1. All of the plaintiffs' claims are dismissed.

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

Details of the disposition

C On June 30, 2016, a written contract for the receipt of each real estate listed in the list (attached Form 1) (hereinafter referred to as “instant real estate”) from D (hereinafter referred to as “prior donation”) with D (hereinafter referred to as “prior donation”), and completed the procedure for the registration of ownership transfer on July 7, 2016.

At the time of the preceding donation, the instant real estate was registered as a collateral for the obligor D, the secured debt amount of KRW 120,000,000, and the collateral security holder as E (hereinafter “E”), but it did not state that C assumes the instant obligation from D in the prior donation agreement (hereinafter “instant obligation”).

In addition, C calculated on June 30, 2016 the entire real estate value of this case at free acquisition price, and reported and paid acquisition tax on the previous gift by applying 3.5% of the free acquisition tax rate.

On November 30, 2017, the Plaintiffs drafted a contract for the transfer of ownership (hereinafter referred to as “instant contract for the transfer of ownership”) under the terms of receiving one-half shares of the instant real estate from C (hereinafter referred to as “instant donation”) with the mother C on November 30, 2017. The Plaintiffs completed the procedure for the transfer of ownership based on the instant donation on December 14, 2017.

However, the gift contract of this case states that "the real estate of this case is owned by C, and as well as the debt of this case, the parties agreed to donate 50% shares to the plaintiffs with 50% shares, and the plaintiffs accepted it respectively."

On November 30, 2017, the Plaintiffs asserted that the donation of this case constitutes “an onerous donation with the obligation of a donor” under Article 7(12) of the former Local Tax Act. Of the tax base amounting to KRW 282,00,000, the amount equivalent to KRW 120,000 of the instant debt amount shall be subject to the tax rate of KRW 600,000 for a house equivalent to KRW 120,000, and the remainder of KRW 162,00,000 for a house shall be subject to the tax base amount.