Cho High-2017-Seoul Government-1013 (Law No. 19, 2017)

Inheritance Deductions of Guarantee Obligations

The source of funds for acquiring the instant land is the Plaintiff, and the Plaintiff’s efforts to obtain development gains while recognizing the instant land as one’s own ownership, and controls and manages the instant land as the actual owner. As such, the Plaintiff held the title trust of the instant real estate to

Public charges deducted from the value of inherited property under Article 14 of the Inheritance Tax and Gift Tax Act;

2017Guhap81274 Revocation of Disposition of Levying Inheritance Tax

○○ 2 others

○ Head of tax office

1, 2018

6.21

1. On November 17, 2016, the imposition disposition by the Defendant against the Plaintiffs of the Inheritance Tax Act (including additional tax) shall be revoked.

2. The costs of the lawsuit are assessed against the defendant.

Cheong-gu Office

The same shall apply to the order.

1. Details of the disposition;

A. On July 11, 2013, Plaintiff Do○○ is the husband of Park △△△ (hereinafter “the deceased”), who died on July 11, 201, and Plaintiff Do○ and DoB are children between Plaintiff Do○○ and the deceased.

나. 원고들은 2013. 10. 8. 망인의 상속재산에 관하여 한정승인 신고를 하였고, 서울가정법원 2013느단8836호로 한정승인 신고가 수리되었다. 망인의 사망 당시 ○○시 △△읍 □리 475-3 외 9필지(이하 '이 사건 토지'라고 한다)와 서울 ○○구 △△동 1XX-XXXX호(이하 '이 사건 건물'이라 하고 이 사건 토지와 이 사건 건물을 함께 '이 사건 부동산'이라 한다)에 관하여 망인의 명의로 소유권이전등기가 마쳐져 있었는데, 원고들은 이 사건 건물만을 망인의 상속재산으로 신고하고, 이 사건 토지는 망인의 상속재산으로 신고하지 아니하였다.

C. From February 29, 2016 to July 20, 2016, the Defendant conducted a tax investigation with respect to the Plaintiffs. After considering that the instant land should also be included in the value of the Plaintiffs’ inherited property, the Defendant assessed the value of the Plaintiffs’ inherited property (i.e., KRW 3,424,068,068,138 in total (i.e., KRW 3,235,597,70 in the instant land + KRW 188,470,438 in the instant building) on November 17, 2016, and imposed an imposition and collection notice on the inheritance tax (including additional tax) on the amount calculated by deducting the Plaintiffs from the aforementioned amount the sum of the deceased’s inherent obligations and the guaranteed obligations, the amount of KRW 1,840,583,120 in the aggregate (hereinafter “instant disposition”).

D. The Plaintiffs were dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal, but was dismissed on July 19, 2017.

[Ground of recognition] Facts without dispute, Gap evidence 1 through 3, 5, 6 evidence, Eul evidence 1 (including each number), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The parties' assertion

1) The plaintiffs' assertion

A) On December 1984, Plaintiff ○○ acquired the land prior to subdivision including the instant land as well as the income obtained through the private business. The title trust was made by transferring the ownership of the land prior to subdivision in the name of the deceased. Since then, according to the creditorCC’s request, the instant land remaining in the name of the deceased after dividing the shares corresponding to the instant land in accordance with the Seoul Central District Court protocol No. 2002Gadan349472, and transferring the remaining land to thisCC. Plaintiff ○○ was the principal agent, who was given a loan necessary for the development activities of the instant land, thereby providing the instant land as collateral. The deceased was the principal agent, and the Plaintiff, as the principal agent, was the Plaintiff ○○, the husband, who was the husband of the instant land. In other words, the actual owner of the instant land was the Plaintiff ○○○, and thus, cannot be deemed inherited property.

B) Even if the owner of the instant land is the deceased, the amount of debt of the financial institution in the name of the Plaintiff Do○○ was used to develop the instant land, and the amount of loan was granted under the name of the Plaintiff Do○○○○ due to the lending limit. Therefore, the actual use of the loan and the beneficiary of the loan ought to be deemed the deceased. Therefore, the entire amount of the bank loan amounting to KRW 28438,00 should be deducted from the value of inherited property as the inherited property, with the exception of the amount equivalent to the legal share ratio of the Plaintiff Do○○○○’s inheritance among the guaranteed debt of the deceased, the Defendant was unlawful to deduct only KRW 1,840,

C) The Defendant appears to have made the instant disposition on the premise that the instant real estate was owned by the Deceased, and that the Plaintiff ○○○○ was given a loan on the instant land as collateral and withdrawn it. In such a case, the issue of prior donation made before the Deceased’s death is whether it may be taxed on the Plaintiff ○○○○○. Furthermore, the Defendant’s guarantee obligation of the Plaintiff ○○○ in the primary debtor’s branch office should be deducted from the total inheritance share, and in particular, the portion of the instant disposition against Plaintiff DoA and DoB irrelevant to the obligation of the Deceased or Do○○○○.

