The legality of the imposition of income tax on the ground of the transfer of assets to the trustee

Unlike trust under the Trust Act that establishes a legal relationship that requires a trustee to transfer a specific property right to a trustee or to manage and dispose of such property right for a certain benefit or for a specific purpose, in the case of the registration of ownership transfer under the name of one trustee without receiving any consideration or profit from the form of sale and purchase, the share sale is merely a trade name in the form of the registry, and in the substance of the substance, it is not a profit-making act in the substance of the substance, and thus, the income tax disposition that reported on the transfer of asset is an illegal disposition that violates the substance over form.

Article 14 of the Framework Act on National Taxes and Article 23 of the Income Tax Act

Plaintiff 1 and 2 Plaintiffs, Attorneys Kim Tae-dong, Counsel for the plaintiff-appellant

Deputy Director of the Tax Office

Seoul High Court Decision 81Gu511 delivered on April 14, 1982

The appeal is dismissed.

The costs of appeal shall be borne by the defendant.

The grounds of appeal by the defendant litigant are examined.

According to the reasoning of the judgment below, the court below acknowledged that the forest land of this case was originally owned by the plaintiff clan, the non-party et al. at the time when the land was originally owned by the plaintiff clan, and the title trust was made in the name of the above 7 persons on the land cadastre under the name of the deceased non-party et al. at the time of the land situation, and the registration of ownership transfer was made under the Act on Special Measures for the Registration of Forest Ownership in the name of 10 persons including the plaintiffs among the members of the clan, and again, pursuant to the resolution of the clan on December 6, 1976, the registration of ownership transfer was made under the name of 8 persons including the plaintiff et al. except the deceased and the 2 overseas residents, and the registration of ownership transfer was made under the name of the above 10 persons registered under the name of the above trustee and the registration of ownership transfer was made under the name of the above excluding the deceased and the 10 persons overseas residents, and therefore, the above shares of the plaintiffs were merely a transaction title in the form of the register and did not have any profit from transfer.

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

Justices Kang Jong-young (Presiding Justice)