Seoul Administrative Court-2016-Gu Partnership-61570 ( October 10, 2017)

The amount withdrawn from the borrowed account managed by the decedent shall be the property of the decedent.

It is reasonable to see that the borrowed name account managed by the decedent is owned by the decedent, and it is insufficient to recognize that the borrowed name account is the account of the LL or that the decedent was entrusted with the management of the funds by the LL.

Article 15 of the former Inheritance Tax and Gift Tax Act / [Presumption of Inheritance of Property Disposed before the date of commencement of inheritance]

2017Nu3986 Revocation of Disposition of Imposing inheritance tax, etc.

LLL outside2

o Head of the tax office other than 1

September 19, 2017

October 10, 2017

1. The following part of the part concerning Plaintiffs H1 and H2 of the judgment of the first instance shall be revoked:

Defendant SS Head of the tax office’s revocation of each inheritance tax imposed on Plaintiff H1 and H2, respectively, on the part exceeding KRW 1,***,**,***,**,***, respectively, in the disposition of imposition of KRW 1,**,**,**,*** (including additional tax).

2. Plaintiff LL’s appeal against Defendant SS director, Plaintiff H1’s appeal against Defendant KK1, and Plaintiff H1 and H2’s remaining appeal against Defendant SS director are all dismissed.

3. The costs of appeal arising between the Plaintiff LL and the Defendant SS Head shall be borne by the Plaintiff LL LL LL, the costs of appeal arising between the Plaintiff H1 and the Defendant KK Head of the tax office, by the Plaintiff H1 per 90% of the total costs of appeal arising between the Plaintiff H1, the Plaintiff H1 and the Defendant SS Head of the tax office, the remainder by the Defendant SS Head of the tax office, the 95% of the total costs of appeal arising between the Plaintiff H2 and the Defendant SS Head of the tax office, and the remainder by the Defendant SS Head of the tax office, respectively.

The decision of the first instance court is revoked. The decision of the defendant KK Head of the tax office is revoked. The imposition of each gift tax listed in the separate sheet in the separate sheet in the attached sheet in the plaintiff H1**. The imposition of each gift tax on the plaintiff H1 and H2*. The defendant SS Head of the tax office on the plaintiff H1*. The imposition of each inheritance tax on the plaintiff H1 and H2********************. the imposition of each global income tax listed in the separate sheet in the separate sheet in the attached sheet in the plaintiff H2**.*.* The imposition of each gift tax on the plaintiff H2**.*.* the imposition of each gift tax listed in the separate sheet in the separate sheet in the attached sheet in the plaintiff H1 **.

1) ‘1,**,**,*****' of the complaint and petition of appeal seems to be a clerical error.

1. Details of the disposition;

원고 LLL는 197*년경부터 $$$(이하 '피상속인'이라 한다)와 사실혼 관계를 유지하면서 피상속인과 사이에 원고 HH1, HH2를 자녀로 두었고, 피상속인은 2011. **. *. 사망하였다.

The Defendants added KRW 1,*********,**,***** to the taxable value of inherited property of the inheritee, which was withdrawn from the above accounts and collected within 2 years prior to the date of commencing the inheritance. At the same time, within 10 years prior to the date of commencing the inheritance, the Defendants: (a) donated to the heir or a non-heir (Plaintiff H1, LLL, L1, LL1 (legal spouse), Ha**(legal spouse), Ha***(L), ** (L), *)] to the total amount donated to the heir or a non-heir within 5 years before the date of commencing the inheritance; (b) calculated the inheritance tax base by adding the interest income of the inheritee to the taxable value of inherited property; (b) calculated the global income tax base of the deceased **** by regarding the global income tax base of the deceased *** by regarding the global income tax base of the deceased **** by regarding the global income tax base of the deceased ****** by regarding the Plaintiff 1010th of the gift tax base of the deceased ******.201.

