Whether land category on the public register is subject to non-taxation of capital gains tax, or land not used for actual cultivation (negative)

Even if land on the public register is farmland, the land which is not actually used for farming as of the date of transfer shall not be deemed farmland as of the date of transfer, unless it is in a state of temporary suspension or temporary suspension or temporary suspension, and thus, it shall not be deemed as farmland subject to non-taxation of capital gains tax.

Article 5 (6) (d) of the Income Tax Act, Article 14 (3) of the Enforcement Decree of the Income Tax Act

Attorney Lee Jong-soo et al., Counsel for the plaintiff-appellant and one other

Head of Gwangju District Tax Office

Seoul High Court Decision 88Gu5756 delivered on December 23, 1988

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

The grounds of appeal by the defendant litigant are examined.

1. According to the reasoning of the judgment below, the court below found that the plaintiffs acquired the land of this case on January 14, 1972 and transferred it to the non-party 1 corporation on December 29, 1986 (transfer to the non-party 1 corporation listed in the annexed Table 3 of the judgment below). However, the above lands owned by the plaintiffs were based on factories that emit wastewater to the high ground (such as fiber factories, feed factories, apartment houses, etc.) and there were many factories and living wastewater from 1982 to 6 factories, which were hard to find it difficult for the plaintiffs to see the above 1,000 new factories and wastewater from 196 factories to 6,000, because they were no more than 1,000 new factories and 6,000 agricultural wastewater from 1,000,0000, and they were no more than 1,000,0000 farmland and no more than 1,000 agricultural wastewater from 6,000.

2. However, since the transfer income subject to non-taxation under subparagraph 6 (d) of Article 5 of the Income Tax Act and Article 14 (3) of the Enforcement Decree of the same Act is limited to the transfer income of land cultivated by himself for not less than 8 consecutive years until the transfer date and which is farmland as of the transfer date, even if the public record is farmland, the land whose category is not actually being used for farming as of the transfer date is farmland shall not be considered as farmland as of the transfer date unless it is directly owned by the landowner, or it is temporarily in a state of temporary closure, as long as it is not in a state of temporary suspension.

According to the above facts of the judgment below, since from 1983, a three-year period prior to the transfer of each land owned by the plaintiffs, it was difficult for the plaintiffs to use it as farmland due to the pollution of heavy metal wastewater and waste reclamation, etc., it was not used as farmland at the time of transfer. Thus, the land of this case cannot be deemed as farmland as of the transfer date, unless there are circumstances to deem that there was no unavoidable reason to deem that it was impossible to temporarily close the land during the removal of the cause of the above cause of the farming disability, and it was not by the plaintiffs because it was impossible to use it as farmland as farmland.

Ultimately, the judgment of the court below which determined that only the fact that the court below was unable to farming due to another reason should be deemed farmland as of the date of transfer shall be deemed farmland as of the date of transfer. The judgment of the court below was erroneous and it is reasonable to discuss this point.

3. Therefore, we reverse and remand the judgment of the court below. It is so decided as per Disposition by the assent of all participating Justices.

Justices Kim Sang-won (Presiding Justice) Lee Jong-won (Presiding Justice)