D) The actual value of the instant land is not the officially announced value or the book value, but the sale price is consistent with the substance over form principle. Since the deceased’s debt exceeds the sale price of the instant land, the Plaintiffs are not liable to pay inheritance tax due to the lack of inherited property.

2) The defendant's assertion

A) Since the instant land was registered under the name of the deceased, it is presumed that it was owned by the deceased, and the fact that the Plaintiff Do○○○ was a title trust in the name of the deceased as the owner of the instant land must be proven by the Plaintiffs. This is insufficient to prove that it was first asserted in the instant lawsuit, and it was insufficient to prove it.

B) The loan made in the name of Plaintiff Do○○ is presumed to be the debtor by Plaintiff Do○, the nominal owner, and accordingly, the fact that the loan was the deceased’s obligation should be proved by the Plaintiffs. It is unclear whether all of the loans secured by the instant real estate were used as the development cost of the instant land, and there is no special circumstance to deem all of the loans secured by the instant land as the deceased’s obligation.

C) As of the date of commencing the inheritance, the Defendant also recognized that the Plaintiff ○○○○○, the primary debtor, was unable to repay his/her debt as of the date of commencing the inheritance, and deducted the amount of the deceased’s guaranteed debt. However, with respect to the amount to be deducted, the amount to be deducted by the Plaintiff ○○○○○, as of the date of commencing the inheritance, cannot be deemed as the obligation for the deceased to be ultimately borne by the deceased, taking account of the fact that the amount of the amount to be deducted is equivalent to KRW 1,315,176,90 [3,424,068,138 - 35,32,020 - 1.5/3.5 of the inheritance portion of the deceased ○○○○○○○, the primary debtor, as of the date of commencing the inheritance - the amount to be deducted from the amount of the inherited property as of the date of deducting the amount of the above inherited property from the amount of KRW 2,80,438,00,00.

D) The permission for sale of the instant land was granted from July 11, 2013, the date on which the inheritance date commences, to the extent that the auction price is not recognized as the market price, and it should be assessed as the officially assessed individual land price pursuant to Article 61(1)1 of the same Act, since it was far more than six months as prescribed by Article 60(2) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 13557, Dec. 15, 2015) from September 3, 2015.

B. Relevant statutes

It is as shown in the attached Form.

(c) Fact of recognition;

1) From October 15, 1984 to ○○○dong, Plaintiff ○○ operated a private business entity as a result of the operation of the private business entity in a liquid book retail business, etc. The deceased did not engage in income activities as a family principal book. From December 18, 1984 to October 22, 1999, the ownership transfer registration was completed in the name of the deceased from October 22, 199 to the deceased’s death. However, at the time of the deceased’s death, the appraised value of the instant real estate was as follows.

2) The details of loans that the Plaintiff ○○○ and the Deceased borrowed from the Seo-gu Seoul Special Metropolitan City on the instant real property as security are indicated below.

3) The details of the amount recognized by the Defendant as the deceased’s obligation at the time of commencing the inheritance are as follows. Of these, the amount calculated by deducting KRW 1,485,261,100, which the Defendant recognized as the guaranteed obligation of the deceased, from KRW 1,315,176,90 (=3,424,068,138 - KRW 355,322,020 (such as loans under the deceased’s name) x 1.5/3.5), which is the value of the inherited property corresponding to the statutory inherited portion of the Plaintiff Branch○, the primary debtor.

4) On February 4, 2013, the instant building was sold at KRW 188,470,438 of the purchase price on November 21, 2013 following a decision to commence voluntary auction (Seoul Western District Court 2013Mata2678) upon the application of creditor Kim Jong-tae (Seoul Western District Court 2013Mata2678). The sale price was insufficient for creditors to repay the creditors’ claims. On June 19, 2014, the instant building was sold at KRW 1,90,05,00 on October 12, 2015 upon the application of creditor Seo-gu Seoul Seoul Special Metropolitan City Cooperatives (Uwon District Court 2014Mata 28953), and the sale of the instant building was completed on November 11, 2015; the sale price was the total of the creditors’ claims, 3,153,245,531 won.