After that, the head of the defendant SS Tax Office revoked ex officio the part exceeding KRW 1,****,*****,*******(including additional tax) of the imposition of each of the above inheritance tax imposed on the plaintiff H1 and H2 on the plaintiff H2, that the plaintiff's global income tax obligation of the deceased succeeded to during the course of the lawsuit in this case should be deducted from the value of inherited property" (hereinafter referred to as "the disposition of this case").

[Ground of recognition] Facts without dispute, Gap 1 through 6 evidence, Eul 1 through 4, 21, 23 and 27 evidence (including paper numbers), the purport of the whole pleadings

2. Whether a lawsuit on the part of which disposition is revoked ex officio is legitimate;

When an administrative disposition is revoked, such disposition shall lose its validity and no longer exists, and a revocation lawsuit against a non-existent administrative disposition is unlawful as there is no benefit of lawsuit (see, e.g., Supreme Court Decision 2012Du18202, Dec. 13, 2012).

As seen earlier, the head of the Defendant SS Tax Office revoked ex officio the part exceeding KRW 1,***,**,***,**, respectively, of the dispositions on imposition of Plaintiff H1 and H2 of inheritance tax on Plaintiff H1 and H2. As such, the part corresponding to the lawsuit in this case is seeking revocation of the disposition that has not already been extinguished, and is unlawful as there is no benefit of lawsuit.

3. Whether the instant disposition is lawful

A. The plaintiffs' assertion

Plaintiff LL has been entrusted with the operation of USD 4,***,***,** by remitting USD 2,*, *, * in the Republic of Korea with the solicitation of the decedent at the end of 199*, and the decedent has been managed and operated through borrowed-name accounts (except for one’s own account) by the decedent. The above funds have been collected as 4,*************, ****** the same student of Plaintiff LL 1 and LL2 in the account of the SI limited company (hereinafter referred to as “SI”) established by the decedent as the shareholder, and have been distributed to the borrowed-name accounts managed by the decedent.

The sum of the amounts reverted to the Plaintiff LL, H1 and LL1 out of the pre-donations account of the inheritee in this case is 4,****,**,***, the amount reverted to the Defendant after the funds raised from the SI’s account out of them is 4, ****,***,****. According to the flow of these funds, it can be sufficiently revealed that the funds remitted by the Plaintiff LL have been transferred in sequence to the name account of the decedent - SI’s account - the name account of the decedent - the name account of the decedent - the name account of the decedent of the decedent - the name account of the decedent of the decedent - the ownership of the Plaintiff LL separately. Nevertheless, the instant disposition was unlawful on the premise that all funds managed by the decedent through the name account of the decedent were owned by the inheritee.

(b) Fact of recognition;

1) The decedent engaged in the construction business, etc., accumulated the property, and was in office as the president by establishing a 2nd Institute around 197*. The Plaintiff LL moved to the United States along with Plaintiff H1 and H2 in the early 199* the early 199*, and was engaged in real estate development projects, including housing auction, while living with the funds sent by the decedent to the United States.

2) At the beginning of 199* 4,**,***,*** deposited in the S Bank account opened in the name of Plaintiff LLL in early 199*, and the JJ stated in the process of investigating the Plaintiffs and the first instance court that “it was deposited in the Plaintiff LL account with money in the U.S. and deposited in the Plaintiff LL account.”

3) After the implementation of the financial real name system, the decedent stated to the effect that he/she has opened and operated a borrowed account in the name of the decedent, such as family heading Kim*, branching Kim*, Ma*, Ma*'s Eastedyyy **, Ma*, the mother of the plaintiff LL*, L1, LL2, s Bank personnel Kim*, the mother of the plaintiff LL**, the mother of his/her mother**, the Kim*, etc., by leasing his/her resident registration certificate to the decedent and opening and operating his/her account in the course of the tax investigation, and Kim**, etc.*

4) On 200*.* on 200* on 1.1.1* on 200* on 4,**,***,** on her own account, as a farming corporation established around 200* on 200* on her own, L1 and LL2 were listed as a shareholder of 50% on her own, but the actual establishment of SI, the deposit of funds, and the management of accounts was conducted on her will.

