Whether it is a gift to which the forfeited stocks are allocated from a person claiming as a shareholder under the name.

In the administrative appeals phase, only the assertion on the method of market price assessment, appropriateness of the acquisition value, and legitimacy of the procedure for acceptance of new shares was filed, and the title trust claim was filed in the instant lawsuit, and the financial evidence on the payment of stock price was not presented, so it cannot be deemed that the title trust was made.

Article 35 of the Inheritance Tax and Gift Tax Act as deemed donation at the time of transfer at low price or high price

The appeal is dismissed.

The costs of appeal are assessed against the Plaintiff.

The grounds of appeal are examined.

The court below, citing the reasoning of the judgment of the court of first instance, acknowledged the circumstances of the instant disposition, and rejected the Plaintiff’s assertion that the Plaintiff’s submission of the evidence alone is insufficient to acknowledge the fact of title trust of the instant shares, on the grounds as stated in its reasoning, since the Plaintiff’s following assertion, namely, the Plaintiff’s shares issued to ○○○○○ was entirely reverted to the Plaintiff, and part of the shares was merely nominal trust due to the need for the establishment of a company, and thus, cannot be deemed as a gift to cancel such title trust and received a refund of the relevant shares or to receive new shares allocated in the form of forfeited stocks at the time of capital increase with consideration

The argument in the grounds of appeal as to this point is without merit due to the selection of evidence and fact-finding which belong to the exclusive jurisdiction of the court below, and it is not acceptable to accept the judgment below, and there is no reason to violate the rules of evidence or deviate from the inherent limits of the free evaluation

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

[Seoul High Court Decision 2007Nu22162, April 24, 2008]

1. The plaintiff's appeal is dismissed.

2. The costs of appeal shall be borne by the Plaintiff.

The judgment of the first instance shall be revoked. The defendant's disposition of imposing gift tax of KRW 65,823,800 on December 5, 2005 against the plaintiff (the defendant appears to have written complaint on December 7, 2005) and the total of KRW 49,994,000 on December 7, 2005 and KRW 15,829,80 on December 7, 2005 shall be revoked.

1. A cited part;

This court's reasoning is as follows, except for deletion or modification, and therefore it is identical to the entry of the reasoning of the judgment of the court of first instance. Thus, it is also accepted by Article 8 (2) of the Administrative Litigation Act and Article 420 of the Civil Procedure

(a) Deleted.

B. On December 5, 2005, the first instance court changed the part of the second instance judgment No. 16-18 to “the Plaintiff is deemed to have received benefits calculated pursuant to Articles 26(3) and 29(3) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act (the portion for which the Plaintiff acquired forfeited stocks of ○○○○○), which was the sum of KRW 65,829,800 (the portion for which the Plaintiff acquired and notified ○○○○○○’s forfeited stocks) and the sum of KRW 65,823,800 on December 15, 2005 (the portion for which the Plaintiff acquired and transferred ○○○○, and the portion for which the Plaintiff acquired forfeited stocks of ○○○○○○○, and the portion for which the Plaintiff acquired forfeited stocks).”

(c) Change of 13 pages 4 of the first instance judgment into 22;

D. Along with the judgment of the court of first instance, the 4th 21st "financial data on the acquisition fund of shares" was changed to "the objective data on the source of the above acquisition fund, including the entry and withdrawal financial data on the acquisition fund of shares, including shares."

2. Conclusion

Therefore, the judgment of the court of first instance is legitimate, and the plaintiff's appeal is dismissed as it is without merit. It is so decided as per Disposition.

[Korean District Court Decision 2006Guhap4702, 2007.24]

1. The plaintiff's claim is dismissed.

2. Litigation costs shall be borne by the plaintiff.

The Defendant’s imposition of gift tax of KRW 65,823,80 against the Plaintiff on December 7, 2005 shall be revoked.

1. In the case of disposition:

A. The Plaintiff acquired the shares of ○○ City ○○○○-dong 142-121, Inc. (hereinafter “○○-ro”) as follows.

(1) On January 29, 200, the acquisition by transfer of KRW 20,000 (price 5.000 per share) from his knife knife knife knife knife knife knife knife

② On June 23, 2003, when capital increase with new shares issued on June 20, 2000 (the issuance of new shares is KRW 5,000), one six thousand shares per forfeited share due to the waiver of the preemptive rights by other shareholders (Gla○, Gim○, Gim○○, and Gung○○), and acquire them, and pay KRW 80,000 for shares (hereinafter referred to as the “instant shares”).

