Seoul Administrative Court-2015-Gu Partnership-80932 ( October 27, 2016)

Seocho 2014west 11 (2015.09.07)

A disposition to regard the appraisal value recognized as the market price through consultation with the Evaluation Deliberation Committee as the market price is legitimate.

The Inheritance Tax and Gift Tax Act (as stated in the first instance judgment) provides that when it is deemed that there is no special assessment of price fluctuation within two years between the date of preparation of the appraisal value evaluation statement from the evaluation standard date, it shall be deemed the market price at the market price after consultation with the appraisal evaluation committee, and the defendant has disposed of

Article 60 of the Inheritance Tax and Gift Tax Act:

2016Nu7339 Such revocation of disposition as inheritance tax, etc.

LAA and 3

BB Head of tax office et al.

April 18, 2017

May 16, 2017

1. The plaintiffs' appeal is dismissed.

2. The costs of appeal are assessed against the Plaintiffs.

Cheong-gu Office

The judgment of the first instance court is revoked. The disposition of imposition of gift tax of KRW 8,023,30,834, and KRW 59,424,860 on August 6, 2012, issued by the head of the relevant tax office to Plaintiff LA on August 1, 2013, Plaintiff GD, Park E-E on August 5, 2013, and Plaintiff GF on August 6, 2012, by the head of the relevant tax office, as indicated in the attached Table 1, on inheritance tax of KRW 7,934,506,710, and the head of the relevant tax office of DefendantCC on August 6, 2013, the imposition of KRW 8,023,30,834, and KRW 59,424,860 on October 29, 2012, shall be revoked.

1. Quotation of the reasons for the judgment of the first instance;

The reasoning for the court's explanation on this case is as follows, except for the addition of the following contents to the judgment of the court of first instance, and thus, the court's reasoning is cited in accordance with the main sentence of Article 8 (2) of the Administrative Litigation Act.

2. The addition;

○ On the fourth decision of the first instance court, adding 4 '6' and '4' following '6' and '6' to '6' and 8 '6', '6' and '43' to '11' thereafter.

○ The following shall be added to the 6.5th decision of the first instance court:

[Plaintiffs asserted that, on October 29, 2012, inasmuch as Plaintiff ParkF and Plaintiff ParkD had conflict between the issue of inheritance of property at the time of selling and selling the shares of the instant land and the instant building on October 29, 2012, Plaintiff ParkF did not have any reason to sell the instant land and the instant building shares at a low price to Plaintiff ParkD. However, even if Plaintiff ParkF and Plaintiff ParkD had conflict, such circumstance alone alone cannot be deemed as the market price of the previous gift, which was obtained by borrowing the value of the previous gift, from the parties to the relationship without considering other values, etc.

○ On the 6th judgment of the first instance court, the following shall be added to:

The Plaintiff ParkD states that the assessment period under the proviso of Article 49(1) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act shall be subject to consultation by the Evaluation Review Committee. Thus, the Plaintiff asserted that the imposition of gift tax on October 29, 2012 by the head of the Defendant SS Tax Office without such consultation is procedurally erroneous.

On March 22, 2013, the Director of TT Regional Tax Office: (a) on August 31, 201, the deceased’s GabD on August 21, 201; (b) on February 24, 2013, the deceased’s inheritance, the Plaintiff filed an application for advice on market price recognition; (c) on May 9, 2013, the Evaluation Review Committee: (d) on the instant land and building with the Director of Telecommunication Regional Tax Office, the instant appraisal value was based on objective and reasonable appraisal conducted within two years before the assessment base date of the said gift and inheritance, and (d) on the price of the said gift and inheritance, it is reasonable to view it as the market price of the said gift and inheritance as the Plaintiff’s market price for the said 20-day gift and inheritance from the date of the appraisal report to the date of the 10-year appraisal report, and (e) on the Plaintiff’s 20-year appraisal and assessment of gift taxes from the Plaintiff 1, 201, and 1, 21, Do10.21.

○ The following shall be added to the 6th sentence of the first instance court on the 9th sentence:

The plaintiffs claim that the two-year period stipulated in Article 22 (1) 1 of the instant Directive shall be determined by considering both the date of preparation of an appraisal report and the date of price calculation, and that the above content of the instant Directive is external binding because it provides specific delegation matters under the statutes.

The proviso of Article 49(1) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act provides that, even in cases where an appraisal, etc. is made during the period not falling under the evaluation period, if there are no special circumstances in the situation of price fluctuation during the period from the evaluation standard date to the date on which the appraisal report is prepared, the appraised value may be recognized as the market price after consultation with the evaluation committee, and does not limit a specific period of time to a specific period of time. On the other hand, Article 22(1)1 of the former Enforcement Decree of the same Act provides that, “Where an appraisal is made during the period not exceeding two years before the evaluation base date, where an appraisal is made during the period not exceeding two years before the evaluation base date, and there is no special circumstance in the price fluctuation during the period from the date on which the appraisal report and the appraisal report are prepared by the date

However, the purport of calculating the period between the appraisal base date and the appraisal base date in the instant order is to exclude cases where retroactive appraisal is made at the time of inheritance, etc. only after a long period of time after inheritance, etc. occurs after inheritance, etc. In addition, any additional requirement may not be added, without any express provision, to the effect that any further requirement should not be exceeded two years even between the price assessment base date and the appraisal base date. The date of appraisal or the date of preparation of the appraisal report of the instant appraisal value (the date of January 27, 201 and February 7, 201) shall be all within two years from August 31, 201, inheritance on February 21, 201, and sale from February 29, 2012, and each of the above requests by the Plaintiffs for appraisal of gift is not in violation of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act.