5) From the 1980s to the 2007, the II Institute owned approximately 1*,000 farmland and received the rent from the decedent. LL1, who was in charge of the collection, etc. of the rent, has determined the rent to the extent of KRW 1,00 per square year in the process of the tax investigation as follows: “The rent was 8*,****, cultivated that person, cultivated that person, and the rent was 8*,*****,000 won per square year. It was delivered to the decedent in February of each year. After then, the II Institute sent it as a check to the decedent. In addition, from around 199* to 200, the decedent received KRW 4,*****,***********.

6) In the above tax investigation process and the first instance court, Kim* stated in the above tax investigation process and the first instance court that "the decedent has established 4,***,**,***,****, on the basis of the funds that the decedent has terminated and withdrawn from the borrowed account on around October 208.* around January 2008, the borrowed account has been terminated again for the purchase, etc. of the land of SI and withdrawn 3,*****,*********. SI was a farming company that was established by the decedent, and at the time, the funds in the borrowed account were considered to be the money of the decedent because it was divided and managed by the decedent to avoid comprehensive financial taxation at the time."

7) The amount withdrawn from the above gift tax base of Plaintiff H1 with respect to Plaintiff H1 1 1 **,*,**,****,**, the above gift tax base of the deceased 1,3*,***,****, the amount withdrawn from the deceased's borrowed account from the deceased's borrowed account from November 2007 to August 2009 2,*******,**. from the other deceased's borrowed account of the deceased 2,****,***, *, *00 won reverted to Plaintiff H1, LLLL and LL1 were reverted to the deceased * 4,832,60,000, 1000, 1000, 1006, 1006, 1005, 1006, 1005, 2000*****,600, 206, 1005, 2000.

8) An inheritee used funds within the above borrowed name account at its own will and transferred money from the above borrowed name account to the above borrowed name account, the inheritee’s spouse**, son*, his or her husband’s spouse under the law, includes the above borrowed name account.

[Ground of recognition] Facts without dispute, Gap-7 through 12, 15, 17 through 19, 21, 22 evidence, Eul-5 through 11, 13, 15, 20, and 22 evidence (including paper numbers), the witness of the first instance court, the JJ, Kim*, witness of the court of first instance * each testimony and the whole purport of arguments.

Judgment

1) Where a title trustee has entrusted the name of the depositor after the enforcement of the title trust agreement, the title trustee is obligated to transfer to the title truster the right acquired under a contract with the other party in a relationship with the title truster, and the title truster under a title trust agreement between the contributor and the deposit holder is obligated to transfer the claim to return the deposit to the financial institution upon the request of the contributor. If, after such title trust was completed, the financial institution fully or partially repaid the deposit claim to the contributor’s co-inheritors upon the death of the contributor, the deposit repaid should be deemed to have been attributed to the contributor’s co-inheritors in a relationship with the title trust title truster under the title trust agreement between the contributor and the title truster’s co-inheritors (see, e.g., Supreme Court Decisions 200Da49091, Jan. 5, 2001; 201Da86720, Feb. 23, 2012). In light of these legal principles and the principle of substantial taxation, where the title truster’s deposit is transferred from the deposit to the title truster’s gross income.

2) As seen in the above facts of recognition, the above borrowed name account was opened in the name of the inheritee by the inheritee, and the money within the said account was managed and operated according to the will of the inheritee. Therefore, barring any special circumstance, not only the money in the name of the inheritee but also the money in the above borrowed name account constitutes the donation of the inheritee, and the money within these accounts are included in the inherited property of the inheritee following the death of the inheritee, and the obligation to pay global income tax on the interest income accrued from the deposit belongs to the inheritee.

3) Meanwhile, as alleged by the Plaintiffs, Plaintiff LL has been transferred to the Republic of Korea corresponding to KRW 4,**,**,****, considering the following circumstances acknowledged by the above facts and evidence, it is difficult to view that the above amount was excluded from the property of the inheritee because it is separately managed as the property of Plaintiff LL between the decedent and the Plaintiff LL, and the amount subject to the instant disposition is included in the property of the inheritee regardless of the name or borrowed account, so the Plaintiffs’ assertion is without merit.