B. On December 7, 2005, the Defendant rendered the instant disposition to the Plaintiff on December 7, 2005, on the following grounds: (a) the legitimate market price of the shares appraised by the supplementary assessment method under Article 63 of the Inheritance Tax and Gift Tax Act (hereinafter “Inheritance Tax and Gift Tax Act”) and Article 53 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act is 37,650 per share; (b) the transfer of shares under Article 35(1)1 of the Inheritance Tax and Gift Tax Act constitutes a case where the Plaintiff takes over shares at a price lower than the market price from a person in a special relationship under Article 35(1)1 of the Inheritance Tax and Gift Tax Act; and (b) the transfer of shares under Article 39(1)1 (a) of the Inheritance Tax and Gift Tax Act constitutes a case where the Plaintiff receives the forfeited shares at a price lower than the market price; and (c) thus, the acquisition cost is deemed to have exceeded the amount equivalent to the acquisition price as the Plaintiff’s donation.

C. On January 18, 2006, the Plaintiff filed an appeal with the National Tax Tribunal, but was dismissed on July 26 of the same year.

Each entry of Gap 1, 2, Eul 1 through 3, and 12 (including each number), and the purport of the whole pleadings (including each number) without any dispute, as well as the whole purport of the pleading.

2. Whether the instant disposition is lawful

(a)the plaintiff's assertion;

The Plaintiff, a substantial manager who established and operated ○○ro, actually owned the Plaintiff’s shares, and only partially title trust was held in order to meet the number of promoters necessary for the incorporation of a stock company. As such, the Plaintiff’s termination of title trust and return of shares from ○○○, or the Plaintiff’s actual shareholder at the time of capital increase by issuing new shares cannot be deemed to be a gift to whom the new shares to be allocated to the Plaintiff in the form of forfeited stocks, and thus, the instant disposition without recognizing the actual ownership relationship of the instant shares was unlawful.

(b) Related statutes;

It is as shown in the attached Form.

(c) Fact of recognition;

(1)○○ is a unlisted company established on December 30, 1996 with capital of KRW 100,000,000 and the total number of outstanding shares as KRW 20,000 (e.g. face value 5,000).

(2) From June 23, 2003 to ○○○○○○, New○, and Kim○○, the Plaintiff is responsible for the representative director on the corporate register of ○○○○○○.

(3)The current status of shareholders (shares) of ○○ro shall be as follows:

(1) At the time of establishment: Title○○ (35%), ○○ Cost (20%), Plaintiff (20%), ○ Sports (10%), ○○○○ (10%), 10%), and Ga○ (5%).

(2) Around December 1999: Around December 12, 1999, Ma○ (25%), Ma○ (20%), Ma○ (20%), Mala○ (15%), Mala○ (15%) and Mada○ (5%).

(3) Around December 2001: Around December 2001, Kim○-○ (60%) (20%) , a size ○○ (20%) , a new ○ (10%) , an gambling ○ (5%) and a regular ○ (5%) .

(4) Around December 2002: Around December 2002, Kim○-○ (70%) (70%), a size of ○○ (20%), ○○ (5%), Ma○ (5%).

⑤ On June 23, 2003: Plaintiff (60%), Kim ○ (35%), Park ○ (2.5%), and fixed ○○ (2.5%).

(d)The Kim○, among shareholders who have waived the preemptive right at the time of capital increase, has been working in ○○ as a production, logistics director, gambling director, director in charge of business operation, and auditor, and on December 26, 2003, ○○ was working in ○○ by the director in charge of business division.

Each entry in Gap (including each number), Gap's 3, 4, 6, Eul's 4, 12 through 15, and 17 (including each number), and the purport of the whole alteration.

D. Determination

As to whether the Plaintiff had held title trust with the other shareholders of the instant shares, each of the statements in Gap's 4 (including the serial number), 9 through 17, and the testimony in Gap's Ga○○ and Kim○○ is insufficient to recognize it, and there is no other evidence to acknowledge it otherwise.

Rather, the following points revealed in the above facts, namely, the shareholders and their shares have changed continuously since the establishment of ○○○○○, Kim○, Park Jong-○, and Jung-○ continued to hold the shares held before and after the increase in the capital only by executives and employees of ○○○○○○○○○, while giving up the preemptive right to new shares held after the increase in the capital. In addition, in the administrative appeals phase, the plaintiff raised a title trust claim in the lawsuit of this case only by asserting the method of evaluation of the market price of shares, the appropriateness of the acquisition value, the legitimacy of the new acquisition procedure, and the legitimacy of the new acquisition procedure. In light of the fact that the plaintiff did not submit all financial data on the fund for the acquisition of shares in the name of ○○○○○, Kim○, Park Jong-○, and Jeong-○, which are alleged to be the actual shares owned by him, the plaintiff's assertion is without merit.

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.