Gwangju District Court 2009Guhap3644 (2010.05)

early 2007 Mine4062 (Law No. 21, 2009)

Inheritance tax payable upon permission for payment in kind shall be computed on the basis of data such as the scope and value of inherited property.

Unless a disposition imposing inheritance tax is revoked, the amount of inheritance tax paid on the value of real estate and securities among the inherited property shall be calculated based on data such as the scope and value of the inherited property recognized in the disposition imposing inheritance tax.

2013Nu795 Revocation of Disposition of Permission for Payment in Kind of Inheritance Tax

KimAAAA

The director of Gwangju Tax Office

Gwangju District Court Decision 2009Guhap3644 Decided February 5, 2010

May 30, 2013

June 27, 2013

1. Revocation of a judgment of the first instance;

2. The plaintiff's claim is dismissed.

3. All costs of the lawsuit shall be borne by the Plaintiff.

1. Purport of claim

The defendant's disposition of non-permission to pay in kind the inheritance tax in attached Form 1 against the plaintiff on October 1, 2007 shall be revoked.

2. Purport of appeal

It is the same as the disposition.

1. Details of the disposition;

A. The plaintiff is the child of the deceased KimBB (hereinafter referred to as "the deceased"), and the deceased died on October 4, 2006, and inherited property together with the deceased's wife, KimDD, KimE, and KimF, and the heir including the plaintiff filed a voluntary report to the defendant on February 9, 2007, on the taxable value of KRW 000, tax base of KRW 000, and tax amount of KRW 000,000.

B. On February 9, 2007, the Plaintiff filed an application for payment in kind with the payment of KRW 000,000, which is part of the inheritance tax reported above to the Defendant, in cash, and with the remainder of the inheritance tax as non-listed stocks issued by the EE Unemployment Co., Ltd. (hereinafter “instant non-listed stocks”) 287 and 601 share (the assessed value per share, KRW 000, in total, KRW 000).

C. Around July 2007, the Defendant made an inheritance tax investigation based on the Plaintiff’s above declaration, and the value of the inherited property is 000 won, and the value of the real estate and the securities among them is 000 won (=real estate 000 won + securities 000 won). The Defendant calculated the above voluntary declaration tax amount from the calculated tax amount of 000 won, deducted the above voluntary declaration tax amount of 000 won, and calculated the additional tax amount of 000 won as additional tax, and notified the net KimB’s inheritor including the Plaintiff.

D. On the other hand, on July 30, 2007, the defendant demanded to change the property subject to the permission for payment in kind into the preferential payment in kind, and on August 17, 2007, the plaintiff changed the property subject to the permission for payment in kind into the land (total appraised value of KRW 000,000, total appraised value of KRW 000, total appraised value of KRW 000) on five lots outside 00,324 square meters in Changyang-gun, Yangyang-gun, Yangyang-gun, and the non-listed stocks in this case, and KRW 270,302.

E. The defendant, on October 1, 2007, applied for payment in kind under Article 73 of the former Inheritance Tax and Gift Tax Act (amended by Act No. 8139 of Dec. 30, 2006, hereinafter referred to as "Inheritance Tax and Gift Tax Act") and Article 73 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 19899 of Feb. 28, 2007), on the ground that the scope of permission for payment in kind (the amount of inheritance tax paid on the value of real estate and securities) is only 00 won, for the non-listed stocks of this case 270,302 and 144,505 shares (one assessment value per share, 000 won, and 00 won), and 30,000,000,000 won for non-listed stocks and 30,000,0000 won for non-listed stocks, and the defendant reported the payment in kind to the heir, 27005,701.7

G. On October 15, 2007, the Plaintiff appealed and filed a tax appeal with the Tax Tribunal, and as a result of the decision of the Tax Tribunal, additional payment was permitted for the instant 367 unlisted stocks (00 won received) (hereinafter referred to as “the Defendant’s refusal of the instant disposition on October 1, 2007 against the Defendant’s non-listed stocks 125,797 shares (hereinafter referred to as “the instant non-permission disposition”).

[Reasons for Recognition] The non-satched Facts, Gap 1 through 4, 7, and 8, and Gap 5-1 and 5-2, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The parties' assertion

1) The Plaintiff, and Article 73(1) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act, which are the grounds for the refusal of payment by the Defendant, are invalid because the scope of payment by kind is limited without delegation by the mother law, and it is contrary to the purport of the provision of Article 73 of the Inheritance Tax and Gift Tax Act or goes beyond the scope of delegation, and even if the above provision is valid, as in the case of this case, where there is no other inherited property which is to pay inheritance tax because it is realized because there is no inherited property with property value other than the non-listed shares, the payment by kind should be permitted without restriction of the amount of tax payable under Article 73(1) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act in accordance with Article 73(2) of the Enforcement Decree of the

2) On this issue, the Defendant asserts that Article 73(1) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act, which is the basis of the non-permission of the instant case, is a lawful and effective provision within the scope of delegation of the Inheritance Tax and Gift Tax Act, and that Article 73(2) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act is not applicable to the instant non-listed stocks which are non-permission of payment in kind, because they are possible to be divided, and that the instant non-permission of the instant case is a legitimate disposition taken within the scope of discretionary authority

B. Relevant statutes

Attached Form 2 shall be as listed in attached Table 2.

(c) The effects of the Enforcement Decree of the Inheritance Tax and Gift Tax Act restricting the payment in kind.

