Plaintiff 1 and one other (LLC, Kim & Lee LLC, Attorneys Kim Gyeong-il et al., Counsel for the plaintiff-appellant)

Yeongdeungpo Tax Office (Attorney Process Intervention)

June 19, 2015

Seoul Administrative Court Decision 2014Guhap62630 decided November 7, 2014

1. All appeals filed by the plaintiffs are dismissed.

2. The costs of appeal are assessed against the Plaintiffs.

1. Purport of claim

The Defendant’s disposition of imposing inheritance tax of KRW 540,781,690 (including additional tax) against the Plaintiffs on November 1, 2013 is revoked.

2. Purport of appeal

The part of the judgment of the court of first instance against the plaintiffs shall be revoked. The part of the disposition imposing KRW 540,781,690 (including additional tax) on the plaintiffs on November 1, 2013 is revoked. The part of the disposition imposing KRW 529,356,210 (including additional tax) is revoked.

1. Details of the disposition;

This part of the judgment of the court of first instance is the same as the entry between Chapters 9 through 16, and thus, it shall be quoted in accordance with Article 8(2) of the Administrative Litigation Act and the main sentence of Article 420 of the Civil Procedure Act.

2. Whether the instant disposition is lawful

A. The plaintiffs' assertion

In light of the fact that the conclusion of an insurance contract takes effect upon the occurrence of an insurance accident, and that the insurance contract in this case is an insurance contract to which the fixed fund is paid, the entitlement to the fixed fund takes place on the date of conclusion of the contract, the right to refund the right to the fixed fund is incompatible with the right to receive the repayment of premium due to the cancellation of the insurance contract and the right to refund the premium due to the cancellation of the subscription to the fixed fund is against the principle of no taxation without law, even if the right to the fixed fund has not been determined as the entitlement to the payment of premium and the right to refund the premium has not been created, it goes against the principle of no taxation without law. Inheritance tax is a tax in the method of imposing inheritance tax, which has already been 15 days in advance, so it is impossible for the Plaintiffs to manipulate the inheritance tax base by receiving the premium from the fixed fund and the right to refund the premium during the period of cancellation of subscription, and there is no express provision that allows the Plaintiffs to specify the right to receive the fixed fund and the right to refund the premium as the object of taxation.

(b) Related statutes;

It is as shown in the attached Table related statutes.

(c) Fact of recognition;

(1) According to the product summary, insurance policy, and terms and conditions of the instant insurance contract, the following are stipulated.

In the form of annuity ○○ Pension Payment: (a) summary of insurance products in the table included in the main sentence, insurance policies, and terms and conditions of the insurance; (b) life pension payment type - insurance benefit payment type out of the life pension - insurance term chosen by the contractor during the period of monthly or every year during the period of living chosen by the contractor during the period prior to the commencement of the pension; and (c) pension payment type if the insured lives on the relevant day during the period of annual pension after the commencement of the pension. The amount of living fund payment - The relevant amount of living fund calculated by multiplying the accumulated premiums as at the starting of the pension payment - the amount of the pension payment amount calculated by multiplying the accumulated premiums as at the starting of the commencement of the pension payment - the amount of the insurance contract calculated by the installment ratio of the life pension payment: the insurance contract shall be concluded with the consent of the policyholder and the insurance company; (c) the period of insurance period prior to the commencement of the pension payment period from the date of the contract to the date corresponding to the date on which the subscription is terminated within 15 days after the termination of the subscription.

(2) The period of cancellation of order under the instant insurance contract, and the refund money for cancellation as of June 18, 2012, etc. are as follows.

On June 5, 2012, June 2012, 2012, the period for cancellation of order, which is June 5, 2012, June 2012, 201, included in the main sentence, is 514,304,53 won 475,826,140 won, 475,889,748 won 475,826,140 won, June 5, 2012, June 14, 2012;

[Ground of recognition] Unsatisfy, entry of Gap evidence 3 through 6 (including virtual number), the purport of the whole pleadings

D. Determination

(1) Article 7(1) of the former Inheritance Tax and Gift Tax Act provides that “The inherited property includes all things belonging to the decedent and having economic value that can be converted into money and all de facto or de facto rights having property value.” Article 60 of the same Act provides that “The value of the property on which inheritance tax is levied under this Act shall be the market value as of the date the inheritance commences. The market value shall be the value that is generally recognized as being established when a free transaction is made between many and unspecified persons. In cases where it is difficult to calculate the market value, the value assessed by the method prescribed in Articles 61 through 65 shall be deemed as the market value, taking into account the type, scale, transaction circumstances, etc.

(2) In light of the above facts and other various materials revealed in the pleading, it is reasonable to view that the amount equivalent to the insurance premium paid by the deceased non-party 1 is the market price of the rights or status under the insurance contract of this case where the plaintiffs inherited, and the disposition of this case on the premise thereof is lawful.

① The deceased Nonparty 1 paid all the instant insurance premiums in lump sum, acquired rights under each of the instant insurance contracts, and succeeded to the Plaintiffs. At the time of entering into the instant insurance contract, the deceased Nonparty 1 was applying the same insurance premium as to the instant insurance contract, and it was possible to enter into the instant insurance contract with an insurance company by paying the amount equivalent to the said insurance premium in lump sum to an unspecified number of unspecified persons, and concluded the instant insurance contract with the insurance company. Therefore, it is reasonable to view that the amount equivalent to the said insurance premium falls under the value of rights or status under the instant insurance contract, which is generally recognized to

② At the time of June 18, 2012, the assessment base date of the instant insurance contract, when 20 days have not passed since the deceased non-party 1 entered into the instant insurance contract, and there is no circumstance to deem that the assessed value of the rights under the instant insurance contract has fallen between the conclusion date of the instant insurance contract and the assessment base date.

3. Conclusion

Therefore, the plaintiffs' claim of this case shall be dismissed in its entirety on the grounds of its ground. However, the judgment of the court of first instance shall be partially accepted the plaintiffs' claim with different conclusions, and the part of the disposition of this case shall be revoked, but only the plaintiffs appealed shall not change the judgment disadvantageous to the plaintiffs under the principle of prohibition of disadvantageous alteration. Thus, the plaintiffs' appeal shall be dismissed and it is so decided as per Disposition.

[Attachment]

Judges Cho Jong-tae (Presiding Judge)