5) On March 21, 2018, this Court prepared and submitted to this Court a written statement with the following content:

○ 원고 지○○가 진술인에게 자신의 여동생의 남편인 김▲▲가 분할 전 이 사건 토지 중 일부를 4,000만 원에 살 수 있다고 소개하였는데 살 의향이 있냐고 묻기에, 당시 원고 지○○를 믿었던 진술인은 위 토지에 가보지도 않고 대금 중 2,000만 원을 우선 지급하였다. 이후 원고 지○○가 나머지 돈은 자신이 부담하겠으니 공동소유로 하자고 하여 그렇게 하였다.

At the time of ○○○, the Plaintiff Do○ intended to register the said land in its name, and later, after being aware of the fact that it was later registered in the name of the deceased, it was understood that the said land could have been opened in the name of the deceased. However, in around 192, it was understood that a provisional registration was made with respect to shares 1/2 of the said land as a result of confirmation of the registry, and that a provisional registration was made for the purpose of preserving shares (1/2 shares) in the said land with the consent of the Deceased and Do○○○○○○○○, the obligor, and the mortgagee, the mortgagee, who made a statement, set up a right to collateral security with his hand, with the intent to preserve shares (1/2 shares) in the said land. Since around 1997, the obligee DD, knowing that ownership of shares 1/2 of the said land was owned by the person who made the statement, set up a collateral for transfer,

○ It was later known that the said land is a fluorial land. The Plaintiff fluortly purchased the state-owned land attached to the fluort side, and started the development of the land, such as obtaining permission for neighborhood living facilities (responding business) through the fluoration work, and it was in the same form as today. DD was made to be paid only some of the costs revealed even if it was fluored and fluored, and it was impossible to pay only one of the hidden costs that were revealed even if it was fluored, and thus, it became clear between Plaintiff fluort and Dod

The Plaintiff ○○○○ had caused many damages in the course of developing the said land. As the said land was not sold, the Plaintiff ○○ was unable to fully recover the development cost or the investment amount due to the auction as the financial costs, taxes, and public charges, etc. were not available, and the said land was sold.

○○○○○ had no apparent source of revenue as a family owner, and used the loan in the name of Plaintiff ○○○○. In the middle, the Plaintiff intended to restore the name of the deceased to its original state in the name of Plaintiff ○○○○○○○○○, but it was judged that there was no way to recover ownership due to the progress of auction. As such, the deceased was aware that it was inherited property upon the death of the deceased, and that it was in the

[Ground of recognition] Facts without dispute, Gap evidence 2, 4, 7, 8, 16, 17, 19 through 21, Eul evidence 2, 4, 7, 8, 19, 19 through 21, the purport of the whole pleadings

D. Determination

1) Whether the Plaintiff ○○○ was title trust on the deceased’s instant real estate

The burden of proof as to the existence of a taxation requirement shall be proved by the circumstances in which the other party is not subject to the application of the empirical rule if the facts alleged to have been presumed to exist in light of the empirical rule. If, under Article 830(1) of the Civil Act, the real estate acquired by one spouse under the sole name of the other spouse is presumed to be the unique property of the nominal owner, and the source of the fund to acquire the real estate is clearly identified to be the same as that of the nominal owner, the nominal owner may be presumed to have received a donation of the fund to acquire the real estate from the spouse. In such a case, the real estate concerned cannot be deemed to have been donated to another spouse because it is not the special property of the nominal owner, but the title trust of the other spouse. In order to reverse the "Presumption of a special property" under Article 830(1) of the Civil Act, the taxpayer shall assert and prove that the other spouse actually borne the price for the real estate concerned and acquired it in order to own it, the presumption of the special property under the name of the other spouse should be determined by considering all other specific circumstances.

As to the land of this case, the registration of ownership transfer was completed in the name of the deceased from December 18, 1984 to the commencement date of inheritance due to the death of the deceased. However, according to the aforementioned facts and the overall purport of Gap evidence Nos. 10-1 and 2, the deceased had no particular income as a professional owner at the time of the acquisition of the land of this case. On the other hand, the plaintiff Do○○○ was receiving business income from operating the business of this case. The plaintiff Do○○ intended to purchase the land of this case before the division from the female her husband. The plaintiff Do○○ acquired more than half of the share of the above land in common with the idea that he would benefit from the development of the above land. The plaintiff Do○○○ acquired the ownership transfer registration of the above land in the name of the deceased, and thereafter the plaintiff ○○○○○ had a construction permit to construct accommodation facilities, and the plaintiff 20D was issued with the Seoul High Court's decision No. 2015, Feb. 16, 20106.

