The plaintiff needs to prove that the sales price will properly reflect the market price six months after the commencement date of the inheritance.

Since the sales price is 6 months after the date of commencing the inheritance, there is a need to prove that the plaintiff's assertion that the price properly reflects the market price as of the date of commencing the inheritance, so long as the requirements prescribed in the latter part of Article 60 (2) of the Inheritance Tax and Gift Tax Act and Article 49

Article 97 (Calculation of Necessary Expenses for Transfer Income)

2017Gudan8358 Disposition rejecting capital gains tax rectification

○ ○

○ Head of tax office

October 20, 2017

October 27, 2017

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

Cheong-gu Office

The Defendant’s rejection of correction of KRW 53,916,440 for the transfer income tax belonging to the year 2016 against the Plaintiff on March 16, 2017 shall be revoked.

1. Details of the disposition;

(1) On March 1, 2016, the Plaintiff inherited 1/2 shares (hereinafter “instant land”) out of 8*** Dong*** Dong*** 8*-1* previous 2,388 square meters of her husband’s death.

At the request of SheB, certified public appraisal corporation* and corporation A* certified public appraisal corporation have appraised the market price of the instant land as shown below.

(1) On November 17, 2016, **, ** the ownership transfer registration (sale on September 24, 2016) of the instant land was completed in the name of the Plaintiff**, ****, ** the purchase price of the instant land in September 24, 2016 (=the above********10,000,000 won *******1,000,00 won x 1,000,000 won in the purchase price of the instant land in the previous 2388 square meters x 1/2 of the Plaintiff’s share).

Applicant on November 17, 2016, the Plaintiff made a preliminary return on the transfer income tax for the transfer of the instant land to the Defendant in 2016 as follows, and paid 53,916,440 won at that time.

(v) On February 20, 2017, the Plaintiff filed a request for correction with the Defendant for refund of KRW 53,916,440 for the transfer income tax reverted to year 2016, by asserting that “The transfer income tax base and tax amount were excessive by erroneously applying acquisition value as appraisal value” was applied to the Defendant.

⑹ 피고는 2017. 3. 16. 원고에 대하여 '상속세 및 증여세법 제60조, 같은 법 시행령 제49조에 의거 상속개시 후 6개월을 경과하여 매매가액이 있는 경우에는 시가로 볼 수 없어 그 매매가액을 이 사건 토지의 취득 당시 실지거래가액으로 인정할 수 없다'는 이유로 위 경정청구를 거부하는 '이 사건 처분'을 하였다.

⑺ 원고는 이 사건 처분에 불복하여 조세심판원에 심판청구를 제기하였으나, 조세심판원은 2017. 7. 20. 위 심판청구를 기각하였다.

Facts without dispute over the basis of recognition, Gap evidence 1 through 6, Eul evidence 1, 2 and 3, the purport of the whole pleadings

2. Whether the instant disposition is lawful

(1) According to Article 97(1)1(a) and (5) of the Income Tax Act, and Article 163(9) of the Enforcement Decree of the same Act, where inherited land is transferred, the value assessed under the provisions of Articles 60 through 66 of the Inheritance Tax and Gift Tax Act as of the date the inheritance commences shall be deemed the actual transaction value at the

According to the main sentence of Article 60(1) and (2) of the Inheritance Tax and Gift Tax Act, the value of inherited land shall be based on the market price as of the date commencing the inheritance (date of appraisal), and (2) "market price" means the value generally deemed to be established when transactions are made freely between many and unspecified persons

The latter part of Article 60 (2) of the Inheritance Tax and Gift Tax Act provides that "if there is a sale, appraisal, expropriation, auction or public sale during a period of not more than six months before or after the commencement date of the inheritance (the base date for appraisal) and within six months before or after the commencement date of the inheritance, the sale price (except where it is deemed that the transaction price is objectively unfair due to a transaction with a related party), appraisal price (the average value of appraisal values appraised by more than two appraisal institutions), expropriation price, auction price, public sale price, and public sale price" shall be recognized as the market price in principle.

Meanwhile, according to Articles 60(3) and 61(1)1 of the Inheritance Tax and Gift Tax Act, where it is difficult to calculate the market price as of the commencement date of inheritance, the officially assessed individual land price under the Act on the Public Announcement of Real Estate Values

B. The Plaintiff asserts that the instant disposition, based on a different premise, should be revoked on the following grounds: (a) the sales price of the instant land stipulated in the sales contract concluded on September 24, 2016, which was seven months after the commencement date of the inheritance ( March 1, 2016) was recognized as the market price of the instant land at the time of the commencement date of the inheritance; (b) however, (c) the instant disposition on the other premise should be revoked

The disposition of this case is legitimate in the following point of view, and the plaintiff's assertion of this case is without merit.

