No disposition of replotting, etc. shall be deemed a transfer of general real estate development projects, which have been issued a building permit or approval for use under the Building Act.

Pursuant to Article 88 (2) of the former Income Tax Act, where a land category or lot number is changed due to a disposition of replotting under the Urban Development Act or other Acts, or a disposition of replotting by a disposition of building permission and approval for use under the Building Act is not deemed a disposition of replotting under the general Building Act.

Article 88 (2) of the Income Tax Act

2018Gudan6083

KimA

BB Director of the Tax Office

June 27, 2018

July 18, 2018

1. The plaintiff's claim is dismissed.

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

The imposition of capital gains tax of KRW 00,000,000 (including additional tax) for the year 2011 on April 1, 2017 by the defendant of the Gu office against the plaintiff on April 1, 2017 is revoked.

1. Details of the disposition;

A. The Plaintiff owned 18.99/1,213 shares (hereinafter referred to as the “instant land shares”) among the Gu △△dong in Seoul 】 △△△-dong 】 】 】 】 】 】 】 】 16 shares of 1,214 square meters (hereinafter referred to as the “instant land shares”) and 214-A (hereinafter referred to as the “instant previous apartment”) and 16 shares of the above ground apartment.

B. On July 22, 2006, in order to implement the new construction project of DD Co., Ltd. (hereinafter referred to as 'CC') a new project (hereinafter referred to as the "new construction project of this case") on the land of this case, CC Co., Ltd. entered into an implementation contract with the Plaintiff (hereinafter referred to as 'the contract of this case', and 'the charges of Article 4(1)' as 'the charges of this case') with CC Co., Ltd. (hereinafter referred to as 'CC Co., Ltd.). On Apr. 2, 2007, the Plaintiff entered into a contract with CC Co., EE Real Estate Trust (hereinafter referred to as 'EE Real Estate Trust') with the following terms and conditions as 'the trust contract of this case', and on Apr. 6, 2007, 'the trust registration of this case' was completed on Apr. 2, 2007.

D. The previous apartment of this case was removed on August 30, 2007.

E. On December 5, 2007, the Plaintiff entered into a sales contract with EE real estate trust, and EE real estate trust, as the owner of the instant land, completed the registration of initial ownership on February 14, 201, after completing the new construction of the instant apartment on the land of the same 147-29 land.

F. On April 29, 201, the Plaintiff completed the registration of ownership transfer with respect to the apartment of No. 102-2203 of the 22th floor among the instant apartment from the EE real estate trust on the ground of sale and purchase as of December 5, 2007, on the ground that the Plaintiff completed the registration of ownership transfer with respect to the apartment of No. 102-2203 of the 22nd floor among the instant apartment of this case (hereinafter “instant multiple apartment”).

G. The Defendant: (a) deemed that the Plaintiff transferred the instant land shares on or around February 14, 201 under the instant contract; and (b) accordingly, notified the Plaintiff of KRW 00,000,000 for the transfer income tax reverted to year 201 (hereinafter “instant disposition”).

H. The Plaintiff appealed and filed a request for review on June 23, 2017, but was dismissed on September 28, 2017.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) On July 3, 2004, the Plaintiff in Chapter 1 owned for more than three years until August 30, 2007, when acquiring and destroying the instant previous apartment, and resided in the instant previous apartment for more than two years. As such, the income accrued from the transfer of the instant previous apartment and the instant land shares is exempt from taxation in accordance with the special case of one house for one household under Article 89(1) of the Income Tax Act. Therefore, the instant disposition is unlawful.

