Cho High Court Decision 2015Do3930 ( October 27, 2015)

Where a trust company sells and purchases land and obtains a new apartment, the disposition imposed on the transfer is legitimate.

In accordance with the contract of this case, it is reasonable to view that the land shares in this case are transferred for consideration equivalent to the amount calculated by deducting the charges from the sale price of the apartment for sale in lots.

Article 88 (Definitions) The Income Tax Act, Article 96 (Transfer Price) of the Income Tax Act, and Article 98 (Time of Transfer or Acquisition) of the Income Tax Act.

2016Gudan50764 Revocation of Disposition of Imposing capital gains tax

UnionA

D Head of the tax office

March 28, 2017

April 18, 2017

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

Cheong-gu Office

The Defendant’s disposition of imposition of KRW 00,000,000 on April 10, 2015 against the Plaintiff was revoked.

1. Details of the disposition;

A. The Plaintiff owned 7.27/1213 shares in 7.27/1213 of the instant land (hereinafter “instant land”) of OOOO-dong OO-dong OO-dong, Seoul (hereinafter “OO-dong”).

B. The MaGGGG Co., Ltd. (hereinafter referred to as “MoGGG”) on the land of this case HG on the land of this case

On July 20, 2006, in order to implement the new construction project of the apartment complex (hereinafter referred to as the "multi-family housing of this case") (hereinafter referred to as the "new construction project of this case"), the implementation contract with the plaintiff (hereinafter referred to as the "contract of this case") was entered into as follows, and the charge of Article 4 (1) was 'the charge of this case'.

Article 1 (Purpose)

The purpose of this Agreement is to provide owners of the land in this case with land to delegate and develop the construction of a new main complex to MaGGG, and to provide for the exchange of sale rights of new buildings in return for the provision of purchase rights of new buildings, and to provide the status, rights, obligations, etc. of the Plaintiff and MaGGG to complete the main complex construction project (hereinafter referred to as the "project").

Article 3 (Method of Performance by Substitutes)

(1) The method of payment in kind provided by MaGGG to the landowners is multiplied by 4.64 per square meter of the land registered by the landowner, and this will be the substitute area.

(2) A landowner may choose either a commercial building, an officetel, or an apartment.

(3) The owner of the land acknowledges the sale price approved by the competent authorities, and shall settle and pay to the MaGG the sales price of the remaining ordinary water except the payment area.

(4) The selection of a commercial building or an officetel shall be calculated as follows: (The face value of the commercial building x the substitute payment x the substitute payment / the sales price of the commercial building / the sales price of the commercial building = the sales price of the commercial building);

Article 4 (Co-owners' Charges for Rights to Purchase Ownership)

Where the sale price of building facilities sold in lots exceeds the amount paid in kind by the landowner, the landowner shall bear the difference, and the standards and methods of payment shall be as follows:

The charges of the landowner shall be the amount obtained by subtracting the area (amount) paid in kind by the landowners from the sale price of land sold in lots.

(1) Sale price - Area of payment in kind by landowners = Charges by landowners

Article 6 (Trust Registration)

(1) The landowner shall register the land of the landowner in trust to a trust agency designated by the motherGG.

(3) Upon the registration of a trust, the truster shall be the landowner, and the trustee shall be the trust agency designated by the MaGGG, and the landowner shall not terminate the trust until the completion of the project.

C. On April 2, 2007, according to the instant contract, the Plaintiff is a management-type land trust agreement (hereinafter “the instant trust”) withCC Real Estate Trust Co., Ltd. (hereinafter “CC Real Estate Trust”) as follows.

On April 6, 2007, the trust registration (hereinafter referred to as the "trust registration of this case") was concluded, and on April 6, 2007, the trust registration (hereinafter referred to as the "trust registration of this case").

Article 1 (Trust Purpose)

(1) The truster shall entrust the trustee with the land described in the attachment (1), and the trustee shall accept it.

② The purpose of this trust is to construct a main complex building on land and sell land and buildings (hereinafter referred to as "trust real estate") as trust property.

Article 3 (Construction of Buildings)

(1) The trustee shall have a construction company (hereinafter referred to as "construction company") selected by the trustee construct the building. However, the trustee may take this into account if recommended by the truster.

