National High Court Decision 2005No1307 (Law No. 21, 2005)

Transfer

Revocation

If a right to move into a current house is transferred within two years from the date of acquisition of the current house, capital gains tax can be exempted on the basis of the transfer of two houses temporarily for one household.

Article 89 of the Income Tax Act / [Scope of one house for one household] Article 154 of the Enforcement Decree of the Income Tax Act

National High Court Decision 2004west0593//Sgd.

National High Court Decision 2005Da3307 / National High Court Decision 2005Du3462

The disposition of imposition of capital gains tax of 31,983,680 won on the claimant for the year 2001 shall be revoked.

1. Summary of disposition;

The claimant acquired the OOOOOOOOOOOOOOOOOOOOOOOOO(hereinafter referred to as "sub-owned housing") on August 10, 199 and transferred it on December 3, 2001 after the date of the rebuilding project approval plan. The claimant acquired the OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO(hereinafter referred to as "current residential housing"). The agency notified the director of the regional tax office of the result of planning and audit on the transfer of the right to occupancy after the date of the rebuilding project approval, the claimant cannot be deemed to transfer the status of the selected apartment (hereinafter referred to as "right to occupancy") after the date of the rebuilding project approval, and it cannot be deemed that the claimant for the transfer of the house belongs to 1301 houses for 105 1065 households.25

The claimant appealed against this and filed an appeal on April 1, 2005.

2. Opinions of the claimant and disposition agency;

A. The claimant's assertion

The key issue house is an apartment house scheduled to be reconstructed, which was approved for reconstruction project in October 28, 200, but the applicant had resided in the tenant as of December 3, 2001 at the time of the transfer of the housing at issue, and was subject to reconstruction management and disposal in March 10, 2002, which was trusted in trust to the reconstruction association in the reconstruction association in March 18, 2002, and removed and destroyed on November 8, 2002. Thus, the key house should be deemed as one house for one household to which the special provisions of Article 155(17) of the Enforcement Decree of the Income Tax Act for one year of possession is applied at the time of the transfer of the right to use at the time of the transfer of the housing at issue.

(b) Opinions of disposition agencies;

In the case of reconstruction apartment, the transfer income tax is imposed by deeming the reconstruction from the date of approval of the business plan under the Housing Construction Promotion Act to the date of issuance of the inspection certificate for use of the reconstructed apartment, and according to Article 155 (16) of the Enforcement Decree of the Income Tax Act, if the right to occupancy is transferred, only one household shall be deemed to have been transferred if there is no other house as of the date of transfer. Thus, the claimant has another house as of the date of the transfer of the right to occupancy, and therefore, the initial disposition that did not apply the

3. Hearing and determination

A. Key issue

In cases where the right to move into a reconstruction apartment is transferred under the status of another house, whether capital gains tax may be exempted on the basis of the temporary transfer of two houses for one household.

(b) Related statutes;

(1) Income Tax Act (amended by Act No. 6557 of Dec. 31, 2001)

Article 89 【Non-taxable Transfer Income Tax】 No income tax on transfer income (hereinafter “transfer income tax”) shall be levied on the following incomes:

3. Income accruing from a transfer of one house for one household prescribed by Presidential Decree (excluding high-class houses the total floor area, value, facilities, etc. of which exceed the standards prescribed by Presidential Decree of residential buildings) and the appurtenant land within the area calculated by multiplying the area of land on which a building is built by the ratio prescribed by Presidential Decree by

Article 94 (Scope of Transfer Income) (1) Transfer income shall be the following incomes generated in the year concerned:

1. Income accruing from transfer of land (referring to a lot of land subject to registration of land category in the cadastral record under the Cadastral Act) or buildings (including the facilities and structures annexed to such buildings);

2. Income accruing from transfer of any right to the real estate falling under any of the following items:

(a) Right to acquire real estate (including the right to acquire a building upon completion of its construction and its appurtenant land);

(2) The Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 17456, Dec. 31, 2001)

(1) The term “one house for one household” in Article 89 (3) of the Act means the case where a resident and his spouse together with the family members living together with them at the same address or same residence, possess one house in Korea as of the date of transfer, and the holding period of the relevant house is three years or more: Provided, That in the case falling under one of the following subparagraphs, the restriction on the holding period shall not be applicable:

Article 155 【Special Cases concerning One House for One Household】 (1) In case where one household having one house in Korea has come to possess two houses temporarily by acquiring another house (including the case where it acquires by constructing by itself) before transferring the house, and transfers the previous house (in case where it falls under Article 154 (1) 2 (a) and (b), referring to the remaining house and its appurtenant lands) within 2 years from the date of acquiring another house (in case where it is transferred to or expropriated by the executor of the public project as referred to in Article 154 (1) 2 (a) and (b), the relevant transfer date or the date of expropriation) (including the case where it falls under the causes as determined by the Ordinance of the Ministry of Finance and Economy, in case where it is impossible to transfer within 2 years), such house shall be considered

In case where a member of a redevelopment association under the Urban Redevelopment Act, or a reconstruction association under the Housing Construction Promotion Act (limited to the date of authorization of management and disposal plans under Article 34 of the Urban Redevelopment Act, the date of approval of a project plan under Article 33 of the Housing Construction Promotion Act, and in case where the existing house is removed before that date, the person who owns the existing house falling under Article 154 (1) as of the date of removal of the existing house) transfers the status of being selected as the occupant acquired through the association concerned (including the land annexed thereto), the said status shall, notwithstanding the provisions of Article 157 (3) 2, be considered as one house for one household under Article 154 (1).

