Cho Jae-2016-China3456 ( November 21, 2016)

real estate acquisition funds are presumed to have been donated to his father.

The taxpayers need to prove special circumstances, such as that the payment of real estate acquisition funds is made for any purpose other than donation.

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

2017Guhap30093 Revocation of Disposition of Imposition of Gift Tax

UnionA

○ Head of tax office

2017.05.25

2017.06.22

1. All of the plaintiff's claims are dismissed.

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

Cheong-gu Office

The Defendant’s disposition of imposition of KRW 00,00,000, which was made against the Plaintiff on July 31, 2012 against the Plaintiff on March 2, 2016, and the aggregate of KRW 00,00,00,000, which was made on August 10, 2012, shall be revoked.

1. Details of the disposition;

A. On August 10, 2012, the Plaintiff acquired ○○○○○-dong 482-69 ○○○ Building No. 000, and Nos. 000 and 000 of underground floors (hereinafter “instant real estate”) in KRW 0 billion.

B. As a result of the Plaintiff’s investigation on the source of the funds to acquire the instant real estate, the Defendant confirmed the fact that the amount of KRW 00 million out of the funds to acquire the said funds (the amount of KRW 00 million on July 31, 2012, KRW 100 million, and KRW 100 billion on August 10, 2012) was deposited out from the Plaintiff’s account of the Plaintiff’s TradeB and paid to the seller of the instant real estate, and on March 2, 2016, deeming that the Plaintiff was donated from the TradeB, and thus, deemed that the Plaintiff was donated to the Plaintiff on July 31, 2012, KRW 00,000,000, and KRW 00,000,000,000 on the donated portion on August 10, 2012 (hereinafter “instant disposition”).

C. On May 20, 2016, the Plaintiff dissatisfied with the instant disposition and filed a request for an inquiry with the Tax Tribunal, but the Tax Tribunal dismissed the Plaintiff’s request on November 21, 2016.

2. Whether the disposition is lawful;

A. The plaintiff's assertion

Of the real estate acquisition funds of this case, KRW 000,000,000 paid by TradeB was not a donation from NoBB, but the Plaintiff borrowed from NoB.B, and thus, the disposition of this case is unlawful.

B. Relevant statutes

Annex Reference

C. Determination

As seen earlier, insofar as it is revealed that the Plaintiff’s ASEAN paid KRW 00 million, which is a part of the instant real estate acquisition fund, to the extent that the said funds were partially donated to the Plaintiff, this is presumed to have been donated. Therefore, barring special circumstances, such as that the said funds were made for other purpose than a donation, the need for certification thereof is the Plaintiff, the taxpayer.

In light of the following circumstances, the Plaintiff asserted that the above money is a loan, on the ground that there exists a loan certificate (No. 2) made between the Plaintiff and the NoBB, and that there is no reason to receive a gift from NoBB, the Plaintiff is claiming that the above money is a loan, but there is no dispute between the parties, that is, (i) interest-free interest on the loan certificate, and (ii) the time of repayment is indicated as at the time of sale of the instant real estate, and it is difficult to regard the loan certificate as a normal loan transaction; (ii) the above loan certificate is not made before the payment of the money is made, but it is ex post facto made, and it is difficult to regard it as objective material; and (iii) if NoBB succeeds to the instant real estate, it cannot be readily concluded that there is no reason to receive the above money from NoBB, solely on the ground that the Plaintiff’s assertion is insufficient to recognize it as a loan, and there is no other evidence to prove that the above money was made for any purpose other than the payment of the money.

Therefore, the disposition of this case based on the premise that the plaintiff received the above money from NoB, is legitimate, and the plaintiff's above assertion is without merit.

3. Conclusion

Therefore, the plaintiff's claim is dismissed in entirety as it is without merit. It is so decided as per Disposition.