(2) The trustee shall, in advance, consult with the truster on the contract amount, method of payment, period of construction and other important matters with respect to the contract for construction works entered into with the construction company.

Article 7 (Delivery of Buildings and Publication of Trust)

A trustee shall, without delay, take over a building from a construction company after the inspection of use of the building, register the preservation of ownership and trust registration as trust property.

Article 8 (Methods of Sale, Management, and Operation of Trust Real Estate)

수탁자는 다음 각 호의 방법에 의하여 신탁부동산을 분양(처분) 및 관리��운용한다.

1. A trustee may sell the trusted real estate in lots on the amount and terms determined in a business plan;

2. Where reasonable grounds exist, a trustee may change the amount and conditions under subparagraph 1 in consultation with a truster, and may convert all or part of the real estate trusted from sale to lease;

3. 수탁자는 신탁부동산에 대하여 적정한 방법 및 시기, 범위 등을 정하여 수선��보본 개량을 위한 필요행위를 할 수 있다.

Article 11 (Trust Property)

The trust property shall be as follows:

1. Real estate in trust and money in trust;

2. Sale price of trusted real estate (including contract price and intermediate payment);

3. Rental deposit and rental fees accruing from the lease of real estate in trust;

4. Property acquired by subrogation of real estate in trust.

5. Borrowings under Article 4;

6. Borrowings and debts for repayment of deposits, etc. acquired in connection with the sale of trusted real estate;

7. Other assets and obligations which have occurred in the course of performing trust affairs.

Article 12 (Trust Profits)

The proceeds from the management of money belonging to the trust property and those corresponding thereto, which are generated from the sale of real estate in trust, shall be the proceeds from trust.

Article 13 (Initial Beneficiary)

The first beneficiary of this trust shall be the truster, but the third person shall be the beneficiary with the consent of the trustee.

Article 14 (Right to Benefit)

(1) A beneficiary shall acquire trust proceeds calculated by the method prescribed in the trust deed.

(2) A beneficiary is delivered the trust property at the time of termination or termination of the trust contract according to the prescribed method.

Article 16 (Transfer, Succession and Pledge of Rights to Benefit)

(1) The beneficiary may not transfer, succeed, or pledge the right to benefit without the consent of the trustee.

(2) Any person who acquires or succeeds to the right to benefit shall succeed to the rights and obligations of the beneficiary equivalent to the share ratio.

Article 24 (Termination of Trust Contract)

(1) The trust contract cannot be terminated.

(2) Notwithstanding the provisions of paragraph (1), if the trustee is unable to achieve the purpose of the trust due to a natural disaster, change in the economic situation or any other inevitable cause, or is unable or considerably difficult to perform the trust affairs,

and the trust contract may be terminated in consultation with the beneficiary.

(3) Notwithstanding the provisions of paragraph (1), the trustee may terminate the trust contract in any of the following cases:

1. Where the restricted real right related to the land has not been cancelled after the conclusion of this contract;

2. Where it is impracticable to promote a project because approval of a project plan or authorization or permission related thereto is not obtained or cancelled.

3. Where the truster has consulted with the trustee on other inevitable grounds.

Article 25 (Termination of Trust)

A trust contract shall be terminated in any of the following cases:

1. Where the purpose of trust is achieved;

2. Where the purposes of trust can not be achieved;

3. Where the period of trust expires;

4. Where a contract is terminated under Article 24;

Article 26 (Delivery of Trust Property upon Termination of Trust)

Where a trust contract is terminated, the trustee shall deliver the final calculation to the beneficiary in accordance with the following methods:

1. A trustee shall cancel the registration of a trust and transfer the trusted real estate to the beneficiary as the condition of existence after the registration of ownership transfer is completed;

D. On December 5, 2007, the Plaintiff entered into a sales contract withCC real estate trust, andCC real estate trust.

After completing the new construction of the apartment in this case, the owner completed the registration of initial ownership on February 14, 201 (hereinafter referred to as the "registration of initial ownership") after obtaining approval for use on December 15, 201.

E. On March 28, 2011, the Plaintiff purchased and sold fromCC real estate trust on December 5, 2007

of 102, 1903, among the apartment of this case (hereinafter referred to as "the apartment of this case").