○ The following shall be added to the 9th sentence of the first instance court:

Meanwhile, in fact, the plaintiffs raised doubt that the request for advice and consultation (No. 8 and 9-2) made by the Director of TT Regional Tax Office with respect to the submission of the request for advice and consultation to the Evaluation Deliberative Committee (No. 8 and 9-2) was sent by the Defendants during the deliberation process of the instant case, and in that case, the above error had a decisive effect on the opinion of the Evaluation Deliberative Committee, and thus, the procedure for the consultation was unlawful, and accordingly, each of the Defendants' respective inheritance tax and gift tax disposition accordingly is unlawful. However, in the procedure of the Evaluation Deliberative Committee, not only the request for advice of the Director of TT Regional Tax Office, but also each of the appraisal reports on the appraisal value of the instant case, each of the written opinions, additional opinions, and the monthly rent report submitted by the Plaintiffs and the Defendants were submitted (No. 8-1 through 9, No. 9-1 and No. 10-1 through No. 4). Thus, even if there were any errors in the size or unit price as alleged by the Plaintiffs, it is difficult to have any substantial influence the above opinion.

○ No. 10 of the first instance court's decision No. 10 shall be amended by adding the following:

[Plaintiff’s assertion that at the time of inheritance as of August 31, 201 and February 21, 2012, the officially assessed land price of the instant land was not publicly announced (public notice on May 31, 2012). Thus, it cannot be considered in determining the trend of the land price of the instant land. However, in determining the trend of the overall land price of the instant land, it is apparent that the overall land price of the instant land is not necessarily dependent on the data until the said donation and inheritance, and that at the time of sale as of October 29, 2012, the officially assessed land price of the instant land was publicly announced in 2012. In addition, the Plaintiffs asserted to the effect that there was a decline in the overall domestic real estate price of the instant land and the instant building from August 31, 2011 to February 2012. However, the Plaintiffs’ assertion to the effect that there was no obvious decline in the overall individual land price of the instant land and the instant building due to the decline in the overall and objective evidence.

○ In addition to the last page of the 13th decision of the first instance court, the following is added:

The Plaintiffs asserted that the appraisal value of this case is for the revaluation of a corporation’s assets and not for the purpose of paying inheritance tax and gift tax, and thus, should be excluded from the appraisal value under Article 49(1) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act. The purpose of the Assets Revaluation Act is to revaluated assets of corporations, etc. to ensure the rationalization of business management (Article 1). The Assets Revaluation Act provides that the revaluated value shall be based on the market value as of the date of revaluation (Article 7(1) and (2) of the Assets Revaluation Act. In light of the purpose of the Asset Revaluation Act and the method of revaluation, etc., the revaluated value of the corporation’s assets conforms to the principle of valuation under Article 60(1) of the Inheritance Tax and Gift Tax Act, which provides that the value of the property on which inheritance tax or gift tax is levied shall be based on the market value. Thus, it cannot be said that the appraisal value of this case is inappropriate for the payment purpose of inheritance tax and gift

In addition, the plaintiffs also claim that when they share real estate, it is practically difficult to dispose of the pertinent real estate, etc., and thus, they should consider the discount of shares. However, the fact that they share the real estate alone does not necessarily mean that certain discounts should be applied on a uniform basis. Therefore, the above plaintiffs' assertion is groundless.

○ The following shall be added to the 8th sentence of the first instance court on the 14th sentence:

The plaintiffs asserted that the appraisal value of this case was calculated by simply comparing the appraisal cases or transaction cases and the land price, but did not properly revise the specific individual factors in the comparative standard. However, the appraisal value of this case was calculated by the comparison standard place between 945-1 and 1,129.4 square meters in Gangnam-gu Seoul, Gangnam-gu, Seoul, through the revision of time, local factors, individual factors, and other factors. In the case of individual factors, the appraisal corporation and the appraisal corporation of this case calculated individual factors as 1.06 with each of the changes of street conditions, access conditions, environmental conditions, land conditions, administrative conditions, and other conditions. However, in the case of individual factors, the appraisal corporation of this case calculated individual factors as 1.06. The appraisal corporation of this case selected 157-31 large 560 square meters in Seoul as the appraisal line and the other factors were considered as 2.50 square meters in comparison with the other factors. However, the appraisal corporation of this case can not be said to have been calculated as 94-20100 square meters in Seoul, 94.25000.

○ The following shall be added to the first instance court’s 15th sentence. 4th sentence.

(Today, the land of the above evaluation line or transaction cases is adjacent or near the distance intersection, while the land of the 944-1 in the east-dong is changed as far as possible, but is far from the intersection.

○ On the 15th judgment of the first instance court, the following shall be added to the fourth below:

(11) The plaintiffs asserted that the appraisal corporation of this case and one appraisal corporation of this case's land as a complex does not appraise the land in its original form and thus it cannot be deemed a legitimate appraisal. However, Article 49 (1) 2 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act provides that "an appraisal appropriate for the pertinent property" shall be deemed as one parcel unless there are special circumstances where a group of lots of land is indivisible in its use, and it shall be reasonable to investigate the characteristics of the entire land as one parcel, and evaluate the whole at a single price. "In an indivisible relationship for use" means a case where the situation where a group of land is used as land is deemed reasonable in terms of social, economic and administrative aspect, and value formation of the relevant land (see Supreme Court Decision 2005Du1428, May 26, 2005). One appraisal corporation and one appraisal corporation shall be deemed as a legitimate appraisal complex in terms of social, economic and administrative aspect, and it can be deemed reasonable to be evaluated as a legitimate evaluation complex in terms of the value of the relevant land.

3. Conclusion

If so, the judgment of the first instance court is justifiable, and the plaintiffs' appeal is dismissed as it is without merit.