⑰ 다음 각호의 1에 해당하는 1주택에 대하여는 제154조 제1항 본문의 규정을 적용함에 있어서 "3년"을 "1년"으로 본다.

1. A house acquired by a person who concludes a sales contract (including the case of public sale or auction) for the acquisition from January 1, 1999 to December 31, 199, and pays the down payment (referring to the bid bond, etc. in the case of public sale or auction);

C. Facts and determination

(1) The claimant acquired the housing units at issue on August 10, 1998, and transferred them to December 3, 2001, after the approval date of the reconstruction project plan (200.10.28). The housing units at issue are confirmed by a certified copy of the register of the housing units and the building management ledger, etc. that the reconstruction project was implemented by the OOOOOOOOOOOOOOOOO reconstruction association (the head of the association hereinafter referred to as the OOO; the reconstruction association was approved by the OOOOOOO; the management and disposal for reconstruction was completed; the reconstruction registration was received in the name of the reconstruction association on March 18, 2002; and the reconstruction association was removed after November 8, 2002.

(2) The claimant acquires a residential house as of October 26, 2001, immediately before transferring the issue house, and holds it as of the date of this request for adjudication, and it is confirmed that there was another house at the time of transfer of the issue house.

(3) First, we examine whether the key house is a house at the time of transfer or a right to move into.

(A) The claimant presented a sales contract at the time of the transfer of the housing at issue, and argues that the housing at issue was the tenant at the time of the transfer, and that the claimant should be deemed the transfer of the housing rather than the transfer of the right of the housing because the housing was removed after the date of the transfer.

(B) According to Article 155 (16) of the Enforcement Decree of the Income Tax Act, in the case of redevelopment, the authorization date of the management and disposal plan under Article 34 of the Urban Redevelopment Act, and in the case of reconstruction, the approval date of the project plan under Article 33 of the Housing Construction Promotion Act (in the case of demolition of the existing house before that date, the date of removal of the existing house), respectively, shall be deemed to be the time of acquisition of the right to move into the house. The claimant fails to present reliable evidence to verify whether the tenant actually resided in the house at the time when the house at issue was at issue was at issue, and even if the house transferred after that date of approval of the reconstruction project plan was not removed, the house at issue shall be deemed to be the right to move into the house rather than the house (OOOOOO or

(4) Next, we examine whether capital gains tax may not be levied on the transfer of the key house (hereinafter referred to as “right to occupancy”) by deeming the temporary transfer of two houses by one household on a temporary basis.

(A) According to the provisions of subparagraph 3 of Article 89 of the Income Tax Act and Article 154 (1) of the Enforcement Decree of the same Act, where one household living together with a household owns one house in Korea as of the date of transfer, no transfer income tax shall be imposed on the transfer income of the house holding period of not less than three years. According to the provisions of Article 155 (17) 1 of the Enforcement Decree of the same Act, in applying the provisions of the main sentence of Article 154 (1) of the same Act, for a house acquired by a person who concludes a sales contract for acquiring a house from January 1, 199 to December 31, 199, and pays a down payment, the term "three years" shall be deemed as "one year" for the house acquired by a person who has purchased another house in Korea, and according to the provisions of Article 155 (1) of the Enforcement Decree of the same Act, where one household possessing another house temporarily acquires the house before transferring it, it shall be deemed as a non-taxation one house under paragraph (14).

(B) In a case where a member of a housing association transfers a right to move into a housing unit, the right to move into a housing unit is distinguished from the right to acquire the real estate, and thus, it cannot be exempted from capital gains tax by directly applying Article 89 subparag. 3 of the Income Tax Act and Article 154(1) of the Enforcement Decree of the same Act, which is a non-taxation provision for one house for one household. However, in a case where there is no other house at the time of transfer of the right to move into a housing unit, and the previous house as of the date of approval of a project plan, it is exempted from capital gains tax as provided by Article 155(16) of the Enforcement Decree of the Income Tax Act, and if a member transfers a right to move into a housing unit within 2 years from the date of transfer of the right to move into a housing unit, he shall also be exempted from capital gains tax pursuant to Article 155(1) of the Enforcement Decree of the Income Tax Act, which is a special provision for non-taxation under Article 154(1) of the Enforcement Decree of the Income Tax Act.

In this case, the claimant transferred the right to move into the issue within 2 years from the date of acquiring the current residential house, and all of the non-taxation requirements stipulated in Article 155 (1) of the Enforcement Decree of the Income Tax Act, such as holding the previous house for 1 year or more as of the date of approval of the business plan, it is reasonable to view that

4. Conclusion

This request for a trial is reasonable as a result of the review, so it is decided as per Disposition in accordance with Articles 81 and 65 (1) 3 of the Framework Act on National Taxes.