The burden of proof of donated property

According to Articles 29-4, 34-5, and 9(1) of the former Inheritance Tax Act and Articles 42, 5(1), and 5(2) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 1978, Dec. 30, 1978), the value of donated property shall be based on the current status as at the time of donation, and where it is difficult to calculate the market price at the time of donation, the current status shall be based on the standard market price stipulated in the Enforcement Decree of the Local Tax Act in the case of land. Thus, the tax authority bears the burden of proving the value of donated property at a certain point, not at the time of donation, to claim that the above value of donated property is the same as the market price at the time of donation. The tax authority must actively prove that there was no change in the market price at the time of donation between the date of donation and the date of donation, and the time interval between the date of donation and the date of donation is merely three months or more.

Articles 29-4, 34-5, and 9(1) of the former Inheritance Tax Act (Amended by Act No. 3101, Dec. 5, 1978); Articles 42, 5(1), and 5(2) of the former Enforcement Decree of the same Act (Amended by Presidential Decree No. 9231, Dec. 31, 1978); Articles 29-4 and 9(1) of the Inheritance Tax Act; Article 5 of the Enforcement Decree of the same Act

Plaintiff

The Director of Gangnam District Office

Seoul High Court Decision 83Gu663 delivered on January 31, 1984

The judgment below is reversed and the case is remanded to Seoul High Court.

1. We examine the Plaintiff’s grounds of appeal.

According to the provisions of Article 29-4 of the Inheritance Tax Act (amended by Act No. 3101 of Dec. 5, 1978), which was enforced at the time of donation of this case, gift tax shall be the total value of donated property at the time of donation. Under Articles 34-5 and 9(1) of the same Act and Articles 42, 5(1) and 5(2) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 9231 of Dec. 30, 1978), the value of donated property at the time of donation shall be based on the current status at the time of donation, and if it is difficult to calculate the market price at the market price at the time of donation, the market price at the time of donation stipulated in the Enforcement Decree of the Local Tax Act shall be based on the standard amount of taxation in the case of land. The burden of proving the value of donated property at the time of donation is the defendant, who is the tax office, to claim that the market price at the time of donation had no change.

2. According to the reasoning of the lower judgment, the lower court determined that the Plaintiff’s mother was donated on January 16, 1978, and confirmed that the Plaintiff sold KRW 23,828,00 to the Korea New Co., Ltd. on May 6, 1978, and maintained the Defendant’s disposition imposing the gift tax of this case on the value of donated property at the time of donation, on the ground that the Nonparty’s testimony by the witness, who corresponds to the fact that the time interval between the date of donation and the date of transfer, is less than three months and less than three months, and that there was a sudden change in the price between the date of donation and the date of transfer, may not be believed, and there is no special circumstance to confirm that there was a price fluctuation among them.

However, it cannot be presumed that there was no change in the market price between the date of donation and the date of transfer of the above real estate by the Plaintiff merely because the time interval between the date of donation and the date of transfer thereof is less than 3 months. Thus, if the above transfer price is deemed to be the same as the market price at the time of donation, it should be proved that there was no change in the market price between the date of donation and the date of transfer, and the burden of proof is the Defendant, the tax authority

Nevertheless, the court below recognized the transfer value as the market price at the time of donation on the ground that there is no proof by the plaintiff that there was a price fluctuation between the plaintiff and the burden of proof. Thus, it cannot be said that the court erred by misapprehending the legal principles of the burden of proof on donated property, which affected the conclusion of the judgment.

3. Ultimately, the judgment of the court below cannot be maintained and the arguments are reasonable, and the judgment of the court below is reversed and remanded to the court below for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices.

Justices Lee Lee Sung-soo (Presiding Justice)