Seoul High-2016-0154 (Law No. 13, 2017)

Whether the instant shares constitute a deemed donation of title trust

The evidence submitted by the Plaintiff alone is insufficient to recognize that there was no purpose of tax avoidance, and there is no other evidence to acknowledge it, and thus constitutes deemed donation of stock title trust.

Donation of trust property under Article 45-2 of the Inheritance Tax and Gift Tax Act

Daejeon District Court-2017-Gu Partnership-106151 ( October 28, 2018)

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o Head of the tax office

2018.05.03

2018.06.28

1. The plaintiff's claim is dismissed.

2. Of the costs of lawsuit by a third party, the part arising from the participation by the intervenor in the lawsuit by the third party and the remainder by the plaintiff respectively.

in this chapter.

Cheong-gu Office

The Defendant’s imposition of gift tax of KRW 2,246,227,530 against the Plaintiff on February 1, 2016 shall be revoked.

1. Details of the disposition;

A. S industry corporation (hereinafter referred to as the “instant company”) is a corporation that mainly engages in the manufacture and sale of, and service business for, electrical appliances, etc., and is a corporation listed in the Korea Stock Exchange. The Plaintiff is a certified public labor attorney belonging to PP labor law firm, and the Plaintiff Intervenor (hereinafter referred to as the “ Intervenor”) is the representative director of tt (hereinafter referred to as “t”) for the purpose of semiconductor equipment manufacturing business.

B. From October 15, 2013 to October 30, 2013, the Plaintiff received a total of KRW 3.15 million from the Intervenor to the Han Bank account opened on October 7, 2013, and transferred the said amount to the KIKO Securities account in the name of the Plaintiff, as indicated below: (a) purchased 2,468,200 shares of the instant company from October 17 to November 4, 2013 (hereinafter referred to as “instant shares”).

[a] The intervenor is the wife of the intervenor, and the mm Co., Ltd. (hereinafter referred to as "mmm") is a company substantially controlled by the intervenor as a major shareholder].

C. c. Corporate tax integration of the instant company from November 25, 2014 to March 19, 2015

After conducting an investigation and stock change investigation and a survey on the status of the funds against the Plaintiff, the Intervenor

Considering that the instant shares were held in title trust, it was notified to the Defendant that the Plaintiff would be subject to taxation in accordance with the provision on deemed donation of title trust property under Article 45-2 of the former Inheritance Tax and Gift Tax Act (amended by Act No. 13557, Dec. 15, 2015; hereinafter “former Inheritance Tax and Gift Tax Act”).

D. Accordingly, on February 1, 2016, the Defendant decided and notified that the Plaintiff should pay gift tax of KRW 2,246,227,530 (date of deemed donation: December 31, 2013) on December 1, 2013 (hereinafter “instant disposition”).

[Ground for Recognition: Facts without dispute; Gap's statements in subparagraphs 1 and 2, and Eul's statements in subparagraphs 1 through 4]

2. Summary of the assertion by the plaintiff and the intervenor

(a) Failure to establish a title trust of stocks;

(1) The disposal of listed stocks can be conducted only by the nominal owner who opened an account for trading with a securities company pursuant to the Financial Investment Services and Capital Markets Act, the Act on Real Name Financial Transactions and Confidentiality, and the Commercial Act. Thus, in the case of listed stocks title trust, unlike real estate or unlisted stocks, the title trust with respect to the account for trading in the name of the Plaintiff is established. However, since the transaction confirmation method in the name of the Plaintiff is a self signature and thus it is impossible to transfer the passbook and the transaction seal, and there is no fact that it was delivered to the intervenors, the participant cannot exercise control or dispose of the shares of this case in relation to the Plaintiff, and thus, the title trust with the account owner is not recognized. Therefore, the Plaintiff who is the nominal owner of the account is only the owner of the shares of this case, and the intervenor is not the owner of the shares of this case ( even if a monetary loan contract on the funds for acquiring the shares of this case is not acknowledged between the intervenor and the Plaintiff, it is unlawful in recognizing the title trust of this case solely on the ground that the Intervenor provided the funds for acquiring the shares of this case.

(2) The Plaintiff requested the Intervenor to provide a loan by disclosing his intent to promote M&A to the instant company. Accordingly, the Intervenor entered into a monetary loan agreement with the Plaintiff around October 15, 2013, and only lent KRW 3,150,000,000 to the Plaintiff for acquisition of stocks, and did not have any participation in the M&A; and the Defendant did not pay interest income tax under the said monetary loan agreement to the Intervenor.

It is contradictory to impose gift tax on the Plaintiff on the ground that the Plaintiff is not a monetary loan.

B. Non-existence of tax avoidance purpose

As of the year 2013 in which the Plaintiff acquired the instant shares, the instant company did not have paid dividends for ten (10) years, and even though 15 (15) won per share was paid in 2017, it cannot be deemed that the Defendant’s income tax of KRW 31,910,000 on the interest that the Plaintiff received from the Plaintiff was 48,310 won, and thus, the purpose of tax avoidance exists.

