The propriety of the disposition imposing gift tax by deeming the amount deposited in the financial account as donated property.

No special circumstance exists that the amount deposited in a financial account is carried out for any other purpose (such as the management of financial assets, the reduction of income tax burden on financial income, etc.), the disposition imposing gift tax is legitimate.

Article 2 of the Inheritance Tax and Gift Tax Act (Gift Tax Taxables)

1. The plaintiffs' claims are dismissed.

2. The costs of lawsuit are assessed against the plaintiffs.

Each disposition of imposition of gift tax of KRW 128,507,950, KRW 428,022,330, and KRW 610,903,470 against the Plaintiffs on April 2, 2007 shall be revoked.

1. Details of the disposition;

A. In the process of investigating the inherited property on March 16, 2006, when the Plaintiff ○○○○○○ (hereinafter “the deceased”) who is the husband of the Plaintiff Kim○-si and the father of ○○○○○○○○○ (hereinafter “the deceased”) died, it was revealed that the sum of KRW 2,559,771,640 (hereinafter “the money of this case”) was deposited on three occasions in the securities account in the name of the deceased as follows.

No.

Deposit Date

Financial Institutions

Account Number

Amount of reserve

Deposit Contents

1

February 28, 2005

○○ Securities

Omission

1,193,289,710

110 million won for a check,

Check 93,289,710 won per check

2

March 31, 2005

○○ Securities

Omission

1,125,428,870

One check

3

June 30, 2005

○○ Securities

Omission

241,053,060

One check

B. On April 2, 2007, the Defendant deemed that the deceased was donated to ○○, the father of the deceased, and issued each disposition imposing gift tax as stated in the purport of the claim to the Plaintiffs, the successor to the duty to pay the deceased, as a result of inheritance (hereinafter “instant disposition”).

[Reasons for Recognition] Facts without dispute, Gap 1, 2, 3, 4, 9 (including each number), Eul 1 to 4, the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiffs' assertion

The securities account in the name of the deceased is not managed by the deceased, but is only a borrowed-name account opened by ○○, the father of the deceased, in order to conduct a stock transaction, etc., and the instant money is not a donation from ○○○. Thus, the instant disposition made under the premise that the deceased was given a donation of the instant money was unlawful.

(b) Fact of recognition;

(1) On behalf of the Deceased, on February 28, 2005, ○ Securities Account was opened on behalf of the Deceased; on March 31, 2005; and on behalf of the Deceased, ○○ Securities Account was exchanged at ○○ Bank’s seat number of KRW 2,559,71,640, and deposited the national housing bonds owned by ○ Bank’s name at KRW 2,559,71,640, and deposited them in the instant securities account in installments as seen earlier. After the opening of the instant securities account, transactions and money deposited and withdrawn was conducted by ○○○ Exchange instruction.

(2) On November 21, 2005, the Deceased was hospitalized in ○○ University Busan Hospital on the fladism, and on February 3, 2006, the death was eventually made on March 16, 2006.

(3) On February 7, 2006, on May 6, 2006, 2006, ○○○○, a birth of the Deceased, reported and paid gift tax of KRW 3,040,259,838, which was deposited from the instant securities account, to the effect that it was donated by the Deceased.

(4) On September 16, 2006, on the deceased's inheritance declaration, the Plaintiff Kim Jong-do reported the amount of money donated to ○○○ as above by including the money donated to ○○ as donated property of the deceased in the inherited property value, and reported by deducting the amount of gift tax paid by ○○ upon the deceased's prior donation

(5) The deceased did not have a clear occupation before his birth, and most of his own properties were formed by donation from ○○○, and the deceased donated 49,962 shares, etc. of ○○○ Co., Ltd. on July 21, 1993 and July 26, 1993 (value assessed 686,656,90) from ○○, Inc. to ○○○, Inc. and paid the gift tax as revealed in the course of the tax investigation.

[Ground of recognition] Each entry of Gap evidence Nos. 5 through 8, Eul evidence Nos. 1 through 10 (including each number), the results of fact inquiry about the head of the Busan Hospital annexed to ○○ University, the head of the Dong branch of the ○○ Securities Company, the head of the Busan Dong branch of the ○○ Securities Company, the head of the Busan Dongdong branch of the ○○ Securities Company

C. Determination

In a lawsuit seeking the revocation of a disposition imposing gift tax, insofar as the amount of money of a person recognized as a donor by the tax authority is revealed to have been deposited with a securities account in the taxpayer’s name, such amount is presumed to have been donated to the taxpayer. Thus, barring special circumstances, such as withdrawing such amount and depositing it into a securities account in the taxpayer’s name, it is necessary to prove such fact to the taxpayer (see, e.g., Supreme Court Decision 2003Du6290, Oct. 10, 2003).

According to the above facts, it is difficult for the person who opened the securities account of this case to directly enter or depart from the securities account of this case, not the deceased, and the fact that the money withdrawn from the securities account of this case was donated to ○○○ who was born, but can be known by considering the overall purport of the pleading. On the other hand, the following circumstances, i.e., it is indicated that ○○○ upon reporting gift tax on the money deposited from the securities account of this case to ○○○○○○○○○○○○’s transfer of the above money to ○○○○○○○’s transfer of the above money, on the premise that it was difficult to view that ○○○○○○○○’s transfer of the securities account of this case to ○○○○○○○○’s transfer of the above money was merely an inherited property, and it is difficult to view that ○○○’s direct management of the securities account of this case was ○○○’s transfer of the above money without any specific reason. However, the plaintiffs’ assertion that the above transfer of the money was not attributable to ○○○’s transfer.

3. Conclusion

Therefore, the plaintiffs' claims are dismissed in entirety as it is without merit. It is so decided as per Disposition.