National High Court Decision 2006No4481 (Law No. 29, 2007)

1. That it does not necessarily require that one household share the same household on the basis of resident registration.

In the same address, it seems that it was difficult to transfer the house, and the same household is dealt with. Therefore, it falls under the two houses for one household as of the date of transfer, and thus, it is difficult to apply the non-taxation provisions for one household.

The contents of the decision shall be the same as attached.

Article 89 (Non-Taxable Transfer Income Tax of the Gu)

Article 154 of the Enforcement Decree of the former Income Tax Act (Scope of One House for One Household)

1. The plaintiff's claim is dismissed.

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

The Defendant’s disposition of imposition of KRW 18,511,910 against the Plaintiff on September 8, 2006 shall be revoked.

1. Details of the disposition;

A. On August 17, 198, the Plaintiff acquired and owned ○○○○○○○○○ apartment (hereinafter “instant house”) No. 801, Dong, 1988, Seoul, ○○-dong, ○○○○○○ apartment (hereinafter “○○”). On August 31, 2005, the Plaintiff transferred the instant house to Nonparty Kim○-woo.

B. On August 25, 1999, the Defendant issued the instant disposition that imposed KRW 18,511,910 on the Plaintiff on September 8, 2006, on the following grounds: (a) the Plaintiff’s self-governing ○○○○ (the Plaintiff’s ○○ on January 4, 1968) that constitutes the same household as the Plaintiff (the Plaintiff’s ○○○○-4) acquired and possessed a detached house; and (b) the Plaintiff constitutes two houses for one household; (c) thereby, the Defendant excluded the application of non-taxation provisions on one household; and (d) imposed the Plaintiff KRW 18,51,91,9

[Ground of recognition] Facts without dispute, Gap evidence 1-1-2, Gap evidence 2-2, Gap evidence 3, Gap evidence 5-1 and 2-2, the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

During the period from June 25, 198 to March 26, 2006, excluding the period from July 22, 2005 to March 26, 2006, the Defendant’s disposition of this case was unlawful on the ground that the transfer of the instant house does not constitute the transfer of one house for one household, on the ground that the transfer of the instant house does not constitute the transfer of one house for one household.

(b) Related statutes;

Article 89 (Non-Taxable Transfer Income Tax of the Gu)

Article 154 of the Enforcement Decree of the former Income Tax Act (Scope of One House for One Household)

C. Determination

(1) The term "one household" in the transfer of one house for one household, which is subject to the exemption from capital gains tax, means a group of families comprised by a resident and his/her spouse together with the family members who live together in the same address or same place of residence. The term "family" refers to a lineal ascendant, descendant, and sibling of the resident and his/her spouse, and the person who temporarily leaves his/her original domicile or temporary domicile for school attendance, medical treatment of diseases, situations of work or business [including the person who temporarily leaves his/her original domicile or temporary domicile due to the entrance into a school, medical treatment of diseases, or circumstances of business (amended by Act No. 7837 of Dec. 31, 2005)] Article 89 subparagraph 3 of the former Income Tax Act, Article 154 (1) and (3) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 19254 of Dec. 31, 2005). One household does not necessarily require that they share a household on the resident registration basis, but should be used as the same livelihood through existence in his/her daily life (see Supreme Court Decision 83

(2) Facts of recognition

(A) On June 25, 1988, the Plaintiff was registered as the domicile of the instant house, but on October 10, 2005, the Plaintiff was registered as ○○○○○○○○○○ apartment, 101 Dong 1205. On June 25, 1988, Kim○○ was registered as the domicile of the instant house, but on July 22, 2005, the Plaintiff was registered as ○○○○○-dong ○○○○-8 ○○204, 204, on March 27, 2006.

(B) While operating the Kukdong (the name was changed from ○○ to ○21), Kim Il-dong, Seoul from 1996 to 198, ○○-163, ○○○-dong, Seoul from 1999 to 2003, ○○○-46, from 1999 to 2003, ○○○-dong, Seoul, and ○○○-dong, from 2003 to 2005, ○○-dong, Seoul, and ○○-dong, from 2003 to 2005, ○-dong, from ○○○-dong, Seoul, and ○○○-dong, from 2005 to 2005 to 20-dong, respectively.

(C) The Kim ○’s name opened a telephone of the extreme office in his name, read a periodical such as a monthly office with the address of the extreme office, and read it under his own name, and led to the fact-finding and the fact-finding and the fact-finding in a restaurant near the extreme office. The Kim ○ received admission fees and personal tuition fees, but according to the tax authorities’ income data, the total amount of KRW 2,130,000 won from 202 to 2006 was included in the income of KRW 2,1130,000 from 206.

(D) On February 1, 1996, 1996, Nonparty ○○ was registered respectively as ○○○-163, Seoul ○○○-dong, and ○○-46, Seoul ○○○-dong, 1996, from around July 9, 1996 to around 199.

[Reasons for Recognition] 1, 2, 9-1, 2, 13-1, 2, 14-1, 2, 3, 4, 16-1, 3, 4, 5-1, 3, 5-2, and 3, 10-1 through 4, 12-1, 2, 3, 3, and 5-1, 5-3, 10-1 through 4, 12-1, 2, 3, and 13-1, 5-1, 5-2, and 5-3, and some of the testimonys of 10-1, 12-1, 3, 14-1, 14-2, and 14-2,

(3) ① The ○○○○○○○○○○○○○○’s disposal of the same household as the Plaintiff’s resident registration number during most years from July 22, 2005 to March 26, 2006, except for the period from July 22, 2005 to March 26, 2006, should be deemed to have resided at the same place where the Plaintiff’s resident registration was made (see Supreme Court Decision 85Nu772, Mar. 11, 1986). ② It is recognized that the ○○○○○○○○○○’s disposal of the same household as the ○○○○○○○○○○○’s store was lawful, but it is difficult for the Plaintiff to live at the same place as the Plaintiff’s house or building, and thus, it is difficult for the Defendant to see that the Plaintiff’s ○○○○○ office would have operated the same household as the Plaintiff’s house delivery office to the same address.

3. Conclusion

Thus, the plaintiff's claim of this case seeking the cancellation of the disposition of this case cannot be accepted and dismissed.