applicable to deemed donation because it falls under a monetary free loan.

In case where the proceeds from sale of assets equivalent to one's own shares have been leased to the father without compensation from a related party, it shall be deemed as a donation.

Inheritance Tax and Gift Tax Act Article 41-4

1. The plaintiff's claim is dismissed.

2. Litigation costs shall be borne by the Plaintiff

Cheong-gu Office

The Defendant’s imposition of gift tax of KRW 19,222,00 against the Plaintiff on September 12, 2006 also revoked the imposition of KRW 45,785,870 in the year 2004, and KRW 20,949,910 in the year 2002.

1. Details of the instant disposition

A. On March 27, 2002, the Plaintiff sold 13 lots of land, including 13,30,000,000, to the non-party 1, 4, and the non-party 2,30,000,000 won, which were jointly owned (1/5, 3/5, 4/5, 1/5, 000 of the Plaintiff’s equity interest) with the non-party 1, 200, 300,000 won, and used the entire proceeds to repay the debt to the non-party 2,00 mutual savings and finance companies, etc.

B. On March 27, 2002, the Defendant determined that ○○○○ and ○○○○○ lent money equivalent to their respective shares out of the instant real estate to the Plaintiff, who is his father, free of charge, and that this constitutes a case where money exceeding 100 million won was leased without compensation from a specially related person, and thus, Article 41-4 of the Inheritance Tax and Gift Tax Act was applied.

C. Accordingly, the Defendant calculated KRW 124,200,000 as of March 27, 2002 by applying the interest rate of KRW 9% per annum as publicly notified by the Commissioner of the National Tax Service to the above sales price of KRW 1,380,000,000, and calculated KRW 124,200,000 as of March 27, 2003 and March 27, 2004 by the same method respectively. In light of the fact that the Plaintiff paid KRW 1,050,000 to the ○○○ in 2004, the Plaintiff calculated KRW 29,70,000 as of March 27, 2005.

D. Meanwhile, the defendant calculated the amount of KRW 460,00,000 (2,300,000,000 X 1/5) equivalent to the above real estate sales amount of KRW 460,00,000 (2,30,000,000) in the same manner, and calculated the amount of KRW 41,40,000 as of March 27, 2002 as of March 27, 2003 and the amount of KRW 41,40,00 as of March 27, 2004 and March 27, 2005 in accordance with each of the above donations, and issued a disposition imposing a total of KRW 127,352,960 on the plaintiff on September 12, 206 (hereinafter referred to as the "disposition of this case").

Date of donation;

Amount of gift tax (unit: won)

Total amount (unit: won)

○ ○ Donations

○ ○ Donations

March 27, 2002

14,476,00

4,746,000

19,222,00

March 27, 2002

35,260,190

6,134,990

41,395,180

March 27, 2002

37,166,970

8,618,900

45,785,870

March 27, 2002

9,898,410

11,051,500

20949,910

127,352,960

Facts without any dispute over recognition, Gap's evidence 1 to 4, Gap's evidence 9-1 to 8, Eul's evidence 1 to 4, Eul's evidence 6 and 7, Eul's evidence 12-1 and 2, and the purport of the whole pleadings.

2. Determination on the legitimacy of the instant disposition

A. The plaintiff's assertion

From the beginning, the instant real estate was offered as security for the Plaintiff’s obligation to the non-party ○○ Mutual Savings and Finance Company, and the ○○○○○ and ○○○○ were in the position of the surety. However, the Plaintiff’s economic aggravation, making it impossible to repay the principal and interest of the instant real estate impossible, and furthermore, when the instant real estate was faced with an auction at a low price, the instant real estate was left under an agreement and became an agent for the payment of the Plaintiff’s obligation by subrogation for the Plaintiff’s obligation. Ultimately, ○○ and ○○○○ were only to have acquired the Plaintiff’s obligation as a person who has pledged to secure another’s property to secure another’s obligation on behalf of the Plaintiff, and thus, the instant disposition by the Defendant, which the Plaintiff considered

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

(c) Fact of recognition;

(1) The real estate of this case was originally donated to ○○○, ○○, and ○○, the Plaintiff, and the Defendant confirmed that all of the proceeds from the sale of the real estate of this case was used to repay the Plaintiff’s debt at the time of the initial tax investigation with respect to the Plaintiff, and determined that the total sales amount equivalent to the shares of ○○, and ○○ was donated

(2) Accordingly, the Plaintiff alleged that ○○○○ and ○○ did not receive a donation, but did not borrow the said amount as an interest free of charge, and submitted each loan certificate (as of March 27, 2002, evidence No. 4-2, and No. 3) made between ○○ and ○○○○ and ○○○. The said loan certificate stated that ○○ and ○○ allowed the Plaintiff to use the sales proceeds equivalent to each of the instant shares of the instant real estate to the repayment of the Plaintiff’s loans from the Plaintiff’s mutual saving and finance company, and that only the principal would be returned from the Plaintiff. The Defendant, upon receiving the Plaintiff’s assertion, became subject to the instant disposition.

(3) Meanwhile, the Plaintiff did not pay interest, etc. to ○○○ and ○○○○ after the repayment of the debt to the ○○ Mutual Savings and Finance Company as above. However, on June 21, 2004, when the ○○○○ purchases a parcel of land and a ground building from Nonparty ○○○○○○○, the Plaintiff paid KRW 1,050,000 out of the purchase price to KRW 330-361 out of the purchase price.

