If a corporation refuses to transfer ownership of real estate purchased by the corporation to a corporation due to the transfer income tax relationship and title trust is made to its accounting staff (negative)

If the transferor refuses to transfer the registration to the actual owner or is unable to transfer the registration to the actual owner in the future due to the circumstances that make it impossible to transfer the registration to the actual owner in the future or any other similar circumstances, it shall not be deemed a donation, unless the transferor intends to avoid the gift tax by concealing the title of registration from the actual owner, and if the corporation purchased the real estate with the company’s funds, but the seller refuses to transfer the ownership to the corporation due to the large amount of the transfer income tax, and thus, if the corporation has completed the registration of title transfer to the Plaintiff, who is an accounting officer of the above company, as the seller refuses to transfer the ownership to the corporation, it is obvious that the company, the actual owner, made

Article 32-2 of the Inheritance Tax Act

Supreme Court Decision 90Nu4143 delivered on October 10, 1990; 90Nu240 delivered on November 13, 1990; 90Nu2321 delivered on November 23, 1990; 91Nu278 delivered on March 27, 1991 (Dong)

Kim Jong-jin, Attorney Jeon Jong-gu, Counsel for defendant-appellant

The director of the tax office

Gwangju High Court Decision 89Gu1185 delivered on November 6, 1990

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

The grounds of appeal by the defendant litigant are examined.

Article 32-2 of the former Inheritance Tax Act (amended by Act No. 3474 of Dec. 31, 1990; hereinafter the same) provides that if the actual owner and the registered titleholder are different, the actual owner shall be deemed to have donated the property to the registered titleholder on the date of transfer of the registration, the purpose of legislation is to prevent the abuse of the title trust system as a means to conceal a gift with respect to the property that requires registration, etc. for the transfer or exercise of the right, since the purport of legislation is to prevent the transfer of the right, the change of the registered name is not intended to avoid gift by concealing the gift, but rather, if the transferor refuses the transfer of the registration to the actual owner, or if there is any circumstance under which the transfer of the registration cannot be made in the future of the actual owner or due to other similar inevitable circumstances (see, e.g., Supreme Court Decisions 90Nu4143, Oct. 10, 190; 90Nu240, Nov. 13, 1990).

According to the facts acknowledged by the court below, although the non-party 1, a corporation, purchased the site and building of this case at its own expense, the seller refuses to transfer the ownership to the corporation because it is inevitable to refuse the seller's transfer income tax, and therefore, the registration of ownership transfer was made under the name of the plaintiff by deciding to title trust to the plaintiff, who is an accounting officer of the above company. However, if there is such circumstance, it is apparent that the above non-party company, the actual owner, did not want to avoid gift tax. Thus, in the case of a title trust which is not aimed at tax avoidance, the provision on deemed donation under Article 32-2 of the former Inheritance Tax Act cannot be applied to the above case of a title trust

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.

Justices Song Man-man (Presiding Justice)