Only secured liabilities among donated property shall be deducted.

In determining the taxable value of donated property, the amount acquired by the donee shall be deducted from the total amount of donated property as a debt secured by the donated property.

Article 47 of the Inheritance Tax and Gift Tax Act

2016Guhap23609 Revocation of Disposition of Imposition of Gift Tax, etc.

Maa

Cz superintendent of the tax office

March 3, 2017

March 24, 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 imposing KRW 202,383,360 on the gift tax of September 29, 2010 against the Plaintiff on March 8, 2016 is revoked.

1. Details of the disposition;

A. On September 29, 2010, the Plaintiff received 4,000 shares (value assessed 384,000,000 won; hereinafter referred to as “instant shares”) from Leeb, a mother, and died on June 15, 2012.

B. On January 30, 2013, the Plaintiff declared to the head ofq tax office that the taxable value of inherited property is KRW 187,844,918 and that there was no tax base and tax amount due after inheritance deduction. However, on December 2015, the head ofq tax office, upon the inheritance tax investigation, found the shares of this case from the hh investment securities account under the name of the network, to have been returned to the kh investment securities account under the name of the Plaintiff and determined 384,000,000 won as the appraised value of the shares of this case as the value of donated property.

C. On March 8, 2016, the Defendant imposed a gift tax of KRW 202,383,360 on the shares received from the Deceased on September 29, 2010 (hereinafter “instant disposition”).

Facts without any dispute, Gap evidence 1, Eul evidence 1 through 3, the purport of the whole pleadings, and the purport of the whole pleadings

2. Determination on the legitimacy of the disposition

A. The plaintiff's assertion

The Plaintiff assumed the obligation of KRW 400 million to Leeb, at the time of donation of the instant shares, and thereafter repaid the said obligation on behalf of the Deceased. The Plaintiff’s donation of the instant shares in return for taking over the deceased’s obligation constitutes an onerous donation, and thus constitutes a donation with a burden, and thus, the amount of obligation taken over by the Plaintiff should be deducted from the

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Article 47(1) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 11130, Dec. 31, 2011) provides that, in determining the taxable value of donated property, a donee shall deduct the amount acquired by the donee from the total amount of donated property as a debt secured by donated property. Thus, in order to deduct the amount of debt taken over by the Plaintiff from the donated property, the decedent’s obligation to borrow loans to B shall be the debt secured by the instant shares.

2) We cannot accept the Plaintiff’s assertion based on the premise that the above loan obligation is secured by the shares of this case, since there is no evidence to prove that the Plaintiff’s loan obligation on behalf of the deceased was an obligation secured by the shares of this case.

3. Conclusion

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