Where the decedent is liable for joint and several liability or for water guarantee at the time of commencement of the inheritance, the burden of proof on the grounds that the decedent would be finally liable for the insolvency of the principal obligor.

Where an ancestor bears joint and several liability for a third party at the time of commencement of inheritance or is responsible for a surety's property, since the principal debtor is insolvent, it should not be repaid by the decedent, and there is no possibility of being reimbursed even if the principal debtor exercises the right to indemnity against the principal debtor. Since there is a special reason that exceptionally affects the determination of the taxable amount of inheritance taxes, the burden of assertion entry is in the taxpayer who contests the taxable amount of inheritance taxes.

Article 4 of the Inheritance Tax Act

Supreme Court Decision 83Nu410 Delivered on December 31, 1983

Plaintiff 1 and four plaintiffs, et al., Counsel for the plaintiff-appellant-appellee and one other

Head of Seogsan Tax Office

Seoul High Court Decision 86Gu259 delivered on March 4, 1988

All appeals are dismissed.

The costs of appeal are assessed against the plaintiffs.

1. Judgment on the ground of appeal No. 1 by the plaintiffs' attorney

(1) Under Articles 4(1)3 and 10(2) of the Inheritance Tax Act, the obligation of an inheritee to be deducted from the value of inherited property pursuant to the inherited property refers to the obligation that is deemed certain to be performed by an inheritee with a ultimate burden at the time of commencement of the inheritance. Thus, in cases where an inheritee bears a joint and several liability for a third party at the time of commencement of the inheritance or is liable as a surety’s property, since a primary obligor is insolvent, it should not be performed by an inheritee, and in cases where it is deemed that there is no possibility for an obligor to receive reimbursement even if the primary obligor exercises his right to reimbursement against the primary obligor, the established precedents by which the amount of such obligation can be deducted from the value of inherited property are the same as a theory of lawsuit. However, since such special reason affects the determination of the taxable amount of inheritance taxes, it is reasonable to deem that the burden of proving the existence of such reason is a person liable to pay tax (Article 83Nu410, Dec. 13, 1983).

(2) The court below held that the non-party 1, the deceased non-party 2, his predecessor, set up a collateral on his own real estate in order to secure his obligation to purchase goods against Busan Pipe Co., Ltd. and delivered three copies of a check to the above non-party company. However, there is no evidence to prove that the non-party, at the time of commencement of the inheritance, was not capable of receiving reimbursement even if the non-party 1 performed his obligation and exercised the right to demand reimbursement. According to the relevant evidence and records, the judgment of the court below's above recognition is just and there is no error of law of finding facts against the rules of evidence, and there is no ground for discussing the above facts.

2. Determination on the ground of appeal No. 2

According to relevant evidence and records, the court below's finding the above non-party deceased's business debts amounting to 97,874,746 won is just, and the judgment below did not err in the misapprehension of facts as to this point. Thus, there is no reason to interpret this.

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

Justices Lee Jae-sung (Presiding Justice)