiffs' assertion

The instant disposition is unlawful for the following reasons for the instant disposition based on a prior donation.

1) On November 16, 2006, a total of KRW 110,000,000,000

The above amount is limited to the payment of living expenses to the plaintiff Han-CC, who was denied by the decedent, and it is merely a joint use by the couple, and it cannot be deemed that the decedent donated the above amount to the plaintiff Han-CC.

2) On July 16, 2009, the Plaintiff (Appointed Party) who is a party to the case where the Plaintiff (Appointed Party) was a party to the case where the Plaintiff (appointed Party) had deposited 30 million won in July 16, 2009 on his behalf of the deceased father) requested that the Defendant would make a subsequent settlement of the monthly living expenses on behalf of the deceased, and that the amount of KRW 100 million was transferred from 2003 to 2007 to the account of the deceased. Since the decedent had deposited the said money in a fixed deposit, the decedent began to pay the above debt to ChoE after the health has deteriorated from 2008, the decedent was to have used the above debt payment for the said decedent’s debt repayment amount of KRW 31,548,000,000,000, which was deposited in the new bank account. Thus, it cannot be deemed that the Plaintiff made a donation to the above Plaintiff.

B) As to the above KRW 130 million in total:

According to Article 15(1)1 of the Inheritance Tax and Gift Tax Act, only where the amount withdrawn by an ancestor from his/her property is at least 200 million won within one year prior to the date inheritance commences, the inheritance tax shall be presumed to have been inherited and included in the taxable amount of inheritance taxes. Article 22(1) of the Inheritance Tax and Gift Tax Act permits inheritance deduction for 200 million won out of the value of net financial property. As such, just because this portion of 130 million won less than 200 million won was transferred to the heir’s account, adding the amount to the inherited property to the inherited property is contrary to the principle

B. Relevant statutes

As shown in the attached Form.

(c)a recognition;

The Defendant analyzed the details of financial transactions of the inheritee for five years at the time of the tax investigation with respect to the Plaintiffs, and verified the use of KRW 1,010,3309, out of the amount distributed from the inheritee’s financial assets (including the key amount deemed to have been donated to the Plaintiff Korea-CC during the above amount), KRW 47,847,733, which was deemed to have been used as living expenses, but deemed to have been used as an unfortunate amount of KRW 180,308,452. However, the Defendant considered the amount of KRW 180,308,452 as an unfortunate amount of KRW 15(1)1 of the Inheritance Tax and Gift Tax Act and Article 11(4)2 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act (the Defendant did not separately include the unfortunate amount of KRW 200 million

[Ground of recognition] Facts without dispute, Gap evidence 1 through 4, 10 evidence, Eul evidence 3, the purport of the whole pleadings

D. Determination

1) On November 16, 2006, a total of KRW 110 million received on November 16, 2006

Inasmuch as it has been revealed that deposits in the name of a donor were withdrawn by the tax authorities and deposited in the deposit account in the name of the taxpayer, such deposits are presumed to have been donated to the taxpayer. Thus, in special circumstances where withdrawal of such deposits and deposits in the name of the taxpayer were made for purposes other than donation, there is a need to prove this to the taxpayer (see Supreme Court Decision 9Du4082, Nov. 13, 2001). The key amount of this case is the deposit account in the name of the decedent and the deposit in the Plaintiff (appointed). Thus, the above amount is presumed to have been donated to the Plaintiff. The special circumstance that the above amount was made for purposes other than donation should be proved by the Plaintiffs. However, it is insufficient to acknowledge that the above amount transferred to the CC with each statement of evidence Nos. 5, 6, 8, and 9 submitted by the Plaintiffs was used for living expenses, etc., and there is no possibility that the amount was used for the purpose other than the Defendant’s allegation that it had been used for the same purpose as the Defendant’s account.

2) The first claim on the aggregate of KRW 130 million deposited in 2009 (a)

As long as this part of the amount is presumed to have been donated to the Plaintiff HanCC, there is a burden of proof against the Plaintiffs regarding the fact that it was used for the purpose other than donation, but it is insufficient to recognize that this part of the amount was used for the purpose of repayment of the obligation to ChoE as alleged by the Plaintiffs, and there is no evidence to acknowledge this differently. Accordingly, the Plaintiffs’ assertion on this part is without merit.

B) the second argument

According to Article 15(1)1 of the Inheritance Tax and Gift Tax Act, where an ancestor disposes of or withdraws from his/her property, and the purpose of use is objectively unclear, it shall be presumed to be inherited property and included in the taxable amount of inheritance taxes. This is interpreted to the effect that the ancestor’s disposal of his/her property, withdrawal of his/her financial property, etc., makes it difficult for him/her to detect the purpose of use or location of his/her property, thereby regulating the act of reducing the burden of inheritance tax. Of the key issues, the sum of KRW 130 million deposited in 209 is determined as the “purpose of donation” against the said plaintiff, and it is merely included in the taxable amount of inheritance taxes pursuant to Article 13(1)1 of the Inheritance Tax and Gift Tax Act, and it does not constitute cases where the place of use of the withdrawn money is not clearly identified. Meanwhile, Article 15 of the Inheritance Tax and Gift Tax Act’s provision on inheritance deduction is irrelevant to the issues of this case, or it is not reasonable to include the Plaintiffs’ prior taxation basis of inherited property in the inheritance tax amount.

3. Conclusion

Therefore, the plaintiff (appointed party)'s claim is dismissed as it is without merit. It is so decided as per Disposition.