① First of all, there is no evidence as to how the decedent has distributed and managed the above deposits in the name of the Plaintiff LL in the instant case, 4.****,***** how the decedent has deposited and managed the borrowed account. Since the decedent appears to have managed and operated considerable funds from the farmland owned by the IIA and the borrowed money directly transferred from the IIA, the decedent would have been managed and operated through his own name or borrowed account, the decedent would have been transferred to the Republic of Korea by the Plaintiff LL 4.******,***********, the decedent's deposits in the borrowed account, etc., the decedent would have been separated from the funds originally possessed by the decedent.

② Since the costs of real estate development projects conducted in the United States as well as the U.S. living costs of the Plaintiff LL have a high possibility that the source was the funds of the inheritee accumulated in parts through construction projects, etc. for a long time, it is difficult to view that the Plaintiff’s transfer to Korea by the Plaintiff LL***,**** the decedent’s transfer of money to Korea with the money owned by the Plaintiff LL. In fact, the decedent is a legal spouse while managing and operating a considerable amount of money through a borrowed account as well as the account in his name. In fact, the decedent appears to have been used voluntarily according to his/her own will, including the transfer of money to **, who is his/her father, and there is no such data to deem that the withdrawal or use was reflected in the intent of Plaintiff LL or there was any obstacle to the voluntary use, etc. of the decedent.

③ The similarity of each amount of the above 4,******,*****,**,*,*,**, and L1 reverted to Plaintiff LL, H1 and L1 through the borrowed account of the deceased and the deceased, 4,*****,**,**,**,***,**, the amount reverted after the date of the establishment of the SI.** 4,************,*********) respectively, of the funds remitted to the Republic of Korea of the Plaintiff LLL, even if there are circumstances in which the decedent last reverted to the part of the Plaintiff LLL LL, taking into account the contribution of the Plaintiff LL on property increase, etc., it is not sufficient to support the motive of the decedent’s donation to the Plaintiff LLL side, and further, to support the management of the money of the Plaintiff decedent’s property separately.

④ Since SI was established by, and operated by, the deceased’s will, and 50% shares in each name of LL1 and LL2 do not seem to have been fully owned by the account holders (L1 stated to the effect that “SI was not aware of the capital invested in the above tax investigation process and was not a shareholder.” Nevertheless, the decedent’s 4,****,******** is not classified into the Plaintiff’s capital and deposited the borrowed account into the SI’s account according to the needs of the deceased, and it appears that only the SI was established for the purpose of purchasing the farmland owned by a private teaching institute).

⑤ Although Plaintiff LL opened a large number of borrowed accounts and entrusted the management of 4,**,***,***,**, the details of the borrowed account, etc., as well as the details of the management of the borrowed loan, it appears that there was no verification on the operation of the borrowed loan. This is rather than delegated the decedent to manage his own money separately, it can be deemed that the decedent’s property belongs to the decedent’s property. However, it can be deemed that the considerable amount of money is recognized as his/her own share in the distribution of the property later (i.e.,, the donation was made to Plaintiff LL counterpart).

4. Conclusion

Therefore, among the inheritance tax disposition against the Plaintiff H1 and H2 of the instant lawsuit, the part of the revocation of the above authority is unlawful and dismissed. The appeal against the Plaintiff LL’s director of the tax office, the Plaintiff’s claim against the Defendant KK1, the Plaintiff’s claim against the Defendant KK1, and the remainder of the claim against the Defendant SS director of the Plaintiff H1 and H2 as of the Plaintiff H1 and H2 are dismissed. The judgment of the court of first instance is unfair on the ground that the conclusion as to the revocation of the above authority is different. As such, the part of the judgment of the court of first instance as to Plaintiff H1 and H2 is revoked and this part of the lawsuit is dismissed. The appeal against the Plaintiff LL’s director of the tax office, the appeal against the Plaintiff H1’s director of the tax office, and the remaining appeal against the Defendant H1 and H2 against the Defendant SS director of the tax office is dismissed. All of the appeals are dismissed.