(4) The Plaintiff was operating the hospital at the time of the instant real estate disposition, and was economically difficult, but there was no sufficient means to repay, and there was no fact that ○○ Mutual Savings and Finance Company or other creditors applied for auction of the instant real estate.

Evidence A 10-1,2, Evidence A 11, Evidence A 3, Evidence No. 4-1, Evidence No. 5-2, Evidence No. 8-1, Evidence No. 8-4, Evidence No. 9, Evidence No. 10, Evidence No. 15-1, and the purport of the whole pleadings.

D. Determination

In light of the above, although the plaintiff asserted that ○○○ and ○○○ was subrogated to the plaintiff as the surety's surety's obligation, the plaintiff and ○○○○○ and ○○○○○, as seen above, are the vice-party, although the plaintiff and ○○○○ and ○○○○ were in the position of the surety at the time of the repayment of the debt, it was not a direct demand for repayment to ○○○○ and ○○○○ even though they were in the position of the surety's surety at the time of the payment of the debt, but there was no means to pay the plaintiff, and the plaintiff voluntarily asserted that he was sufficient to borrow the above amount without compensation while submitting the loan contract at the time of the tax investigation of this case. In light of the above, it is reasonable to deem that the plaintiff borrowed each share from ○○ and ○○○○ as recognized by the original defendant, and that there was no way to pay interest to ○○○ and ○○○○○, as it was insufficient to do so. Ultimately, the disposition of this case by the defendant on this premise is legitimate.

3. Conclusion

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

Relevant statutes

Inheritance Tax and Gift Tax Act

Article 31 (Gift of Donated Property)

(1) Gift property under Article 2 shall include property belonging to the donee, all articles having economic value capable of realizing in money and all rights in law or in fact having property value.

(2) and (2)

(3) After a share of inherited property of each heir is determined and registered by registration, registration, transfer of title, etc. (hereinafter referred to as "registration, etc.") on inherited property after the commencement of inheritance, the value of property acquired by a specific inheritor in excess of the original share of inherited property through an agreement among co-inheritors with respect to such inherited property in excess of the original share

(c) Property shall include property: Provided, That this shall not apply where the property acquired by redivisions in excess of the original share of inheritance by the deadline for reporting the tax base of inheritance tax under Article 67, or where there are justifiable grounds prescribed by Presidential Decree, such as invalidation or cancellation

(4) Where the donated property (excluding money) is returned by an agreement between the parties concerned within the report period under Article 68, it shall be deemed that the donation had never been made: Provided, That this shall not apply where the tax base and amount of tax were determined pursuant to the provisions of Article 76 before such return.

(5) In case where the donee returns the donated property (excluding money) to the donor or re-donates the donated property to the donor within 3 months after the expiration of the reporting period under Article 68, the gift tax shall not be levied on such returned or re-donate property.

Article 41-4 (Donation of other Profits from Money, Free Loans, etc.)

(1) Where money exceeding KRW 100 million has been leased free of charge or at an interest rate lower than the reasonable interest rate, the amount falling under any of the following subparagraphs shall be deemed the value of donated money of the relevant lender on the date on which the relevant money is loaned. In such cases, where the loan period is not determined, it shall be deemed one year, and where the loan period is at least one year, it shall be deemed that the relevant money has been newly loaned each year on the date following the date on which the first

1. In the case of loans received without compensation, an amount calculated by multiplying the loan amount by the interest rate; and

2. Where a loan is made at an interest rate lower than the appropriate interest rate, an amount obtained by subtracting the amount equivalent to the interest actually paid from the amount obtained by multiplying the loan amount by the appropriate interest rate.

(2) The scope of persons in the special relationship under paragraph (1), the method of calculating money of 100 million won or more, adequate interest rate and other necessary matters shall be determined by the Presidential Decree.

Enforcement Decree of Inheritance and Gift Tax Act

Article 19 (Inheritance Deductions of Financial Property)

(2) For the purpose of Article 22 (2) of the Act, the term "major shareholder or largest investor as prescribed by the Presidential Decree" means the relevant stockholder, etc. in case where the total number of stocks, etc. held by one shareholder or one investor (hereinafter referred to as the "shareholders, etc.") and a person in any of the following relationships is the largest:

1. Relatives;

Article 31-7 (Calculation Method, etc. of Profits from Money Free Loan, etc.)

(1) The term "person in a special relationship" in the main sentence of Article 41-4 (1) of the Act means a person who has lent money and a person who has borrowed money (hereafter referred to as "voluntary loan" in this paragraph) in a relationship under any subparagraph of Article 19 (2). In such cases, "one shareholder, etc." shall be deemed "money borrower, etc.".

(2) Where a person has a special relationship under the provisions of paragraph (1) obtains a loan by several times within one year from the person concerned, the amount of less than 100 million won shall be calculated by adding up the amount of the loan. In this case, the date on which the amount is not less than one hundred million won shall

(3) The term "reasonable interest rate" in Article 41-4 (1) of the Act means the interest rate determined and publicly announced by the Commissioner of the National Tax Service in consideration of the yield of corporate bonds with three-year maturity guaranteed by financial institutions provided for in subparagraph 1 of Article 2 of the Act on Real Name Financial Transactions and Guarantee of Secrecy (hereinafter referred to as "financial

(4) The profit under the provisions of Article 41-4 (1) of the Act shall be calculated on the basis of the date on which money is loaned (referring to the date on which each loan is received, where a loan is made several times)