29.6/100 shares of ownership transfer registration (hereinafter referred to as the "registration of apartment of this case") has been completed.

F. The Defendant transferred the instant land shares to the Plaintiff on or around February 14, 201 under the instant contract.

On April 10, 2015, the Plaintiff decided and notified capital gains tax of KRW 00,000,000 to the Plaintiff (hereinafter “instant disposition”).

G. The Plaintiff is dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal on July 20, 2015.

However, it was dismissed on October 27, 2015.

Facts that there is no dispute over the basis of recognition, Gap evidence 1 through 4, 6, and Eul evidence 1 through 4

evidence, including branch numbers), the purport of the whole pleading

2. Related statutes;

It is as shown in the attached Table related statutes.

3. Whether the instant disposition is lawful

A. Whether the instant land was transferred

1) The plaintiff's assertion

The Plaintiff provided the shares of the instant land to MaGGG pursuant to the instant contract.

The apartment building should be newly built, and the apartment of this case was acquired, and the plaintiff actually constructed an apartment on his own land, and therefore, among the shares in the land of this case, the plaintiff was a new apartment on his own land.

The part corresponding to the area of the site of a several apartment can not be deemed to have been transferred by the plaintiff.

2) Determination

A) The former Income Tax Act (amended by Act No. 11146, Jan. 1, 2012; hereinafter “Income Tax”)

Section 1 of Article 88 of the Act shall, regardless of the registration or record of the assets, sell such assets;

The actual transfer of assets at a cost due to exchange, investment in kind in a corporation, etc.

term "as defined," in subsection (2) of the same section, the term "urban Development Act" or any other Act;

(1) Where the land category or lot number is changed due to a replotting disposition or appropriated for a land allotted by the authorities in recompense for development outlay

It is stipulated that the transfer shall not be considered as a transfer.

B) The following are revealed by adding up the aforementioned facts and the purport of the entire argument

In light of the same circumstances, the Plaintiff’s share in the instant land in accordance with the instant contract.

Price equivalent to the amount calculated by deducting the charges of this case from the sale price of the apartment sold in lots;

It is reasonable to view that the transfer was made.

① The instant apartment construction project is a general real estate development project for which a disposition for building permission and approval for use was taken place in accordance with the Building Act. For the said project, the Plaintiff entered into the instant contract individually according to the intention of free with the motherGG, and accordingly, the Plaintiff provided the instant land shares and purchased the instant several apartment units, and there is no ground to deem that the said series of procedures were due to a replotting disposition under the Urban Development Act and other Acts as stipulated in Article 88(2) of the Income Tax Act.

② The contents of the instant contract provide the Plaintiff with the instant land shares for the new construction of the instant apartment, and as a result, sell the instant several apartment units, and settle the difference between the appraised value of the instant land shares and the selling price of the instant several apartment units. In this case, the Plaintiff’s share in the instant land is the Plaintiff’s share in the instant land, and the Plaintiff’s ownership in the instant several apartment units is the right to the instant apartment units, which is an apartment building, as a constituent element of the instant apartment unit. In other words, the instant share in land is an independent right separate from the ground building, but the site ownership is all the rights that cannot be separated from the aggregate building. Even for the same purpose of land, since each right is entirely different from the legal nature, it is difficult to view that the Plaintiff newly constructed a several apartment unit on the ground while maintaining part of the instant

③ The instant charges, which the Plaintiff provided the instant land share and settled after being sold in lots, are the amount calculated by subtracting the sales value equivalent to the area of payment in lots, multiplied by the ownership of the instant several apartment units from the sale price of the instant several apartment units. The method of settlement is for the convenience of settlement by calculating the value of the instant land share provided by the Plaintiff and the value of the instant several apartment units sold by the Plaintiff according to the respective calculation methods, and by allowing the Plaintiff to pay only the difference, and it is based on the premise that the value of the instant land share and the value of the instant several apartment units are paid. Of the instant land shares, it cannot be said that there was no transaction regarding the land equivalent to the area of the ownership of the instant several apartment units, or that no compensation was paid for the said part.

