Whether the case where a marital relationship is substantially broken down at the time of transfer of a house constitutes a case where a spouse is dead or divorced under Article 15(2)2 of the former Enforcement Decree of the Income Tax Act (negative)

In determining whether a “one house for one household” is a non-taxable requirement for capital gains tax, it shall be interpreted that a resident’s spouse is composed of a resident and a household solely based on the fact that the resident’s spouse is living together with the resident and is the spouse, and even if a spouse has a legal spouse at the time of the transfer of the house, even if the marital relationship has actually reached the failure, Article 15(2) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 14467 of Dec. 31, 1994) which assumes the premise that there is no spouse under the principle of strict interpretation of the provisions of tax-related Acts. Thus, it shall not be deemed that one household mentioned above is composed of only one spouse.

Article 5 subparagraph 6 (i) (see current Article 89 subparagraph 3) of the former Income Tax Act (amended by Act No. 4803 of Dec. 22, 1994), Article 15 (1), (2) 2 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 14467 of Dec. 31, 1994), and Article 15 (2) 2 of the former Enforcement Decree of the Income Tax Act (see current Article 154 (1) and (2) 2 of the Income Tax Act)

[Plaintiff-Appellant] Plaintiff 1 and 1 other (Law Firm Doz., Counsel for plaintiff-appellant)

Plaintiff (Law Firm LLC, Attorneys Lee Young-hoon et al., Counsel for the plaintiff-appellant)

Head of Yongsan Tax Office

Supreme Court Decision 97Nu19465 Delivered on May 29, 1998

Seoul High Court Decision 98Nu9365 delivered on September 24, 1998

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

We examine the grounds of appeal.

Article 5 subparagraph 6 (i) of the former Income Tax Act (amended by Act No. 4803 of Dec. 22, 1994; hereinafter referred to as the "Act") provides that "one house for one household as prescribed by the Presidential Decree (excluding high-class houses as prescribed by the Presidential Decree) and any income accruing from the transfer of land attached thereto shall not be imposed on the income." Article 15 (1) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 14467 of Dec. 31, 1994; hereinafter referred to as the "Enforcement Decree") provides that "one house for one household shall be deemed as one house owned by one household and its spouse at the same address or same place of residence, and if the spouse dies or is de facto divorced, it shall be deemed that there is no legal relation between the resident and his spouse at the same time as the other spouse at the same time and the other spouse at the same time." Article 5 (2) of the same Act provides that "No one household shall be deemed as a house without a spouse's consent to 197 years or more.

According to the reasoning of the judgment of the court below, the court below rejected the plaintiff's assertion that the transfer of the house in this case is a transfer of one house for one household on the ground that the case of divorce is limited to the case of legally divorced and the case of de facto divorce is not included in the case of de facto divorce. This decision of the court below seems to have the same purport as the above legal principles, and it does not contain an error of law in the misapprehension of legal principles that affect the conclusion of the judgment like the theory of lawsuit. There is no reason to discuss.

Supreme Court Decision 79Da1344 Decided October 30, 1979 and Supreme Court Decision 92Nu12988 Decided January 19, 1993 cited by the theory of the lawsuit is not appropriate to invoke this case as it differs from this case.

Therefore, the appeal is dismissed and all costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Jae-soo (Presiding Justice)