[1] The assessment of inherited property and the scope of normal price

[2] Whether a tax authority’s supplementary evaluation of the value of inherited property for the imposition of inheritance tax constitutes an expression of public opinion on the normal price at the time of acquisition (negative)

[1] According to Article 97 (1) 1 (b) of the former Income Tax Act (amended by Act No. 6051 of Dec. 28, 1999), Article 89 (1) 3 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 15969 of Dec. 31, 1998), and Article 163 (1) 1 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 15969 of Dec. 31, 199), the actual transaction price required to acquire inherited property refers to the normal price at the time of acquisition. Here, the normal price refers to the market price, actual transaction price, appraisal price, etc., and the former Inheritance Tax Act (amended by Act No. 5193 of Dec. 30, 199), Article 9 (2) of the former Enforcement Decree of the Inheritance Tax Act (amended by Presidential Decree No. 15193 of Dec. 31, 1996).

[2] Even if the tax authority has applied the value assessed as a supplement because it is difficult to calculate the market value while evaluating inherited property in order to impose inheritance tax, it cannot be deemed that it expressed a public opinion that the value would be applied as the actual transaction value at the time of acquisition in calculating gains on transfer following the transfer of inherited property.

[1] Article 97 (1) 1 (b) of the former Income Tax Act (amended by Act No. 6051 of Dec. 28, 1999), Article 89 (1) 3 and Article 163 (1) 1 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 15969 of Dec. 31, 1998), Article 9 (2) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 5193 of Dec. 30, 1996), Article 9 (1) and (3) of the former Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 1961 of Dec. 16, 199), Article 5 (6) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Act No. 15193 of Dec. 16, 196), Article 9 (1) 9 of the former Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 15198 of Dec. 196 of Dec. 19, 196 of the current Act)

[1] Supreme Court Decision 89Nu855 delivered on February 13, 1990 (Gong1990, 684) Supreme Court Decision 92Nu15352 delivered on March 26, 1993 (Gong1993Sang, 1326) Supreme Court Decision 95Nu6090 delivered on June 10, 197 (Gong1997Ha, 2052), Supreme Court Decision 97Nu8502 delivered on September 26, 1997 (Gong1997Ha, 3332), Supreme Court Decision 200Du1287 delivered on July 28, 200 (Gong200Ha, 1952), Supreme Court Decision 200Do3019 delivered on September 28, 2001 (Gong2009Du340381 delivered on September 28, 200).

Plaintiff (Attorney Kim Dong-dong et al., Counsel for plaintiff-appellant)

The Director of Gangnam District Office

Seoul High Court Decision 2001Nu8300 delivered on December 13, 2001

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

1. Regarding the normal price at the time of acquisition of unlisted stocks

According to Article 97 (1) 1 (b) of the former Income Tax Act (amended by Act No. 6051 of Dec. 28, 1999), Article 89 (1) 3 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 15969 of Dec. 31, 1998), and Article 163 (1) 1 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 15969 of Dec. 31, 199), the actual transaction price required for acquiring inherited property refers to the normal price as at the time of acquisition. Here, the term "market price" refers to the market price, actual transaction price, appraisal price, etc. (see Supreme Court Decisions 92Nu15352 of Mar. 26, 1993; 95Nu6090 of Jun. 10, 197); Article 99 (1) 2 of the former Inheritance Tax Act (amended by Presidential Decree No. 151932 of Dec. 1930 of Dec. 19, 1993). 190 of the Inheritance Tax Act.

In the same purport, the court below is just in holding that, with respect to the transfer on August 7, 1996 of non-listed shares 267,738 shares ("the shares of this case") inherited on June 20, 1990 by the plaintiff, the tax authorities at the time of inheritance cannot calculate the market price of the shares of this case, and even if the inheritance tax was imposed after the tax authorities assessed the market price of the shares of this case in accordance with the current Inheritance Tax Act and subordinate statutes, it cannot be viewed as the normal price because it is merely a supplementary appraised value. There is no error of law by misunderstanding legal principles as to the normal price at the

2. As to the principle of good faith

Even if the tax authority applied a supplementary appraised value because it is difficult to calculate the market price in the course of evaluating inherited property in order to impose inheritance tax, it cannot be deemed that it expressed a public opinion that the value will be applied as the actual transaction price at the time of acquisition in calculating gains on transfer following the transfer of inherited property.

The decision of the court below to the same purport is just, and there is no error of law as to the principle of good faith under the Framework Act on National Taxes.

3. Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Son Ji-yol (Presiding Justice)