The disposition of this case which imposes inheritance tax on the basis of the standard market price of multi-family housing according to the supplementary assessment method is legitimate because there is no example price.

Even if there is a transaction practice, if the transaction value cannot be seen as a price formed through a normal transaction that properly reflects the objective exchange value of the donated property as above, and in this case, considering the overall circumstances, it is difficult to view the transaction value of the leased house as the market value of the instant house, and the Plaintiff’s assertion based on such premise is without merit.

Article 60 of the former Inheritance Tax and Gift Tax Act

2014Guhap1604 Revocation of Disposition of Levying Inheritance Tax

AA

BB Director of the Tax Office

April 25, 2014

June 20, 2014

1. The plaintiff's claim is dismissed.

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

The Defendant’s disposition of imposing inheritance tax of KRW 153,601,160 on the Plaintiff on June 10, 2013 exceeds KRW 96,001,160, shall be revoked.

1. Details of the disposition;

A. On March 4, 2012, the Plaintiff reported the taxable value of inherited property at KRW 25,769,804,058, and the inheritance deduction amount at KRW 3,700,000,00, by filing an inheritance tax return with the heir of the decedent CCC who died on March 4, 2012.

B. From January 21, 2013 to April 22, 2013, the head of the Seoul Regional Tax Office added KRW 30,000,000,000,000,000,000,000,000,000,000, which was already donated by DDDD prior to the commencement of inheritance, to inherited property. After reducing the value of non-taxable property by KRW 38,236,39,00,00,00,000, the taxable value of inherited property was increased by 268,736,39,000 (30,000,000, 38,236,399, + 200,50,000,000).

C. Meanwhile, at the time of inheritance declaration, the Plaintiff is the standard market price of multi-family housing in Seoul EE-Gu EE-dong 1617-22 FF 22, FF 204 (hereinafter “instant housing”).

Although a return was filed as KRW 1,128,000,000, on April 20, 2012, which was six months after the commencement of inheritance, the sales contract was concluded on April 20, 2012 with respect to KRW 1,00,000,000 for the purchase price of KRW 1,128,000,000 for the purchase price for the EE EE-dong 1617-222 FF 10,000 (hereinafter referred to as “house subject to non-school”) and requested to be recognized as the market price. However, the Defendant determined the market price based on the initial apartment price reported by the Plaintiff.

D. Accordingly, the Defendant increased the taxable value of inherited property by KRW 268,736,39, and determined and notified inheritance tax base of KRW 22,338,540,457 ( KRW 22,069,804,058 reported by the Plaintiff + KRW 268,736,399) on June 3, 2013 to the Plaintiff on June 3, 2013, KRW 43,62,729, KRW 258,596, KRW 44,593,533, and KRW 39,936,303, and KRW 153,601,161 (hereinafter “instant disposition”).

[Reasons for Recognition] Facts without dispute, Gap's 1 to 3 evidence, Eul's 1 to 3 evidence (including other numbers) and the purport of the whole pleadings

2. The plaintiff's assertion

The sales case price of the house similar to the house in this case within six months from the commencement date of the inheritance

Since there was a transaction example of the comparable house, 1,000,000,000 won should be deemed as the market price of the house in this case.

3. Relevant statutes;

Attached Form is as shown in the attached Form.

4. Determination

(a) Facts of recognition;

1) In the case of the apartment housing of the Seoul EE-dong 1617-22 FF lower-class 16 units, one unit.

In addition, 4 households with the fourth floor (401, 402, 403, 404) among 16 households are 230.42 square meters in exclusive use area, and the remaining 12 households are 232.22 square meters in exclusive use area, 4 households with the fourth floor in January 1, 201 are 1,08,000 won in multi-family housing and 1,128,000,000 won in total for each household with the fourth floor in January 1, 201.

2) The standard market price of the instant housing and the comparable housing from 2002 to 2011

1,128,00,000 are the same as follows, and in 2012, all of them are 1,128,000 won.

Table 1. Standard market price of the housing of this case and the comparative housing

(unit: 1,000 won)

3) Meanwhile, on April 20, 2012, the JJ concluded a contract with KK to purchase the comparable housing at KRW 1,000,000,000, and completed the registration of ownership transfer on May 24, 2012. In the process of inheritance tax investigation, the J stated that the market price at the time of acquisition was at KRW 1 billion from KRW 1 billion from KRW 1 billion, KRW 1.1 billion from KRW 2 billion from KRW 1.2 billion from KRW 1 billion, and KRW 1.4 billion from KRW 1.4 billion from KRW 2 billion from the market price by disposing of it rapidly.

[Reasons for Recognition] The evidence adopted earlier, Gap evidence Nos. 7, Eul evidence Nos. 3 and 4

B. Determination

1) The former Inheritance Tax and Gift Tax Act (amended by Act No. 11609, Jan. 1, 2013; hereinafter the same shall apply)

Article 60(1) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 24358, Feb. 15, 2013; hereinafter the same) provides that "the value of an asset on which inheritance tax or gift tax is levied under this Act shall be based on the market price as of the date of commencing the inheritance or the date of donation (hereinafter referred to as "date of appraisal")." Paragraph (2) of the same Article provides that "the market price under paragraph (1) shall be ordinarily established when a free transaction is made between many and unspecified persons, and shall include the expropriation price, public sale price, and appraisal price, which shall be recognized as the market price, as prescribed by Presidential Decree." Article 49(1)1 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 24358, Feb. 15, 2013; hereinafter the same shall apply)" shall be deemed as "the normal sale price of the relevant asset within 6 months before or after the base date of appraisal, where it is deemed as the market price at issue.