○ Transfer Income Tax is imposed on capital gains, so the actual transaction price for acquiring assets referred to in Article 97(1)1 (a) of the Income Tax Act refers to the price actually paid for the acquisition of the assets in order to acquire the assets concerned, and the actual transaction price does not coincide with the market price of the assets concerned. On the other hand, in the case of acquisition of assets by inheritance, it is difficult to say that it is the actual transaction price for the acquisition of assets referred to in Article 97(1)1 (a) of the Income Tax Act, since it does not actually

However, the heir should pay the transfer income tax when transferring the inherited property separately from paying the inheritance tax when transferring the inherited property. In order to calculate the tax base and tax amount of the transfer income tax, the transfer income tax must be calculated, and Article 95(5) of the Income Tax Act and Article 163(9) of the Enforcement Decree of the same Act provide that the amount assessed pursuant to the provisions of Articles 60 through 66 of the Inheritance Tax and Gift Tax Act shall be considered as the actual transaction value of the relevant property and the transfer

Meanwhile, in the first sentence of Article 60(1) and (2) of the Inheritance Tax and Gift Tax Act, the value of the inherited property as of the date of commencing an inheritance shall be based on the market value (the value generally recognized as being constituted when a transaction is made freely between many and unspecified persons). In other words, the market value shall be an objective exchange value formed by a general and normal transaction. In other words, the “market value” should be the value of the inherited property, which is formed by a transaction, ② be formed by a transaction. ③ The transaction shall be general and normal, and ④ an objective exchange value assessed according to the specific status of the property at the time of commencing the transaction should be reflected.

In addition to the above provisions, comprehensively taking account of the latter part of Article 60(2) of the Inheritance Tax and Gift Tax Act and the provisions of Article 49 of the Enforcement Decree of the same Act, the sales price, appraisal price, expropriation compensation price, auction price, public sale price, etc. during the period of not more than 6 months before and after the commencement date of the inheritance is merely an example of representative cases that can be seen as the market price of inherited property. Thus, even if the sale price, appraisal price, expropriation price, auction price, public sale price, etc. are in accord with the provisions of the latter part of Article 20(2) of the Inheritance Tax and Gift Tax Act and Article 49 of the Enforcement Decree of the same Act, it is difficult to recognize them as the market price if the price is different from the sale price, appraisal price, expropriation price, auction price, public sale price, etc. which are formed by general

Article 46 (1) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act provides that "if the transaction value is objectively deemed unfair due to transactions with a related party, etc., the sale value (proviso 1), the appraisal value (proviso 2 (a) which is not suitable for the payment purpose of inheritance tax and gift tax, such as the assessment of the relevant property on the premise that a certain condition is met, the relevant appraisal value (proviso 2 (b)), the appraisal value where a successor or his/her related person fails to appraise the relevant property in its original form as of the base date of appraisal, the auction or public sale value (proviso 3 (a)) where a successor or his/her related person acquires the property paid in kind through an auction or public sale (proviso 3 (c)), or where he/she acquires the property through a free contract as prescribed by the relevant Acts and subordinate statutes after the commencement of auction or public sale (proviso 3 (c)), etc., such price is not in conformity with the concept of "market price, which is not a proper reflection of the objective and objective exchange value before the commencement date of inheritance."

In short, whether the "market price of inherited property" can be recognized as "the objective exchange value formed through the general and normal transaction of the property as of the commencement date of the inheritance," or not it depends on whether it conforms to the requirements prescribed in the latter part of Article 60 of the Inheritance Tax and Gift Tax Act and Article 49 of the Enforcement Decree thereof formally.

○○ In other words, the sales price of KRW 525 million on the sales contract of September 24, 2016 claimed by the Plaintiff is the sales price that has passed six months from the commencement date of the inheritance ( March 1, 2016) and does not correspond to the transaction price where a transaction has occurred during the period of six months before or after the commencement date of the inheritance (the commencement date) as stipulated in the latter part of Article 60 of the Inheritance Tax and Gift Tax Act and Article 49 of the Enforcement Decree of the same Act, but it does not naturally be excluded from the market price as of the commencement date of the inheritance. On the contrary, in order to recognize the sales price as the "market price" only for such formal reasons, it shall be consistent with the concept element of the "market price as of the commencement date of the inheritance."

○ Ultimately, it is problematic whether the sales price alleged by the Plaintiff properly reflects the market price as of the commencement date of inheritance, and the sales price was 6 months after the commencement date of inheritance.

Therefore, as long as the price does not formally meet the requirements prescribed in the latter part of Article 60(2) of the Inheritance Tax and Gift Tax Act and Article 49 of the Enforcement Decree of the same Act, it is necessary for the plaintiff to assert and prove that the price is properly reflected in the market price as of the commencement date of inheritance. However, two appraisal reports prepared for the purpose of submitting it to the tax office at the request of the newBB, which appears to be a person on the part of the plaintiff immediately before the sale of the land in this case, are assessed as KRW 321,186,00 or KRW 317,604,00 on the commencement date of inheritance of the land in this case. It is difficult to conclude that the appraised value is not properly reflected in the market price of the land in this case on the sole basis that the appraised value is much lower than the above sale price. There is no objective

○○ The instant land is located in the development-restricted zone and natural green area. As seen in the land use planning confirmation source (No. 3), the instant land is abutting on the right side of the instant land, i.e., sub-section 2 (breadth 8~10 meters to the right side of the instant land, and the development project is in progress because the said road is designated as an area for building and reconstruction-building improvement of the instant land, and there is only four-lane roads on the left side of the instant land indicated in the Defendant’s letter of reply, and there is only four-lane roads on the front side of the instant land. As the instant land is located in the development-restricted zone and natural green area, it is difficult to readily conclude that the instant land is located in the development-restricted zone and natural green area, and the legal regulation on the development of the instant land is likely to be mitigated, taking into account such subjective circumstances in the buyer’s side, and thus, it is difficult to conclude that the purchase price higher than the present appraisal price is reflected in the “land.”