1) The main sentence of Article 73(1) of the Inheritance Tax and Gift Tax Act (hereinafter referred to as the “instant provision”) provides that in case where the value of real estate and securities among inherited property exceeds 1/2 of the value of the relevant property and the amount of the inheritance tax payable exceeds 10 million won, the head of the tax office having jurisdiction over the place of tax payment may allow the payment in kind only for the relevant real estate and securities upon application of the taxpayer under the conditions as prescribed by the Presidential Decree, and Article 73(1) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act provides that the amount of tax payable that may be requested for payment in kind under Article 73 of the Act shall not exceed the amount of the inheritance

2) Article 73(1) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act provides that the limit of the amount of tax payable for the above payment in kind is limited to "the amount of inheritance tax payable for the value of real estate and securities which are inherited property" without delegation by the law, or it is contrary to the purport of the provision of this case, and it is invalid because it goes beyond the scope of delegation by the law of this case, and first, the provision of this case provides that the method and procedure of application for payment in kind as well as matters concerning permission of payment in kind shall be delegated to the Enforcement Decree of the Inheritance Tax and Gift Tax Act. In other words, Article 73(1) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act provides the limit of the amount of tax payable for the payment in kind, i.e., the limit of the amount of tax payable for the payment in kind which the taxpayer is entitled to request the payment in kind is based on delegation by the provisions of this case, and the provision of this case provides that the amount of tax payable for the payment in kind is limited to the value of movable property and securities, and securities, and it is not permitted.

3) Therefore, the Plaintiff’s assertion that Article 73(1) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act is invalid is without merit.

(d) Scope of application under Article 73 (12) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act;

1) Article 73(2) of the Enforcement Decree provides that "If there is no value equivalent to the payment of the tax amount under paragraph (1) of this Article among the real estate and securities which are inherited property, the head of a tax office may allow the payment in kind for the tax amount in excess of the tax amount to be paid, notwithstanding the provisions of

2) The plaintiff, the plaintiff and his co-inheritors, who are not allowed to pay any remaining inheritance tax other than the non-listed shares in this case, and it is difficult to find ways to liquidate the non-listed shares in this case, and the plaintiff and their co-inheritors should permit the payment of the non-listed shares in excess of the limit provided for in Article 73(1) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act pursuant to Article 73(2) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act. The purport of Article 73(2) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act is to prevent inherited property which is allowed to pay in kind, but it is not possible to pay in kind in accordance with the payable tax amount that can be claimed for payment in kind under Article 73(1) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act, and to prevent the payment of the non-listed shares from being made in kind in excess of the limit of the payable tax amount under Article 73(1) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act.

3) In the case of non-listed stocks of a corporation whose main business is real estate rental business and substantial assets are limited to the building for lease, the entire stocks are traded in whole, and only part of them are not to properly reflect the value of equity shares, and if payment in kind is permitted only for part, the economic value of the remaining part can not be maintained at the remaining rate. In light of this, since the non-listed stocks in this case cannot be economically divided, the whole of the non-listed stocks in this case should be considered as one property and the payment in kind should be permitted in excess of the prescribed limit under Article 73(2) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act. Since the tax payment system is recognized as an exception to the principle of cash payment in this case, it is desirable to determine the allowable scope of payment in kind in consideration of equity in tax burden between the person who pays in money and the person who intends to pay in kind, and since the non-listed stocks for which payment in kind can be made in one share can not be considered as being paid in accordance with Article 73(2) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act.

E. The permitted value of payment in kind by the unlisted stocks of this case

1) The plaintiff, even though he could claim payment in kind to the extent of the value of real estate and securities which are the inherited property concerned, and in this case, the tax amount payable on the real estate and securities which are the value of the inherited property concerned is 000 won (=0000 won x 50% inheritance tax rate). Thus, the non-permission disposition of this case which allowed payment in kind which falls short of the above amount is unlawful.

2) In the calculation of inheritance tax, considering the tax base by taking into account non-taxation, spouse deduction, lump sum deduction, etc., and the tax amount to be paid in kind is the amount calculated by multiplying the value of the real estate and securities that are the inherited property by the inheritance tax rate, and it is unfair to calculate by multiplying the value of the real estate and securities.

3) According to Gap evidence No. 8, the inheritance tax tax amount paid on the value of the real estate and securities among the inherited property in this case, which is the limit of permission for payment in kind, is calculated as KRW 000 as shown below, and the value of the real estate and securities already permitted by the defendant to pay in kind exceeds the limit of permission for payment in kind as stated above (=00 won +00 won +000 won +000 won). Furthermore, the plaintiff's assertion that payment in kind in accordance with the shares listed in attached Form No. 1 should be permitted is without merit, and the non-permission disposition in this case is legitimate.

4) As to the above "value of the total inherited property" and "amount of the inheritance tax on the value of the real estate and securities which are the inherited property", the plaintiff, as to the "value of the inherited property" and "amount of the inheritance tax on the value of the total inherited property", and the "amount of the inheritance tax on the value of the property subject to the inheritance tax taxation, some of the real estate and non-listed stocks of this case are not valuable, and each loan to EE Unemployment and OOland are unable to be recovered, and the amount of the waiver of the claim against OOO reporter is provided for the rehabilitation of local corporations by fulfilling social responsibilities as an enterprise, and the deposit is in real value because the pledge is established, so it seems that the above value of the inherited property and the calculation of the amount of the inheritance tax and the limit of the limit of the permission for payment in kind on the basis thereof are unfair. However, as seen above, the defendant's assertion on July 207, 207 that the amount of the tax to be paid in kind should not be corrected from the above amount of the inheritance tax should be calculated.

3. Conclusion

If so, the plaintiff's request is without merit, and the judgment of the court of first instance is unfair with different conclusions, and the judgment of the court of first instance is revoked, and the plaintiff's request is dismissed, and it is so decided as per Disposition.