3. Relevant statutes;

The entries in the attached Table-related statutes shall be as follows.

4. Determination as to the illegality of the instant disposition

A. Whether to recognize title trust

(1) The main text of Article 45-2(1) of the former Inheritance Tax and Gift Tax Act provides that “where the actual owner and the nominal owner are different from the property (excluding land and buildings) which requires a registration, etc. for a transfer or exercise of the right, the value of the property shall be deemed to have been donated to the actual owner by the actual owner on the day (where the property is a property requiring a transfer of ownership, it refers to the day following the end of the year following the year in which the date of acquisition of ownership falls) on which the actual owner registers, etc. as the nominal owner, notwithstanding Article 14 of the Framework Act on National Taxes.” Meanwhile, the purpose of the provision is to effectively prevent title trust acts committed by the actual owner of the property for the purpose of tax avoidance and realize tax justice by effectively preventing the title trust acts committed by another person (see, e.g., Supreme Court Decision

In general, a title trust is generally established in an internal relationship between a truster and a trustee in possession of ownership and a management profit. The internal legal relationship between a truster and a trustee is established upon the conclusion of a kind of trust agreement entered into between the truster and the trustee (see, e.g., Supreme Court Decision 86Meu2653, May 12, 1987). Such a contract may be concluded explicitly and implicitly, as well as explicitly. The recognition of the fact of a title trust does not necessarily necessarily require recognition of a title trust or not necessarily require recognition thereof (see, e.g., Supreme Court Decision 2001Da1478, Mar. 9, 2001). In determining whether a title trust exists, the nominal owner of the relevant shares or equity share is not capable of controlling and managing the shares, and where such disparity between the title and the title is attributable to the person who actually controls and manages the shares, the source and purpose of acquiring the shares should be determined by comprehensively taking into account the ability to control and manage the shares, the source and purpose of the pertinent provision, etc.

(2) In full view of the above evidence and evidence as well as evidence A, evidence A, and evidence Nos. 1 to 3 (including each number), Eul 5 to 12, and 14, the following facts are acknowledged.

㈎ 참가인은 원고에게 이 사건 주식 취득자금 외에도 2014. 4. 11. 25억 원, 2014. 5. 13. 19억 원, 합계 44억 원을 송금하여 원고가 2014. 4. 14.부터 2014. 5. 13.까지 위 금원으로 이 사건 회사 주식 합계 1,387,990주를 취득하였다. 또한 참가인은 tt의 상무이사인 jjj에게도 mm 및 tt 명의로 합계 25억 원을 송금하여 jjj이 2014. 1. 20.부터 2014. 2. 12.까지 위 금원으로 이 사건 회사 주식 1,758,708주를 취득하였으며, yyy이 2013. 11. 13. 인수한 이 사건 회사 신주인수권증권의 인수자금 603,633,386원 중 307,618,700원도 참가인이 aa 명의로 yyy에게 송금한 금원으로 충당되었다.

㈏ 참가인이 원고에게 2013. 10. 15.부터 2013. 10. 30.까지 본인 및 mm 명의로 송금한 25억 5,000만 원, 2013. 10. 15. 처 aa 명의로 송금한 6억 원, 2014. 4. 11. 송금한 25억 원, 2014. 5. 13. 송금한 19억 원과 관련하여 참가인과 원고 사이에 각 금전소비대차계약서가 작성되어 있고(이자율 연 3~4%), 참가인과 jjj 사이에도 5억원과 각 10억 원에 대하여 각 차용증서가 작성되어 있는데, 원고에게 송금된 25억5,000만 원 및 6억 원에 대한 각 금전소비대차계약서는 위 각 금원 송금 이후에 작성된 것이고, 위 각 금전소비대차계약서와 차용증서에 관하여 공정증서가 작성되었다거나 참가인에게 담보가 제공된 바 없다.

㈐ 원고는 2014. 4. 4. 이 사건 회사를 상대로 수원지방법원 2014가합 호로 이 사건 회사의 2014. 3. 28.자 정기주주총회결의 취소소송을 제기하면서 이 사건 회사 주식 취득자금의 출처에 관하여 자신의 사업 소득이라거나 tt의 경영 및 노무에 관한 자문을 하여 준 대가로 참가인으로부터 받기로 한 tt의 지분을 현금화한 돈이라고 주장하다가, 위 소송에서 제출된 하나은행 금융거래내역(위 법원의 금융거래정보제출명령에 대한 2014. 7. 31.자 회신자료)에 의하여 참가인의 자금임이 밝혀지자 비로소 참가인으로부터 이 사건 회사 주식취득 자금을 차용한 것이라고 주장하였고, 참가인과 원고는 2014. 6.경 이루어진 금융감독원 조사에서도 위 민사소송 제기 당시와 동일한 취지로 진술하다가 검찰조사 단계에 이르러 비로소 차용금이라고 주장하였다.

