If the ownership transfer registration has been made in the name of the owner of the real estate owned by the father and the name of the owner is returned again in the name of the father, a disposition imposing gift tax on the person

The tax liability of gift tax and the national tax claim thereof are established at the same time as the acquisition of donated property. According to Article 34(1) of the Inheritance Tax Act, since the property transferred to the spouse, a lineal ascendant or descendant shall be deemed to have been donated at the time of transfer of the property concerned, if the registration of transfer of ownership in the name of the person concerning the real estate is made legally without any substantive cause, but if such registration has been made lawfully, the obligation to pay gift tax and the national tax claim thereon should be duly established at the same time as the registration is made, and even if the ownership transfer of the person's name was cancelled and the ownership transfer of the person's name was returned to the future, even if the ownership of the real estate is returned to the original owner, the obligation to pay taxes

Article 34(1) of the Inheritance Tax Act

Plaintiff

The Director of Budget Office

Seoul High Court Decision 86Gu1302 Decided June 17, 1987

The judgment below is reversed and the case is remanded to Seoul High Court.

The grounds of appeal are examined.

According to the reasoning of the judgment below, based on the evidence adopted by the court below, the court below acknowledged the fact that the ownership transfer registration of the real estate of this case was originally registered in the name of the plaintiff non-party 1 under the name of the plaintiff non-party 1, who was originally denied, was made on June 15, 1985 in accordance with the Act on Special Measures for the Transfer of Real Estate Ownership, etc., and that the transfer registration of the real estate of this case to the plaintiff constitutes a transaction between lineal ascendants and descendants under Article 34 (1) of the Inheritance Tax Act, and thus, deemed that the real estate of this case was donated to the plaintiff, and imposed the gift tax of this case and defense tax on the plaintiff. After the non-party 1 filed a claim for cancellation of the ownership transfer registration of this case against the plaintiff, the court below revoked the ownership transfer registration of the plaintiff's title concerning the real estate of this case under the name of the plaintiff non-party 1, and revoked the ownership transfer registration of this case with the intention to evade the gift tax of this case.

However, the duty to pay gift tax and the state's taxation claim on the property are established at the same time as the acquisition of donated property, and according to Article 34 (1) of the Inheritance Tax Act, the property transferred to the spouse or a lineal ascendant or descendant shall be deemed to be donated at the time of transfer of the property concerned. Thus, if the registration of transfer of the Plaintiff's title to the real estate in this case was made lawfully without any substantive cause, but the registration was made lawfully, the Plaintiff's duty to pay gift tax and the state's taxation claim on the real estate in this case should be duly established at the time of the registration. Since the registration of transfer of the Plaintiff's title was cancelled and the ownership transfer of the Plaintiff's title to the real estate in this case was returned to Nonparty 1 who is the original owner

Nevertheless, the court below held that the disposition of this case was unlawful disposition for which the object of taxation was extinguished, on the ground that the transfer registration of the Plaintiff’s title was cancelled by the court’s recognition protocol without examining the circumstances where the ownership transfer registration of the Plaintiff’s title on the real estate in this case was completed. It did not exhaust all necessary deliberations, and erred by misapprehending the legal principles on the establishment and extinguishment of the gift tax liability and the State’s taxation rights thereon, thereby adversely affecting the conclusion of the judgment. Therefore,

Therefore, the judgment of the court below is reversed, and the case is remanded to the court below. It is so decided as per Disposition by the assent of all participating Justices.

Justices Yellow-ray (Presiding Justice)