Whether Article 15 (14) of the former Enforcement Decree of the Income Tax Act, which is a provision on the disposal of joint inheritance houses, applies to cases where a house jointly inherited is transferred (affirmative)

Article 15 of the former Enforcement Decree of the Income Tax Act (amended by the Presidential Decree No. 14467 of Dec. 31, 1994) which provides for the scope of one house for one household which is the object of non-taxation of capital gains tax shall be deemed as the owner of the house concerned in cases where several persons jointly own one house due to inheritance under paragraph (14) of the same Article: Provided, That in cases where there are two or more heirs with the largest share, the heir with the largest share shall be deemed as the owner of the house concerned: Provided, That in cases where there are two or more heirs with the largest share, the resident of the house concerned, the successor, and the oldest, the owner of the house concerned shall be determined in the order of the person who resides in the house from among such two or more persons, and the above provision of the Enforcement Decree shall apply to cases where a house other than the joint inheritance is transferred, unlike Article 155 (3) of the Enforcement Decree of the Income Tax Act (amended by the Presidential Decree No. 14860 of Dec. 30, 1995).

Article 5 subparagraph 6 (i) (see current Article 89 subparagraph 3) of the former Income Tax Act (amended by Act No. 4803, Dec. 22, 1994); Article 15 (14) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 14467, Dec. 31, 1994) (see current Article 155 (3))

Plaintiff

Head of Nowon Tax Office

Seoul High Court Decision 96Gu37581 delivered on July 11, 1997

The appeal is dismissed. The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

Article 15 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 13896, May 27, 1993; Presidential Decree No. 1467, Dec. 31, 1994; Presidential Decree No. 14467, Dec. 31, 1994) which provides for the scope of one house for one household which is the object of non-taxation of capital gains tax shall be deemed as the owner of the house: Provided, That where several persons jointly own one house due to inheritance under paragraph (14), the heir with the largest share shall be deemed as the owner of the house: Provided, That where there are more than one heir with the largest share, the heir with the largest share shall be deemed as the owner of the house concerned, the successor, and the oldest person shall be determined in the order of the person who resides in the house concerned among the two or more persons, and Article 155 (3) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 14860, Dec. 30, 1995; Presidential Decree No. 2000).

According to the reasoning of the judgment below, the court below acknowledged the fact that the plaintiff succeeded to one third share of the house of this case with the non-party 1 and the non-party 2, who is the plaintiff's mother's mother's death on April 4, 1984, and sold the house of this case with the non-party 1, etc. on August 10, 1993, and the non-party 1, etc. on December 23, 1994. The non-party 1 resided in the house of this case after inheritance, and the defendant has resided in the house of this case after the inheritance, and the transfer of the house of this case does not meet the non-taxation requirement of the house of this case. In determining whether the house of this case is one house for one household as joint inheritance, the plaintiff, the non-party 1 and the non-party 2 are the same as the owner, but the non-party 1 only resided in the house of this case, so the disposition of this case is unlawful in the misapprehension of the legal principles as alleged in the ground for appeal.

In addition, in determining one house for one household, the plaintiff is not deemed as the owner of the house in this case as stated in the judgment of the court below, so long as the plaintiff is not deemed as the owner of the house in this case, it shall not be subject to the separate requirements under Article 6 (1) of the former Enforcement Rule of the Income Tax Act (wholly amended by Ordinance of the Prime Minister No. 505 of May 3, 1995) which provides for the non-taxation requirements, and in addition, in this case where the issue of non-taxation is at issue, it shall not be deemed that the plaintiff is liable to pay capital gains tax on the transfer of the house in this case pursuant to Articles 2 (1) and 56 (2) of the former Income Tax Act (wholly amended by Act No. 4803 of December 22, 1994) which provide for the scope of income distribution and tax liability for the transfer of the house

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the defendant who is the appellant. It is so decided as per Disposition by the assent of all participating Justices.

Justices Park Jong-chul (Presiding Justice)