The meaning of Article 29-2(4) of the Inheritance Tax Act

The purport of Article 29-2(4) of the Inheritance Tax Act is that the original donee is not exempt from liability to pay gift tax or treated as non-taxation, but, when the donee returns or re-donates donated property to the donor after the donation of property, gift tax shall not be levied on the return or donation.

Article 29-2 (4) of the Inheritance Tax Act

Plaintiff

Head of the Daegu Tax Office

Daegu High Court Decision 85Gu224 delivered on December 27, 1985

The judgment below is reversed, and the case is remanded to the Daegu High Court.

The grounds of appeal by the defendant litigant are examined.

According to the reasoning of the judgment below, the court below held as follows: (a) as to the tax disposition of this case imposed by the plaintiff on the non-party on Oct. 29, 1984 on Oct. 11, 1985 on the ground that the plaintiff was jointly and severally liable for tax payment; (b) the plaintiff constructed the building of this case and completed the construction permission under the name of the non-party on Oct. 29, 1984; and (c) registered the ownership again in the name of the non-party again on Nov. 1 of the same year; (d) however, the reason why the plaintiff registered the ownership transfer under the name of the non-party was the ownership of the non-party in Daegu City; (e) the non-party was entitled to purchase the building from the non-party in question on Oct. 29, 1984 without constructing the building; and (e) the plaintiff could not receive the registration of ownership transfer in order from the non-party in the name of the non-party under the title of the non-party (the non-party).

However, the purport of Article 29-2 (4) of the Inheritance Tax Act that "if a donor returns or re-donates the donated property (excluding money) to a donor within one year, such property shall not be deemed a donation." It does not mean that the original donee is exempted from liability to pay gift tax, or treated as non-taxation, on the donated property, but where the donee returns or re-donates the donated property to the donor after the donation of the property, it shall not be subject to gift tax again on such return or donation.

The court below's decision that the plaintiff is the actual owner of the building of this case and the registration of preservation of ownership in the name of the non-party can be deemed to have been donated to the non-party to the above non-party who is the title holder under the provisions of Article 32-2 (1) of the Inheritance Tax Act as the registration of title trust, but the plaintiff has to be treated as non-taxation pursuant to Article 29-2 (4) of the Inheritance Tax Act because the plaintiff has returned his title within one year. Thus, the court below's decision that the plaintiff should be treated as non-taxation pursuant to Article 29-2

Therefore, the judgment of the court below is reversed, and the case is remanded to the court below. It is so decided as per Disposition by the assent of all participating Justices.

Justices Park Jong-soo (Presiding Justice)