In full view of the above facts and the overall purport of the pleading, the source of the land acquisition fund of this case is Plaintiff Do○○, but Plaintiff Do○○○ was not a donation of the acquisition fund to the deceased on the idea that he would own the land of this case, but it was recognized that Plaintiff Do○○○ himself acquired the land of this case and gained profits therefrom. Plaintiff Do○○○ appears to have controlled and managed the land of this case as the actual owner, recognizing that the land of this case, which was registered under the name of the deceased, was used as a collateral for development activities in accordance with his own decision-making, was used as a loan for the purpose of providing a security, etc. In addition, at the time of the acquisition of the land of this case, it was the time when the Act on the Registration of Real Estate under Actual Titleholder’s Name was enacted on March 30, 195 and enforced on July 1, 195, and it was possible to maintain the registration under the name of the deceased as a title trust for tax avoidance purposes even after the enforcement of the above Act.

Therefore, it is reasonable to view that the instant land was a title trust with the deceased, and therefore, the Defendant’s disposal of the instant land, including the deceased’s inherited property, was unlawful (it appears that the inheritance tax should not be levied on the Plaintiffs if the instant land is not included in the value of inherited property according to the evidence No. 1).

2) If the owner of the instant land is deemed the deceased, the amount of the deceased’s debt to be deducted from the value of the inherited property (domestic judgment)

A guaranteed obligation owed by an ancestor is in an insolvent condition at the time of commencement of the inheritance, so a guarantor, who is the inheritee, should not perform his/her obligation, and even if the principal obligor exercised his/her right to indemnity against the principal obligor, can deduct the amount of obligation from the taxable amount of inheritance taxes. Whether the principal obligor is not in an impossible condition at the time of commencement of the inheritance can generally be determined as if the principal obligor continues to receive a loan for a considerable period of time due to bankruptcy, composition, corporate reorganization, compulsory execution, etc., or business closure, missing, execution of punishment, etc., and there is no possibility that the principal obligor may receive a loan differently, and it is objectively acceptable that the amount of obligation can not be recovered due to the circumstances such as the failure to perform its obligation, etc. (see, e.g., Supreme Court Decision 200Du1287, Jul. 28, 200).

원고 지○○가 2006. 8. 25.부터 2010. 5. 3.까지의 기간 중 서서울☆☆ ☏☏지점에서 대출받은 24억 원에 관하여 망인 명의의 이 사건 부동산에 근저당권이 설정되어 담보로 제공된 사실, 이후 원고 지○○가 위 채무를 변제하지 못하고 이자가 계속하여 늘어나 망인의 사망 당시에는 원고 지○○의 채무액이 2,800,438,000원에 이르렀으며, 원고 지○○가 위 채무를 전혀 변제할 수 없는 상태에 있었던 사실은 피고도 다투지 아니한다.

However, the Defendant did not recognize the deceased’s obligation on the ground that the part corresponding to the Plaintiff’s statutory share in the real property value of the instant case was not an obligation to be ultimately performed by the deceased. However, as long as the Plaintiff ○○○○ was unable to repay the principal obligation of KRW 2,80,438,00 from the Seoul Special Metropolitan City, Seo-gu at the time of the commencement of the inheritance, it is clear that the deceased was in a situation where he was responsible for the principal obligation of KRW 2,80,438,00, which was loans from the Plaintiff ○○○ at the time of the commencement of the inheritance, and it was not possible that he would not be reimbursed for the Plaintiff ○○○○ upon exercising the right to indemnity against the Plaintiff ○○○○ upon exercising the right to reimbursement against the entire principal obligation. As alleged by the Defendant, in order to exclude the amount equivalent

In such a case, with respect to the amount actually inherited by the Plaintiff ○○○○, the primary debtor, could not be deemed to be the status of nonperformance. Therefore, in a case where the instant land is assumed to be the ownership of the deceased, the sum of the value of the instant real estate, which is the deceased’s active property, is KRW 3,155,760,138, and the deceased’s obligation is KRW 3,155,760,020 (i.e., guaranteed liability amount of KRW 2,800,438,4300 + its inherent obligation amount of KRW 35,322,020). As such, the difference between KRW 268,239,980, which is the value of inherited property, may be deducted from the amount of the guaranteed obligation of the deceased on the ground that the Plaintiff ○○○○○, the primary debtor, was not the value of the Plaintiff’s inherited property, and thus, the method of deducting the amount of the guaranteed obligation of the deceased on the ground that it did not constitute the value of inherited property.

Therefore, even if the land of this case is assumed as the ownership of the deceased, it is erroneous in calculating the amount of the surety obligation to be deducted from the disposition of this case.

3. Conclusion

Therefore, the plaintiffs' claims shall be accepted with due reason, and it is so decided as per Disposition.