Article 34-2 of the former Inheritance Tax Act (amended by Act No. 3474 of Dec. 31, 1981) shall apply to the application of the provisions on deemed donation under Article 34-2

The provision on deemed donation under Article 34-2 of the former Inheritance Tax Act (amended by Act No. 3474 of Dec. 31, 1981) shall apply only where there is a special relationship under each subparagraph of Article 41(2) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 10667 of Dec. 31, 1981) between the transferor and the transferee and the transferee. Therefore, even if there is a special relationship under each subparagraph of the same Article between the transferor and the transferee and the legal representative of the transferee, if there is no such special relationship directly between the transferor and the transferee, the provision on deemed donation cannot be applied.

Article 34-2 of the former Inheritance Tax Act (amended by Act No. 3474 of Dec. 31, 1981); Article 41(2) of the former Enforcement Decree of the Inheritance Tax Act (amended by Presidential Decree No. 10667 of Dec. 31, 1982)

[Judgment of the court below]

The director of the tax office.

Seoul High Court Decision 86Gu474 delivered on May 6, 1987

All appeals are dismissed.

The costs of appeal shall be assessed against each appellant.

1. The plaintiff's grounds of appeal are examined.

Examining the reasoning of the judgment below in light of the records, it is just that the court below recognized the appraised value at the time of the acquisition of the new shares by the non-party Korea Trade Co., Ltd. issued by the plaintiff based on its adopted evidence as KRW 828 per share and all of the measures that the plaintiff had sufficient tax payment ability to the plaintiff even though the plaintiff was a minor at the time of the taxation of this case, and there is no error of law such as misconception of facts or litigation due to violation of the rules of evidence.

In addition, according to Article 41 (amended by Presidential Decree No. 10667 of Dec. 31, 1981) of the former Enforcement Decree of the Inheritance Tax Act (amended by Presidential Decree No. 10667 of Dec. 31, 1981), which was enforced at the time of the Plaintiff’s acquisition of new shares of this case, Article 34-2 (2) of the former Enforcement Decree of the Inheritance Tax Act (amended by Presidential Decree No. 10667 of Dec. 31, 1981) provides for the definition of “a person in a special relationship” to which the provision on deemed donation of Article 34-2 of the former Inheritance Tax Act is applicable, and Paragraph 4 of the same Article provides that the above provision shall apply mutatis mutandis to “a person in a special relationship” to which the provision on deemed donation of new shares of this case is applicable. Thus, the court below is just in applying the provision on deemed donation of Article 34-4 of the former Enforcement Decree

2. The defendant's grounds of appeal are examined.

The provision on deemed donation under Article 34-2 of the former Inheritance Tax Act shall apply only to cases where there is a special relationship under each subparagraph of Article 41(2) of the Enforcement Decree of the same Act between the transferor and transferee and his/her legal representative. Thus, even if there is a special relationship under each subparagraph of the same Article between the transferor and transferee, if there is no such special relationship between the transferor and transferee and the transferee, the provision on deemed donation cannot be applied.

Under the same view of the court below, even if there is a special relationship under Article 41 (2) 3 of the above Enforcement Decree between the plaintiff's father and the transferor who acquired the shares of this case on behalf of the plaintiff who is a minor, the court below is just in holding that the above special relationship cannot be seen as between the transferor and the above transferee, and the plaintiff who was the transferee, and there is no error in the misapprehension of legal principles, such as the theory of lawsuit. We are without merit.

3. Therefore, all appeals are dismissed, and the costs of appeal are assessed against each appellant who has lost. It is so decided as per Disposition by the assent of all participating judges.

Justices Lee Jin-Post (Presiding Justice)