Standard time for determining whether it falls under the proviso to Article 29-4 (2) of the Inheritance Tax Act.

Article 29-4(2) of the Inheritance Tax Act intends to prevent evasion of the gift tax which is convenient for onerous donation between the spouse or lineal ascendants and thus, in case of onerous donation between the spouse or lineal ascendants, the obligation of the donor taken over by the donee falls under the proviso of the same Article, and it shall be determined at the time of the relevant donation as of the time of the relevant donation. Thus, barring any special circumstance, the relevant donated property shall not be considered as a property status concerning the ability of the donee for repayment, unless there are special circumstances.

Article 29-4(1) and (2) of the Inheritance Tax Act

Plaintiff 1 and 3 others, Counsel for the plaintiff-appellant

Head of Mapo Tax Office

Seoul High Court Decision 85Gu989 delivered on November 10, 1986

All appeals are dismissed.

Of the litigation costs, the part arising from the appeal by plaintiffs 2, 3, and 4 is assessed against the same plaintiffs, and the part arising from the defendant's appeal is assessed against the defendant.

1. First, we examine the grounds of appeal by Plaintiffs 2, 3, and 4.

Article 29-4 (1) of the Inheritance Tax Act provides for the total amount of donated property at the time of donation as the taxable value of such donated property, and in case of so-called onerous donation, the amount of debts of the donor acquired by the donee from the value of the donated property shall be deducted from the value of the donated property, and such value shall be the taxable value. However, in applying the provisions of paragraph (1), the amount of debts shall not be deducted even in case where the donee takes over the debts of the donor, even if the donee takes over the debts of the donor.

However, the same shall not apply to cases where a donee, who is objectively recognized as capable of repaying his/her obligation in light of occupation, sex, age, income, property status, etc., takes over obligations of the State, local governments, and other financial institutions prescribed by the Presidential Decree, etc. This is intended to prevent the evasion of gift tax which is convenient for onerous donation between his/her spouse or lineal ascendants and descendants. Therefore, in cases of onerous donation between his/her spouse and his/her lineal ascendants and descendants, the donee’s obligation to the donor to whom the donee takes over falls under the above proviso, and whether the donee objectively recognized as capable of repaying it shall be determined at the time of the relevant donation. Thus, barring any special circumstances, the pertinent donated property shall not be considered as property status concerning the ability to repay.

In the opinion of the court below, the above plaintiffs received the obligation to return the lease deposit of the real estate of this case, such as the amount of the judgment of the above non-party's non-party 1 as the donation of the real estate of this case from the non-party 1, who is the father of the above plaintiffs, but at that time, they set the age between 22 and 16, and have no certain occupation or income, etc., lawful and legally confirmed the fact at the time, and in light of the correction as above at the time of the donation of this case, it is not objectively recognized the ability to repay the above acquisition obligation except for the real estate of this case, which was donated to the same non-party's lineal descendant of the above non-party, and the above non-party's obligation which the above plaintiffs accepted does not fall under any of the obligations provided for in the proviso of Article 29-4 (2) of the Inheritance Tax Act, and therefore, it is just and persuasive that the judgment of the court below is not acceptable. In conclusion, we cannot accept the conclusion of the judgment.

2. Next, we examine the defendant's grounds for appeal.

Upon examination of relevant evidence, there is no evidence that the court below recognized that Plaintiff 1 acquired 17,00,000 won from the above non-party, who was the Mayor's father, the obligation to refund the deposit money of the real estate of this case, and that Plaintiff 2, Plaintiff 3, and Plaintiff 4 donated money equivalent to the acquisition tax, etc. of the real estate of this case from the above non-party. On the other hand, according to the evidence of the judgment, for the same plaintiffs as the relation to the donation of the real estate, etc. of which the above decision was given, the non-party 2, who is the management of the real estate of this case, decided to repay the money with the lease income of this case for the same plaintiffs as the relation to the donation of the real estate of this case where the above acquisition tax, etc. was paid, and there is no error of law of misconception of facts or incomplete deliberation due to the violation of the rules of evidence, such as the theory of lawsuit, and it cannot be accepted. Ultimately, we cannot accept the judgment below's conclusion.

3. Therefore, all appeals are dismissed, and the costs of appeal are assessed against each losing party. It is so decided as per Disposition by the assent of all participating judges.

Justices Choi Jae-ho (Presiding Justice)