㈑ 한편 원고는 이 사건 회사에 대한 경영권 인수와 관련하여 김 법률사무소와 법률자문계약을 체결하였는데, 참가인이 mm 기업은행 계좌에서 김 법률사무소 외환은행 계좌로 2013. 2. 4. 5,000만 원, 2013. 2. 13. 13,456,300원을 각 송금하였고, 2014. 3. 17. mm 기업은행 계좌에서 원고의 국민은행 계좌로 송금한 2억 원이 2014. 3. 17.부터 2014. 3. 26.까지 사이에 위 김 법률사무소 및 이 사건 회사 경영권 인수 관련 컨설팅을 담당한 에이엔지파트너스로 각 송금되는 등 참가인이 경영권 인수 관련 법률자문비용 등을 부담하기도 하였다.

㈒ 참가인은 원고가 이 사건 주식을 취득하기 전인 2013. 9. 23.경부터 2014. 2. 17.

경까지 본인, 처인 aa, tt 명의의 증권 매매거래계좌를 이용하여 이 사건 회사 주식 2,545,556주(발행주식 총수 50,929,817주 대비 4.998%)를 매수하였고, 원고가 취득한 위 주식 수량은 원고, jjj 등이 이@@, 우^^을 통하여 이 사건 회사 기존 경영진에게 경영권 양도를 제안하면서 건네준 '주식매수제안서'에도 기재되어 있었다.

㈓ 참가인은 반도체 장비 제조업체인 tt과 mm을 운영해 온 기업인으로 오래전부터 주식거래를 해 온 반면, 원고는 공인노무사, jjj은 tt의 직원으로 기업을 경영해 본 적이 없을 뿐 아니라 이 사건 회사 주식 취득 이전에 주식거래를 해 본 적이 전혀 없으며, 원고는 참가인을 통해 jjj이 이 사건 회사 주식을 매수한 사실을 알게 되었다.

㈔ 2013년도 이후 3개년도의 원고와 참가인의 소득 내역은 아래와 같다.

(3) The following facts revealed in light of the legal principles as seen earlier, namely, ① the Plaintiff’s share acquisition fund of KRW 10 billion was borne by the Intervenor including the instant shares, ② the Intervenor acquired shares of the instant company under the name of her wife andt, and the volume of the said shares was stated in the “Written Proposal for Purchase of Stocks” delivered to the management of the instant company before the adoption of the Plaintiff and jj, and the Intervenor’s demand for legal advice and consulting regarding the acquisition of the instant company’s management rights was revealed as well as the circumstances in which the Intervenor participated in the Plaintiff’s acquisition of the instant company’s management rights. In light of the Plaintiff’s 70 billion shares acquisition fund of KRW 50,000,000,000,000,000,000 from KRW 70,000,000,000,000,0000,000,0000,000,000 shares were no more than 30,000.

C. Whether there was no purpose of tax avoidance

(1) The legislative intent of Article 45-2(1) of the former Inheritance Tax and Gift Tax Act is to effectively prevent the act of tax avoidance using the title trust system and realize the tax justice. Thus, the application of the proviso to Article 45-2(1) is possible only if the purpose of tax avoidance is not included in the purpose of the title trust, and it cannot be deemed that there exists any intention of tax avoidance. In this case, the burden of proving that there was no purpose of tax avoidance in the title trust, and that there was no purpose of tax avoidance, can be proved by the method of proving that there was no purpose of tax avoidance. However, the title holder who bears the burden of proof has a clear purpose of tax avoidance and that there was no purpose of tax avoidance in the title trust to the extent that it is deemed that there was no purpose of tax avoidance in the title trust, and that there was no tax avoidance in the future at the time of the title trust or there was no objective and conclusive evidence to prove that there was no intention of tax avoidance in the title trust to the extent that it does not have ordinary doubt (see, e.g., Supreme Court Decision 201200Du14Du14, Jun. 214, 27. 2014.

(2) In light of the aforementioned legal principles, the following circumstances can be comprehensively taken into account: (i) the holding of shares cannot necessarily take into account the occurrence of dividend income, regardless of the existence of a corporation’s actual distribution of dividends or the amount of dividends available; (ii) under the current income tax taxation system, dividend income of listed shares is subject to cumulative tax rate of 38% since 2013; and (iii) the Plaintiff was subject to 24% tax rate of 14% on future dividend income by distributing shares; (iv) the Plaintiff’s acquisition of shares was made through cash dividend of 15 won per share in 2016; and (v) the Plaintiff’s assertion that the Plaintiff was subject to capital gains tax exemption for the purpose of imposing capital gains tax under Article 94(1)3 (a) of the former Income Tax Act (amended by Act No. 12169, Jan. 1, 2014); and (v) the Plaintiff’s allegation that the Plaintiff’s transfer of shares was subject to capital gains tax exemption under the Presidential Decree.

5. Conclusion

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