Cho High Court Decision 2008west0845 ( October 02, 2008)

Appropriateness of the main disposition by donation of real estate transactions between husband and wife

Property transferred to a spouse shall be presumed to have been donated by his spouse, etc. at the time when the transferor transfers the property.

The contents of the decision shall be the same as attached.

1. The plaintiff's claim is dismissed.

2. The plaintiff shall bear the litigation costs.

The Defendant’s disposition of imposition of gift tax of KRW 97,152,304 against the Plaintiff on December 14, 2007 is revoked.

1. Details of the disposition;

A. The Plaintiff received a claim from thisA from June 2005 on the acquisition of all the real estate acquired in the marriage with this wife only under the name of the Plaintiff, and promised to deliver KRW 600 million to thisA on July 24, 2005, while entering the marital fighting, for the purpose of this issue, after directly remitting KRW 300 million to thisA on August 16, 2005 (this case transferred KRW 300 million to the United StatesB on August 24, 2005). 30 million to be additionally delivered from July 28, 2005 to August 24, 2005, the Plaintiff transferred the proceeds of the successful bid to the United StatesB designated by thisA to use it as the proceeds of the successful bid under the following (b).

B. On August 25, 2005, thisA, along with UCC as a good offices outside UB, paid the price of KRW 1,351,60,000 and the amount of KRW 600 million contributed by UCC as a total of KRW 1,351,60,000 and KRW 680.2 square meters of the same ○○○○○, 27-3, 416.9 square meters, and 27-16, and 27-16,000 square meters of the same (hereinafter referred to as “the site in this case”). On October 21, 2005, thisA entered into an agreement with UCC and UCC on the share of KRW 40,00 in proportion to invested KRW 60,00,000, and thisA completed the registration of ownership transfer.

C. Although thisA tried to sell the instant site to △ case, a new building on the ground of the instant site, and recover the investment money, it continued to delay the sales negotiations for more than one year. From October 2006 to November 2006, thisA had the Plaintiff participate in the sales negotiations, and at the same time, had the Plaintiff acquire 40% shares of the instant site.

D. Until December 2006, the Plaintiff and UCC agreed to acquire 20% of the shares of the instant site 60% owned by UCC at KRW 460,000,000 and thereafter to exercise all sales negotiations by the Plaintiff.

E. Accordingly, the Plaintiff intended to obtain 40% shares of the instant site from the UCC, and 20% shares of the instant site from the UCC, but, in the ParkDD that is designated by the UCC, 60% shares of the UCC owned in the instant site are agreed with UCC by the transfer of ownership to the UCC in a simple manner by completing each registration of ownership transfer in the future of the Plaintiff, and in form, prepares a real estate sales contract that reflects such contents. Based on this, on October 28, 2006, the Plaintiff received the registration of ownership transfer with respect to 60% shares owned by UCC (thisA and UCC reported to the Defendant that they transferred 40% shares of each of the instant site and 20% shares to the Plaintiff on the same day, and paid the transfer income tax expected to have been paid after filing a transfer income tax base on the instant land).

F. However, on December 14, 2007, the Defendant calculated the gift tax base at KRW 796,986,00 and imposed and notified KRW 228,239,680 (including additional tax) on the ground that the Plaintiff acquired 60% shares of the instant site from the UCC, and 40% shares of KRW 79,986,00 in substance on the ground that it was donated, not from the EA, but from the EA. (hereinafter “instant disposition”).

G. On March 6, 2008, the Plaintiff filed a petition with the Tax Tribunal for a trial seeking the revocation of the instant disposition. On October 2, 2008, the Tax Tribunal recognized that the Plaintiff actually paid 460 million won for the acquisition price of the instant 20% shares of the instant land acquired from the UCC. As such, among the instant disposition, it decided to the effect that the Plaintiff excluded 20% shares of the instant land acquired from UCC from the donated property value and would rectify the tax base and tax amount. Accordingly, on October 13, 2008, the Defendant issued a decision to the effect that the gift tax base of the instant disposition should be determined as KRW 431,168,800 and that the amount of the instant disposition should be reduced to KRW 97,152,304 and notified the Plaintiff thereof.

[Ground of recognition] Evidence Nos. 1, 4, and 16 and Evidence Nos. 1, 2 (including number), witness B’s testimony, and the purport of the whole pleadings

2. The plaintiff's assertion and judgment

A. The plaintiff's assertion

In addition to directly remitting KRW 300 million to thisA as gift intention, the plaintiff additionally remitted KRW 300 million to the U.S.B designated by thisA, "the plaintiff shall lend KRW 300 million interest without interest to thisA for about one year, and if thisA subsequently withdraws its investment and profit, it shall immediately return the above KRW 300 million and profit to the plaintiff." As to the share of KRW 40 million in the site of this case acquired by thisA (hereinafter referred to as "share subject to taxation"), the plaintiff agreed to substitute the existing share of KRW 300 million with the contract deposit and pay the balance if the above share is sold, the plaintiff shall ultimately acquire the above share of this case, not with the gift of this case, and the disposition of this case is wholly unlawful, and even if this does not so, the amount of KRW 300 million additionally paid to thisA shall be deemed to be unlawful since the plaintiff deducted the remaining share of this case from the gift tax of this case from the gift tax of this case, which is in excess of the remaining part of the gift tax amount of this case.

(b) Related statutes;

It is as shown in the attached Form.

E. Determination

Article 44(1) and (3)5 of the Inheritance Tax and Gift Tax Act and Article 33(3) of the Enforcement Decree of the same Act stipulate that the value of the property transferred to the spouse shall be presumed to have been donated by the spouse, etc. at the time of the transferor’s transfer of the property, and where it is clearly acknowledged that the property was transferred to the spouse, etc. in return for compensation, and where it is prescribed by the Presidential Decree, it shall be excluded from the value of the property donated to the spouse, as it is not presumed to have been donated. According to the above facts of recognition, it shall be presumed that the Plaintiff’s delivery of KRW 600 million to the Plaintiff is presumed to have been donated to the Plaintiff

However, in addition to the purport of the argument in Gap evidence No. 17, it is difficult to understand that the date of preparation of each letter is stated as "No. 25, 2005.7.25," but it is difficult for the plaintiff to obtain or otherwise obtain a refund of 300,000 won or 30% of the profit from the loan to the plaintiff immediately if the plaintiff borrowed 300,000 won or more from the loan to the plaintiff for about one (1) year, and the plaintiff collected 30,000 won and 30% of the profit from the loan to the plaintiff. In light of the following circumstances acknowledged by the evidence mentioned above, it is difficult to find that the plaintiff and the plaintiff made a written statement in order to strictly distinguish the donation and the loan from each other even though they are married with a couple, or to keep it as evidence, from the perspective of the empirical rule in general marital relations, it is difficult to find that the above written statement was prepared after receiving a tax investigation from the defendant because there is no evidence to prove it public.

Therefore, on the premise that the Plaintiff lent KRW 300 million to thisA, the Plaintiff’s assertion that: (a) the Plaintiff replaced the existing rent of KRW 300 million with the down payment; and (b) the Plaintiff agreed to pay the balance in the event of sale of the said taxable interest; or (b) the Plaintiff agreed to receive the transfer of taxable interest in lieu of the repayment of the refund claim against KRW 300 million lent by the Plaintiff to thisA is without merit.

3. Conclusion

Thus, the plaintiff's claim of this case seeking revocation on the ground that the disposition of this case is illegal is dismissed as it is without merit.