A. Whether the transfer of property between a lineal ascendant or descendant is subject to capital gains tax (negative)

(b) Where the transferred asset is not located in the specific area at the time of acquisition, the method of calculating transfer margin;

A. The transfer of property between lineal ascendants and descendants shall be subject to gift tax unless the transfer act does not constitute an exception under each subparagraph of Article 34(3) of the Inheritance Tax Act even if the normal transaction value was paid in return, and it shall not be subject to capital gains tax.

B. Article 115(3) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 12154, May 8, 1987) applies to a specific area at the time of the acquisition of the transferred asset, but where the ratio was not determined, if the transferred asset does not belong to the specific area at the time of the acquisition of the transferred asset, the standard market price according to the above ratio or the conversion method, and both the transfer value and the acquisition value shall be calculated based on the taxation standard amount under the Local Tax Act.

A. Article 34 of the Inheritance Tax Act; Article 60 of the Income Tax Act; Article 115 (3) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 12154, May 8, 1987)

Supreme Court Decision 86Nu576 Decided January 20, 1987, 84Nu244 Decided February 10, 1987, 86Nu654 Decided February 10, 1987, 87Nu178 Decided November 24, 1987

[Judgment of the court below]

Director of the tax office

Seoul High Court Decision 86Gu1234 delivered on April 10, 1987

All appeals are dismissed.

The costs of appeal shall be assessed against the plaintiff and each defendant.

1. As to the ground of appeal by the Plaintiff’s attorney:

Articles 23(4) and 45(1)1 of the Income Tax Act provide that the transfer price and acquisition price shall be based on the standard market price at the time of transfer and acquisition of the relevant assets in principle in determining transfer income: Provided, That in cases prescribed by the Presidential Decree, the transfer price and acquisition price shall be based on the actual transaction price of the relevant assets. Article 170(4) of the Enforcement Decree of the Income Tax Act provides that a transferor under subparagraph 3 may confirm the actual transaction price at the time of transfer and transfer by documentary evidence submitted by the transferor at the time of the preliminary return of transfer margin or the final return of tax base under Article 95 or 100 of the Income Tax Act; Article 82-2(4) of the Enforcement Decree of the Income Tax Act provides that the actual transaction price at the time of transfer shall be confirmed by documentary evidence submitted by the transferor to the head of the competent tax office before the final return of transfer margin under Article 146 of the Enforcement Decree of the Income Tax Act shall be determined by the comprehensive transaction price.

The court below's rejection of the sales contract (No. 6-1) submitted by the plaintiff as data that the plaintiff sold to the land in its decision to four million won is acceptable, and there is no doubt as to the violation of the rules of evidence, such as the theory of lawsuit. Therefore, the court below is justified in calculating capital gains based on the standard market price without based on the actual transaction price, as long as it is impossible to verify the actual transaction price at the time of transfer because the evidential documents submitted by the plaintiff before the period for the final return on tax base are not reliable. The court below did not err by misapprehending the legal principles of Article 82-2

2. As to the grounds of appeal by Defendant Litigation Performers:

(1) Article 34(1) of the Inheritance Tax Act provides that the property transferred to a lineal ascendant or descendant shall be deemed to have been donated to the transferor at the time of transfer of the property in question by the transferor, and provides that the transfer of property among lineal ascendant or descendant shall be deemed to have been donated to the transferee. Therefore, even if the normal transaction value was paid in return, the transfer of property between lineal ascendant or descendant shall be subject to gift tax unless the transfer act does not constitute an exception under each subparagraph of paragraph (3) of the above Article, and it shall not be subject to capital gains tax.

According to the reasoning of the judgment of the court below, the court below determined that the plaintiff's ownership of 1/2 of the share on the 182 square meters prior to Gangnam-gu Seoul ( Address omitted) was illegal to impose the transfer income tax on the plaintiff's son, after confirming that the plaintiff completed the registration of ownership transfer based on sale and purchase by the plaintiff's son pursuant to Article 34 (1) of the Inheritance Tax Act, separate from the imposition of the gift tax pursuant to Article 34 (1) of the Inheritance Tax Act. Thus, the above judgment of the court below is just and it cannot be said that the court below erred by misapprehending the legal principles of Article 34

(2) Article 115(3) of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 12154, May 8, 1987) provides that the standard market price at the time of acquisition shall be the value converted according to the method prescribed by the Ordinance of the Ministry of Finance and Economy if assets in a specific area under Article 115(1)1(a) of the Enforcement Decree of the Income Tax Act do not have the ratio to the specific area at the time of its acquisition. This provision applies in a case where the transferred assets belong to a specific area at the time of its acquisition, but where the transferred assets did not have the ratio, the standard market price according to the above ratio or the conversion method shall not be applied in a case where the transferred assets are not located in the specific area at the time of its acquisition, and both the transfer value and the acquisition value shall be calculated according to the taxation standard market price

The court below is just in holding that the defendant's calculation of the acquisition value of the three lots in the decision that the plaintiff was not located in the specific area at the time and there was no determination of the rate of the rate, by the method prescribed by the Ordinance of the Ministry of Finance and Economy under Article 115 (3) of the Enforcement Decree of the above Act, and there is no error of law by misunderstanding the legal principles of the

Therefore, the appeal is dismissed, and the costs of appeal are assessed against each appellant. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Jong-chul (Presiding Justice)