Whether a gift tax can be imposed when a gift contract is rescinded (negative)

In a tax lawsuit, the base time for determining the illegality of a taxation disposition is the time of the disposition. In the case of acquisition of property by donation, if the relevant gift contract is legally rescinded before the tax authority issues a taxation disposition that makes the gift as a cause of taxation, and if the cancellation registration is made by the cancellation, the effect of the change in the real right arising from the execution of the contract shall be retroactively extinguished, and the gift shall be deemed never to have existed. Therefore, a taxation disposition of gift tax which serves as a cause of taxation shall not be conducted.

Articles 29-2(1) and 34(1) of the Inheritance Tax Act

Supreme Court Decision 87Nu561 Decided July 25, 1989 88Nu10916 Decided September 12, 1989

[Judgment of the court below]

Head of the Gu Tax Office

Daegu High Court Decision 90Gu258 delivered on September 19, 1990

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

We examine the grounds of appeal.

In a tax lawsuit, the time to determine the illegality of a taxation disposition is the time of the disposition. In the case of acquisition of property by gift, if the gift contract is lawfully rescinded before the tax authority imposes a taxation disposition on the gift, and if the cancellation registration is made by the cancellation of the contract, the effect of the change in the real right arising from the execution of the contract shall be retroactively extinguished, and the gift shall not be deemed to have existed from the beginning. Thus, the gift tax disposition, which serves as the reason of taxation, shall not be imposed (see Supreme Court Decision 87Nu561 delivered on July 25, 198; Supreme Court Decision 88Nu10916 delivered on September 12, 1989).

According to the judgment of the court below, the court below found that the above transfer registration of ownership in the plaintiff's name was cancelled on November 10, 198, on the ground that the above transfer registration was cancelled on the ground that the above transfer contract was cancelled on November 10, 1988, the tax disposition of this case was just cancelled before the disposition and the registration of cancellation was made accordingly. The judgment of the court below is just and there is no error in the misapprehension of legal principles as to the validity of the termination of the contract, or in the incomplete deliberation and there is no error in the misapprehension of legal principles as to the conclusion of the contract, and it is not appropriate to the part of the court below (the decision of July 21, 1987) cited in the arguments.

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

Justices Lee Woo-soo (Presiding Justice)