2) The transfer time of the instant land share in Chapter 2 is not February 14, 201 when the registration of ownership preservation was completed under the name of EE real estate trust, but rather on December 5, 2007, when the registration of the instant trust was completed on April 6, 2007 or the date of conclusion of the sale contract, which is the date of the conclusion of the contract for sale. As such, the instant disposition based on the premise that the pertinent year to which the transfer income from the transfer of the instant land belongs is illegal, unlike the actual year to which it belongs.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination as to the First Claim

1) According to Article 89(1)3 of the former Income Tax Act (amended by Act No. 11146, Jan. 1, 2012; hereinafter “ Income Tax Act”), income from the transfer of one house for one household as prescribed by the Presidential Decree and the appurtenant land within the area calculated by multiplying the area of the land on which the building is built by the ratio prescribed by the Presidential Decree by the area (hereafter referred to as “land annexed to a house” in this Article) shall not be subject to income tax, and the transfer of assets under the Income Tax Act refers to the transfer of assets to “oil.”

Unless there are special circumstances, the taxpayer bears the burden of proof as to the fact that one house for one household and the land annexed thereto meet the non-taxation requirements of the transfer income tax (see, e.g., Supreme Court Decision 2005Du8443, Dec. 23, 2005), and whether it constitutes one house for one household and the land annexed thereto shall be determined at the time of transfer (see, e.g., Supreme Court Decision 95Nu7383, Aug. 22, 1995). The Plaintiff’s transfer of the instant land shares to EE Real Estate Trust as the transfer of the land shares under Article 89(1)3 of the Income Tax Act. According to the above facts, the Plaintiff’s transfer of the instant land shares to EE Real Estate Trust is not sufficient to recognize the difference between the transfer value of the instant apartment and the transfer value of the instant apartment after entering the transfer of the instant land shares in consideration of the fact that the Plaintiff could not be seen as having concluded the transfer of the instant apartment after the transfer of the previous apartment.

2) Meanwhile, according to Article 154(1) and (2) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 22950, Jun. 3, 201; hereinafter “Enforcement Decree of the Income Tax Act”), one house for one household prescribed by Presidential Decree under Article 89(1)3 (a) of the Income Tax Act means that one household (hereinafter “one household”) comprised of a resident and his/her spouse together with his/her family members living together with the same resident at the same address or same place of residence as of the transfer date, has one house in Korea as of the transfer date, and the holding period of the relevant house is two years (three years in the case of the resident falling under subparagraph 2 of paragraph (8)) (three years in the case of the resident falling under subparagraph 2) or more. However, if his/her spouse dies or divorced, (3) his/her previous apartment house is owned by him/her at least the minimum cost of living under Article 2 subparag. 6 of the National Basic Living Security Act, and thus, the Plaintiff cannot be acknowledged as the previous apartment house for 15 months.

Therefore, the Chapter 1 does not seem to be any mother and there is no reason to do so.

D. Determination as to the second proposal

1) In light of the following circumstances revealed by adding the aforementioned facts and the purport of the entire pleadings, it is reasonable to deem that the Plaintiff transferred the instant land share in accordance with the instant contract at a price equivalent to the amount obtained by deducting the instant shares from the sale price of the instant several apartment units, in return for the payment.

A) The instant apartment building construction project is a general real estate development project for which a building permit and approval for use was issued pursuant to the Building Act. For the said project, the Plaintiff entered into the instant contract individually according to the intent ofCCC and free will, accordingly, the Plaintiff provided the instant land shares and purchased the instant several apartment units, and there is no ground to regard the said series of procedures as having been conducted due to a replotting disposition under the Urban Development Act and other Acts as stipulated in Article 88(2) of the Income Tax Act.

B) The contents of the instant contract provide the instant land shares for the new construction of the instant apartment, and as a result, sell the instant several apartment units, and settle the difference between the appraised value of the instant land shares and the selling price of the instant several apartment units. In this case, the Plaintiff’s share in the instant land is the Plaintiff’s share in the instant land, and the Plaintiff’s ownership in the instant several apartment units is the right to the site of the instant apartment unit, which is an apartment building, as a constituent element of the instant apartment unit. In other words, the instant land share is an independent right from the ground building, but the site ownership is all the rights that are not separate from the aggregate building. Even for the same purpose of land, since each right is entirely different from the legal nature, it is difficult to view that the Plaintiff newly constructed a several apartment unit on its ground while maintaining part of the instant