2) The facts acknowledged earlier in accordance with the relevant legal doctrine and the following revealed in the instant argument

In light of all the circumstances, the Plaintiff’s assertion based on the premise that the transaction value of the comparative housing is difficult to be considered as the market price of the housing of this case is without merit, and the disposition of this case, which imposes inheritance tax on the basis of the standard market price of multi-family housing, is legitimate

A) The instant housing and the comparable housing are located in one building, and the area, category, and standard market price stipulated in Article 49(5) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act are the same, but there is a difference in the location, and in particular, there is a difference in the view right and dampness by the second and second floors.

B) The instant housing is the second floor, and the comparative housing is the first floor that falls short of the preference, and the first floor.

It is difficult to see that the common quota can be practically used in Vietnam, even if it is limited to the common area, and it is not a space that can be used exclusively by the residents of the first floor, and it is not a space that can be used exclusively.

C) The JJ, a transferee of comparable housing, shall promptly dispose of KK, a former owner of the leased housing.

In light of the fact that at the time of entering into a sales contract on April 20, 2012, the comparable housing could have been acquired at a lower price than the market price at the time of entering into the sales contract, and that real estate transactions are generally traded above the standard market price, it is difficult to view the sales price of the comparable housing as an objective exchange value formed

5. Conclusion

The plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.

Relevant statutes

The previous Inheritance Tax and Gift Tax Act (amended by Act No. 11609, Jan. 1, 2013)

Article 60 (Principles, etc. of Appraisal)

(1) The value of property on which inheritance tax or gift tax is levied under this Act shall depend on the market price as of the date the inheritance commences or the date of donation (hereinafter referred to as the "date of appraisal"). In such cases, the value (excluding cases falling under Article 63 (2)) appraised by the method of appraisal stipulated under Article 63 (1) 1 (a) and (b) shall be deemed the market

(2) The market price referred to in paragraph (1) shall be the value which is generally deemed to be formed if transactions are made freely between many and unspecified persons and includes the expropriation price, public sale price, appraisal price, and others recognized as the market price, as prescribed by Presidential Decree.

(3) Where it is difficult to compute the market price in applying paragraph (1), the value appraised by any method prescribed in Articles 61 through 65 in consideration of the type, scale, transaction status, etc. of the relevant property shall be deemed the market

(4) In applying paragraph (1), the value of donated property to be added to the value of an inherited property pursuant to Article 13 shall be the market price as of the date of donation.

Article 61 (Appraisal of Real Estate, etc.)

(1) Real estate shall be appraised by any of the following methods:

[.]

4. The individual housing price and apartment price under the Public Notice of Values and Appraisal of Real Estate Act (referring to the apartment housing price determined and publicly notified by the Commissioner of the National Tax Service pursuant to the proviso to Article 17 (1) of the same Act, if any): Provided, That the price of the housing without the individual housing price and apartment price shall be the amount appraised by the method prescribed by Presidential Decree in consideration of the individual housing price and apartment

The actual provisions of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 24358, Feb. 15, 2013)

Article 49 (General Principles, etc. of Appraisal)

(1) "The market price recognized as the market price, as prescribed by Presidential Decree, such as the expropriation price, public sale price, and appraised price, as prescribed by Presidential Decree" in Article 60 (2) of the Act means any of the following amounts verified in cases of sale, appraisal, expropriation, auction (referring to an auction under the Civil Execution Act; hereafter the same shall apply in this paragraph) or public sale (hereafter referred to as "sale, etc." in this Article) during a period of up to six months before or after the evaluation base date (three months in the case of donated property; hereafter the same shall apply in this paragraph): Provided, That even during a period not falling under the evaluation period of two years before the evaluation base date, where sale, etc. occurs during the period falling under any subparagraph of paragraph (2) from the evaluation base date to the date falling under any subparagraph of paragraph (2), if it is deemed that there are no special circumstances in view of the management status, lapse of hours, changes in surrounding environment, etc. of the company issuing stocks, the relevant price of the relevant sale, etc.

1. The transaction amount, if any, of the relevant property: Provided, That any of the following cases shall be excluded herefrom:

(a) Where the transaction value is deemed objectively unfair due to transactions, etc. with the specially related persons falling under any subparagraph of Article 12-2 (1);

[.]

(2) In applying paragraph (1), when applying paragraph (1), whether a value under any subparagraph of paragraph (1) falls within six months before or after the standard date of appraisal (three months for donated property), it shall be determined based on the dates classified in the following subparagraphs, and when a value deemed a market price under paragraph (1) is at least two, the value corresponding to the date nearest before or after the standard date of appraisal shall be applied: Provided, That the value under paragraph (5) shall not apply where the sale, purchase

1. The sales contract date for the case of paragraph (1) 1;