Examination-2018-Transfer-0061 (Law No. 12, 2018)

It is insufficient to recognize that the deceased actually used a new unauthorized building for his/her residence solely on the grounds that he/she moved in the relevant land. Therefore, the taxation disposition is legitimate.

It is insufficient to recognize that the deceased actually used a new unauthorized building for his/her residence on the ground that he/she was a moving-in report on the relevant land. Therefore, the taxation that excluded the deceased from the application of non-taxation as one house per household is lawful.

Article 154 (1) of the Enforcement Decree of the Income Tax Act

2018Guhap87781 Revocation of Disposition of Imposing capital gains tax

EO

Head of Nowon Tax Office

May 29, 2019

June 21, 2019

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The Defendant’s disposition of imposition of capital gains tax of KRW 649,180,810 (including additional tax) for the Plaintiff on May 1, 2018 shall be revoked.

1. Details of the disposition;

A. The deceased OO (hereinafter “the deceased on January 15, 2016,”) who is the father of the Plaintiff (hereinafter “the deceased”) completed the registration of ownership transfer on June 12, 1984 on the ground of the partition of co-owned property on April 9, 1984. Part of the above 4,381 square meters of forest was divided into 31-23 m23, 86 m2, Dongsan-dong on April 8, 1999, and part of the above 866m2 of forest was divided into 31-30 m2,584 m2, 201, 31-30 m2,000,0000 (hereinafter “the instant land”).

B. According to the ledger of an unauthorized Building, an unauthorized Building 59.49 square meters (hereinafter referred to as “former Unauthorized Building”) newly constructed in 1955 on the instant land is owned by this △△△, the births of the Deceased, the births of the Deceased. On the other hand, there exists a building (hereinafter referred to as “new Unauthorized Building”) from 2009 to 2013 attached Table 1 to 4 from 2013 on the instant land (Ga evidence 15-2), and the Deceased paid a non-authorized Building 139 square meters and 74 square meters (hereinafter referred to as “unauthorized Building”) with respect to the deceased or this △△△△△△ (hereinafter referred to as “the Unauthorized Building”).

C. On March 18, 2014, the deceased sold the instant land and the deceased’s unauthorized building (hereinafter “each of the instant real estate”), and KRW 1,912,40,000,000, an OO-dong 65-21, Seoul, OO-gu, Seoul, which was adjacent to the instant land, for KRW 1,912,40,000. The deceased reported and paid the capital gains tax by applying the non-taxation provisions for one household and the special long-term holding deduction for each of the instant real estate (hereinafter “non-taxation, etc.”).

1) In light of the fact that there is no big difference between the total area of the deceased’s unauthorized building (213 square meters) and the new unauthorized building (211.4 square meters), among the new unauthorized buildings, the building appears to be the structure of the deceased’s unauthorized building (213 square meters) and the new unauthorized building (211.4 square meters).

D. After conducting an audit in 2017, the director of the regional tax office: (a) ordered the deceased’s unauthorized building to exclude the issue of non-taxation, etc. on each of the instant real estate on the ground that it is not a house, but a building without permission. Accordingly, on May 1, 2018, the Defendant imposed and notified the Plaintiff, who is the inheritor of the deceased, of capital gains tax of 649,180,810 (including additional tax) for the year 2014 (hereinafter “instant disposition”).

E. On May 30, 2018, the Plaintiff filed a request for examination with the Commissioner of the National Tax Service, but was dismissed on September 13, 2018.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 through 4, 14, 15, 18 (including branch numbers for those with branch numbers; hereinafter the same shall apply), Eul evidence Nos. 1 and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

Since the deceased destroys the former unauthorized Building, constructed a building without permission (the same as a new unauthorized building) and used it for residential purposes, issues, non-taxation, etc. should be applied to the deceased.

B. Relevant statutes

Attached Form 3 shall be as listed in attached Table 3.

C. Determination

1) Relevant legal principles

"The burden of proof concerning the requirements for tax reduction and exemption is against a taxpayer who asserts the grounds for such reduction and exemption, and the interpretation of the tax law is to be interpreted as the legal text, barring any special circumstance, and it is not permitted to be expanded or analogically interpreted without any reasonable reason. In particular, it accords with the principle of fair taxation with the strict interpretation of the provisions regarding the requirements for tax reduction and exemption (see, e.g., Supreme Court Decision 2008Du7830, Oct. 23, 2008). Meanwhile, the purpose of a house to which one household is subject to tax exemption is to lease to another person even if the transferor and his family are used for residence (see, e.g., Supreme Court Decision 96Nu14616, May 9, 197); and (ii) the relationship between the former unauthorized building and the new unauthorized building.

According to the circumstances of the above disposition, the fact that an unauthorized building like the new unauthorized building was constructed on the instant land can be acknowledged. However, in full view of the following circumstances, it is insufficient to recognize that the evidence submitted by the Plaintiff alone proves that the previous unauthorized building was demolished when the new unauthorized building was constructed, and there is no other sufficient evidence to acknowledge it. The Plaintiff’s assertion on this part is rejected.

A) The former unauthorized Building was newly constructed in 1955 and was registered as an unauthorized Building Register and Property Tax Ledger by 2013, and the former Unauthorized Building was publicly announced as a house from 2006 to 2014 in the details of the notification of individual housing price in the computerized data of the National Tax Service (NTS).

B) On the premise that there is a Gu unauthorized Building around 2010, the deceased filed a lawsuit against this △△ to remove the Gu Unauthorized Building and deliver the land on its ground (OO District Court 2010dan000, hereinafter referred to as “related civil lawsuit”) (OO District Court 2010dan000, hereinafter referred to as “the instant land”), and the conciliation was completed on February 21, 201.

C) A new unauthorized building was registered as another building (a building with a specific use index of 80 (factory, warehouse, wooden room, senior secretary, etc.) in the property tax ledger, and property tax was imposed from 2005 to 2013, and the deceased paid the building without any particular objection.

D) It is highly likely that a new unauthorized building was constructed by constructing a new building on the side of the former unauthorized building (to be seen as a building on the part of the attached Form 2 drawing(s)).

3) Whether the former unauthorized building was used as the deceased’s residence

Even according to the letter of confirmation prepared by this △△ and this △△△, the deceased was partially leased to two households while constructing a new unauthorized building. In many cases, 4-5 households were living in a new unauthorized building. In light of the above, it is insufficient to recognize that the deceased was actually using a new unauthorized building for his residence only on the grounds that the deceased was in the state of moving-in from March 4, 1982 to March 28, 1997, and other evidence submitted by the plaintiff that the deceased was in the state of moving-in from March 4, 1982 to March 28, 197, or that the deceased was actually using a new unauthorized building for his residence, and there is no other sufficient evidence to acknowledge this otherwise. The plaintiff's assertion on this part is rejected.

3. Conclusion

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