C) The instant charges, which the Plaintiff provided the instant land shares and settled after being sold in lots, are the amount calculated by subtracting the sales value equivalent to the area of payment in lots, multiplied by 4.64 per square meter from the sale price of the instant several apartment units. The method of settlement is for the sake of convenience in settlement by calculating the value of the instant land shares offered by the Plaintiff and the value of the instant several apartment units sold by the Plaintiff according to their respective calculation methods, and by allowing the Plaintiff to pay only the difference finally. It is premised on the payment of the value of the instant land shares and the value of the instant several apartment units, among the instant land shares, on the premise that the instant land shares are paid the value of the instant land shares and the ownership of the instant several apartment units. It cannot be deemed that there was no transaction, or that there was no payment for the said part.

2) In light of the following circumstances, it is reasonable to view that the time of the transfer of the instant land shares is February 14, 201, in addition to the purport of the entire pleadings and evidence as seen earlier. (A) The Plaintiff agreed to transfer the instant land shares to the owner for the instant new construction project according to the instant contract, and up to the completion of the instant new construction project, the instant land shares were entrusted to EE real estate trust. By completing the instant trust registration within the meaning of reservation in accordance with the instant trust agreement, the trustee and the owner of the instant new construction project were the subject of separate legal status in principle, and the same corporation (EE real estate trust) became the owner and the trustee.

B) According to the instant trust agreement, the Plaintiff, the truster, under the instant trust agreement, unilaterally prevents the termination of the trust agreement. However, the trust agreement may be terminated for a certain reason under the contract, and where the trust agreement is terminated, or where the purpose of the business is not attained or is impossible to achieve (Article 25 of the Trust Contract). In such cases, the trust registration of the trust real estate shall be cancelled, the ownership transfer registration shall be completed against the buyer, and the trust property shall be transferred to the beneficiary as in the present state (Article 26 Subparag. 1 of the Trust Contract). In other words, the trust agreement is scheduled to terminate, and the trustee shall return the trust property to the buyer, beneficiary, etc., not to acquire

C) The price for the transfer of the instant land shares is that the Plaintiff purchased the instant several apartment units. The Plaintiff was in a state of not being paid for the purchase of the instant apartment units until the instant new construction project is completed and the instant apartment registration is completed in accordance with the sales contract. The process was completed under the instant trust agreement and trust registration. The Plaintiff did not receive the price for the instant land shares or agreed to pay the price for the instant land shares. In other words, when the instant trust registration was made, the settlement of the price for the instant land shares was not made at all.

D) The purpose of the instant new construction project is achieved, and the Plaintiff completed the registration of the instant apartment, there was a need to prepare a method of guaranteeing payment for consideration until the Plaintiff completed the registration of the instant apartment. On the contrary, from the perspective of the owner of the instant new construction project, even if the Plaintiffs failed to obtain full ownership of the instant land shares during the process of performing the instant new construction project, there was a need to restrict the Plaintiffs from disposing of the instant land shares in mind to a third party. Such bilateral necessity appears to have completed the instant trust registration in order to restrict the use, profit-making, and disposal of the instant land shares within the scope of its purpose. Since the Plaintiff did not have actually received the price for the instant land shares, the instant trust registration was not made for the purpose of guaranteeing the return of the

E) Although there is an expression "the substitute repayment area" under the contract of this case, it merely appears that the price received by the plaintiff in response to the share of the land of this case means the price converted into the area of the unit apartment of this case, and it does not mean that the actual payment is made. The registration of preservation of ownership of this case cannot be viewed as the payment in lieu of the plaintiff, but the fact that the transfer of ownership in this case has been actually completed with the registration of preservation of ownership of the plaintiff's share of land of this case does not change

3) Sub-decisions

Therefore, the second proposal by the plaintiff is without merit.

3. Conclusion

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