Where part of the land attached to a building is transferred, the method of determining whether it falls under the special long-term holding deduction.

Where the land attached to a building is not wholly transferred and the part of which is not a building is transferred (where part of the land attached to the building is transferred, because it is a parcel of land or more, and part of the land is transferred in installments or is not related thereto) the land area of the part not transferred is equal to the area subject to the special long-term holding deduction or the whole land transferred in excess thereof exceeds the subject matter of the special long-term holding deduction, the transferred land shall be excluded from the subject matter of the special long-term holding deduction. The land area of the part not transferred is included in the subject matter of the special long-term holding deduction, and part of the transferred land exceeds the subject matter of the special long-term holding deduction, the special long-term holding deduction shall be limited to the part included in the subject matter of the special long-term holding deduction

Article 23 (2) 2 of the former Income Tax Act (amended by Act No. 4803 of Dec. 22, 1994) (see Article 95 (2) of the current Income Tax Act), Article 46-3 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 14467 of Dec. 31, 1994)

[Judgment of the court below]

Head of Nam Busan District Tax Office

Busan High Court Decision 95Gu801 delivered on June 29, 1995

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

As to the Grounds of Appeal

Article 23 (2) 2 of the Income Tax Act provides that the transfer income amount at the time of transfer of land (excluding land determined by the Presidential Decree) or a building means the amount calculated by subtracting the amount equivalent to 10/100 of transfer margin if the holding period is between five and ten years. Article 46-3 of the Enforcement Decree of the same Act provides that the land stipulated by the Presidential Decree as referred to in Article 23 (2) 2 of the same Act means the land annexed to the building site and the building, which exceeds the area calculated by multiplying the ratio (five times of the land within the urban planning zone, and ten times of the land outside the urban planning zone) under Article 15 (9) by the floor area of the building, and the special long-term holding deduction of the part which is not owned (limited to two or more parcels of land annexed to the building, and part of which is transferred or part of which is not transferred, or part of which exceeds the special long-term holding deduction of the part which is to be transferred in excess of the area subject to the special long-term holding.)

The judgment of the court below to the same purport is just and there is no error in the misapprehension of legal principles, such as the theory of lawsuit.

Therefore, the appeal is dismissed and the costs of appeal are assessed against the losing plaintiff. It is so decided as per Disposition by the assent of all participating Justices.

Justices Kim Jong-sik (Presiding Justice)