In assessing the market price of the instant land in an appraisal company, the appraisal company calculated the objective exchange value by comprehensively taking into account the public law regulations, surrounding conditions, the form of land use, etc. as well as the officially announced land price, and as long as there are no special circumstances where there are errors in the appraisal, the arithmetic average of the said appraisal value shall be deemed to properly reflect the “market price, which is the objective exchange value as of the date of commencing the inheritance of the instant land.”

○ On September 30, 2016, the Plaintiff submitted an inheritance tax return (Evidence A8) and entered the sale price at the price of the instant land. However, solely on such circumstance, the said sale price does not constitute “market price stipulated in Article 60(1) and (2) of the Inheritance Tax and Gift Tax Act” (Although the Plaintiff reported a higher amount of the value of the inherited property, the inheritance tax amount falls short of the inheritance deduction amount and did not bear the percentage of the inheritance tax.)

○ The Plaintiff asserts that, in light of the legal principle that regards the assessment value as “market price” even in the case of retroactive appraisal outside the scope of 6 months before and after the date of commencing the inheritance, the above sales value at the time of deviating from the scope of 6 months before and after the date of commencing the inheritance should also be

In the case of retroactive appraisal, only six months have passed since the date of the commencement of the inheritance, and the date of appraisal is the date of the commencement of the inheritance. Thus, since the appraisal is the date of the commencement of the inheritance, the appraisal value should be recognized as the market price as a matter of course in that the market price is reflected in the “market price as of the date of the commencement of inheritance.” However, the sale price claimed by the Plaintiff is not the price at the time of the commencement of inheritance, but the sale price at the time of seven months from the date of the commencement of the inheritance, which is not the sale price at the time of the commencement of the inheritance, but the sale price at the time of the commencement of the inheritance, and in the latter part of Article 60(2) of the Inheritance Tax and Gift Tax Act and Article 49 of the Enforcement Decree of the same Act, the sale price at the time of the commencement of the inheritance

As such, retroactive appraisal is naturally consistent with the concept of "market price" as it is evaluated "market price on the date of commencing the inheritance," the sale price, which is the actual transaction price, may reflect the "market price" and may not be so, so it is completely different from the appraised price by retroactive appraisal.

The core of the discussion is whether the sales price or the appraisal price is within six months before or after the commencement of the inheritance, but whether the sales price or the appraisal price should reflect the "market price on the commencement of inheritance" properly.

In this respect, just because the retroactive appraisal is recognized, the sale price claimed by the plaintiff cannot be deemed to reflect the "market price on the date of commencing the inheritance" as a matter of course, and it is necessary to prove that the above sale contract after six months from the date of commencing the inheritance properly reflects the "market price on the date of commencing the inheritance" and that the above appraisal price is not properly reflected the "market price".

The plaintiff asserts that when both the sale and appraisal were conducted, the transfer margin should be calculated by using the sale price as the actual acquisition price.

The term “actual transaction price” under Article 96(1)1 (a) of the Income Tax Act refers to the historical price actually traded. As such, it is difficult to deem that the actual transaction price under Article 49(1)1 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act is conceptually consistent with the actual transaction price. However, “actual transaction price” under Article 96(1)1 (a) of the Income Tax Act refers to the actual transaction price disbursed by the transferor at the time of the transfer of the relevant asset. On the other hand, the sale price under Article 49(1)1 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act refers to the transfer price of the relevant asset at the time of the transfer by the decedent or heir, and it does not necessarily coincide with the acquisition price in terms of the concept of calculating gains on transfer when a heir transfers inherited property, and only functions as a tool of calculating gains on transfer if the actual transaction price at the time of the commencement of inheritance (6 months from the date of the commencement of inheritance in the above Enforcement Decree) is substantially consistent with the market price at the time of inheritance, and transfer price at the date.

Article 49 (2) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act provides that "in cases where there are two or more values deemed the market value, during the period of six months before or after the commencement date of the inheritance, the value corresponding to the nearest day before or after the commencement date of the inheritance shall be applied."

As seen earlier in detail, in light of the relevant provisions of the Inheritance Tax and Gift Tax Act, it is not important to determine whether the value of inherited property is the value of the sales value or the value of the inherited property, but to determine whether the value properly reflects the “market price on the date of commencing the inheritance”. Thus, it is not good to disregard the appraised value of the two sites above solely on the ground that the sales value claimed by the Plaintiff exists after the lapse of six months from the date of commencing the inheritance.

3. Conclusion

Therefore, the plaintiff's claim is dismissed for lack of reason.