B. Regarding the timing of transfer

1) The plaintiff's assertion

The time of the transfer of the instant land shares shall be deemed not February 14, 201, the registration of preservation of ownership of the instant land was completed under the name ofCC real estate trust, but on April 6, 2007, when the registration of the instant trust was completed.

2) Determination

In light of the following circumstances, it is reasonable to view that the time of transfer of the instant land shares was February 14, 201, when considering the aforementioned facts and the purport of the entire pleadings.

① The Plaintiff agreed to transfer the instant land shares to the owner for the instant new construction project in accordance with the instant contract. Until the completion of the instant new construction project, the Plaintiff concluded that the instant land shares were entrusted to the CC real estate trust. By completing the instant trust registration in the meaning of reservation in accordance with the instant trust agreement, the trustee and the owner of the instant new construction project did not complete the disposition of ownership as to the instant land shares. In this case, the trustee and the owner of the instant new construction project are the parties having separate legal status in principle, and the same corporation (CC real estate trust) are the owner and the trustee.

② The Plaintiff under the instant contract prevents the Plaintiff from unilaterally terminating the trust agreement even under the instant trust agreement after the trust registration of the instant land shares was made by the time the trust agreement is terminated, and even under the instant trust agreement, the Plaintiff, the truster, from unilaterally terminating the trust agreement. However, where the trust agreement may be terminated for a certain reason, or where the trust agreement is terminated or the objective business cannot be achieved, the trust agreement shall be terminated (Article 25 of the trust agreement). In such cases, the registration of the trust on the trusted real estate shall be cancelled, the ownership transfer registration shall be completed for the buyer, and the trust property shall be transferred to the beneficiary in the existing state (Article 26 subparag. 1 of the trust agreement). In other words, the trust agreement is scheduled to terminate, and the trustee shall return the trust property to the buyer, beneficiary, etc., not

③ The price for the transfer of the instant land shares is that the Plaintiff purchased the instant several apartment units. The Plaintiff was in a state of unpaid payment until the instant new construction project is completed and the instant apartment registration is completed in accordance with the sales contract. The process was completed under the instant trust agreement and trust registration. The Plaintiff did not receive or agreed to pay the price for the land shares due to the trust agreement. In other words, when the instant trust registration was made, the settlement of the price for the instant land shares was not made at all.

④ As the purpose of the instant new construction project is achieved and the Plaintiff completed the registration of the instant apartment, it was necessary to prepare a method of guaranteeing the payment of the consideration therefor until the Plaintiff completed the registration of the instant apartment. On the contrary, from the perspective of the owner of the instant new construction project, even if the Plaintiff was unable to obtain full ownership of the instant land shares during the course of carrying out the instant new construction project, it was necessary to restrict the Plaintiff from disposing of the instant land shares in mind to a third party. Such bilateral necessity appears that the instant trust registration has been completed in order to restrict the use, profit-making, and disposal of the instant land shares within the scope of its purpose, and that the Plaintiff did not have actually received the payment for the instant land shares, and thus, the instant trust registration was not made

⑤ Although there is an expression “the substitute repayment area” under the instant contract, it merely appears that the price received by the Plaintiff corresponding to the share in the instant land is the numerical value converted into the area of the unit apartment of this case, and it does not mean that the registration of preservation of ownership in this case is actually made in accord with the Plaintiff. Although the registration of preservation of ownership in this case cannot be seen as the Plaintiff’s substitute payment, the fact that the transfer of ownership in this case was actually completed with the registration of preservation of ownership in this case does not change.

C. As to the computation of transfer value

1) The plaintiff's assertion

The transfer value shall be the sum of the amount equivalent to the actual transaction price and the amount of cash settlement, and it is unlawful to calculate the transfer value based on the sales price determined by the motherGG.

2) Determination

According to the factual relations as seen earlier, the Plaintiff agreed to recognize the sale price of the instant water-sale apartment approved by the competent authority (Article 3(3)), and to bear the amount calculated by subtracting the Plaintiff’s amount of payment in kind from the sale price (Article 4(1)). Therefore, it may be deemed that the agreement was reached to consider the sale price as the basis for calculating the sale price. Accordingly, the transfer price of the instant land share should be calculated based on the sale price according to the terms and conditions of the said agreement. The Plaintiff’s assertion on this part is rejected.

4. Conclusion

The plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.