Seoul Administrative Court 2012Guhap1140 ( October 20, 2012)

The fact that the comprehensive share swap is considered as a new title trust because it constitutes a transfer for value.

It is reasonable to view that the comprehensive share swap constitutes a transfer for consideration, and thus cannot be deemed a substitute or modified product for the previous shares, and that the trustee has an intention to maintain the title trust relationship with respect to new shares newly allocated.

Article 45-2 of the Inheritance Tax and Gift Tax Act

2013Nu2573 Revocation of Disposition of Imposition of Gift Tax

United Kingdom A

The director of the tax office.

Seoul Administrative Court Decision 2012Guhap1140 decided July 20, 2012

Seoul High Court Decision 2012Nu25462 Decided February 7, 2013

Supreme Court Decision 2013Du5791 Decided August 23, 2013

October 25, 2013

December 13, 2013

The judgment of the first instance is revoked, and the plaintiff's claim is dismissed.

All costs of the lawsuit shall be borne by the plaintiff.

Cheong-gu Office

"The defendant's disposition of imposition of gift tax OOO on March 11, 201 by the plaintiff against the plaintiff on March 11, 2011 is revoked (the "OOOOO on March 18, 201 of the complaint" seems to be a clerical error)."

The same shall apply to the order.

1. Quotation of judgment of the first instance;

The reasons for this decision are as follows, in addition to the second and fourth parts of the judgment of the court of first instance, the entry of the judgment of the court of first instance is as follows:

2. Parts in height:

1) Whether the title trust relationship is established

The judgment of remand to which this Court is bound is as follows.

① Since an all-inclusive share swap constitutes an asset transfer for consideration under the provisions of Article 88 (1) of the Income Tax Act (amended by Act No. 7837 of Dec. 31, 2005; hereinafter “Income Tax Act”), new shares of a complete parent company becoming a complete subsidiary are new assets received as the price for disposal of shares transferred, and cannot be deemed a substitute or modified substance of shares previously owned. ② Article 360-3 (1) and (2) of the Commercial Act provides for the exchange of shares as the special resolution of the general shareholders’ meeting, and Article 360-5 of the Commercial Act provides for the appraisal rights of the opposing shareholders, even if the shareholders of the company becoming a complete subsidiary are not parties to the share swap contract, such shares exchange contract may be deemed to have been concluded at their own will unless the shareholders of the company are parties to the share swap contract (see, e.g., Supreme Court Decision 2009Du19465, Feb. 10, 2011).

2) Whether there is no purpose of tax avoidance

The legislative purport of Article 45-2 (1) of the Inheritance Tax and Gift Tax Act is to recognize an exception to the substance over form principle with the purport of effectively preventing the act of tax avoidance using the title trust system and realizing the tax justice. Thus, only if the purpose of the title trust is not included in the purpose of the tax avoidance, the proviso of the same Article can be applied, and in such a case, the burden of proving that there was no purpose of the tax avoidance. Therefore, the fact that there was no purpose of the tax avoidance may be proven by means of proving that there was a purpose other than the purpose of the tax avoidance. However, the nominal owner who bears the burden of proof has a clear purpose irrelevant to the tax avoidance to the extent that it is recognized that there was no purpose of the tax avoidance in the title trust, and the fact that there was no tax avoidance at the time of the title trust or there was no tax avoidance at the time of the title trust should be proven to the extent that it is not a usual doubt (see, e.g., Supreme Court Decision 200

In light of the above legal principles, even if a new title trust relationship for the instant shares was established, the Plaintiff did not have any purpose of tax avoidance in view of the fact that the KimA had no property under its name and rather, it was unfavorable for the Plaintiff to evade taxes because it did not own real estate. However, as the Plaintiff alleged above, it is difficult to deem the Plaintiff to have no purpose of tax avoidance in the title trust of the instant shares solely on the ground that it is difficult to deem that there was no purpose of tax avoidance in the title trust of the Plaintiff, and there is no evidence to support that there was no purpose of

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and the judgment of the court of first instance with different conclusions is unfair, and it is revoked by the defendant's appeal and dismissed the plaintiff's claim. It is so decided as per Disposition.