Cho Jae-2016-Seo 2364 ( December 12, 2016)

It is applied to the presumption of donation in the event that a person is incapable of acquiring a certain job or income, etc., even if he does not have a site.

Even if there is a certain occupation or income, if a property is acquired considerably more than the income amount, it is presumed that the property has been donated from the person who has re-existent the property if the source of funds sufficient to obtain is not the site for such property.

Article 45 of the Inheritance Tax and Gift Tax Act: Estimated donation of acquired funds

2017Guhap57257 Revocation of Disposition of Imposition of Gift Tax

○ Kim

O Head of tax office

on 15, 2017

October 27, 2017

1. All of the plaintiff's claims are dismissed.

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

Cheong-gu Office

The Defendant’s disposition imposing gift tax on the Plaintiff on February 5, 2016 shall be revoked in entirety.

1. Details of the disposition;

A. The director of the Seoul Regional Tax Office, from November 3, 2015 to December 21, 2015, conducted an investigation into the source of funds against the Plaintiff (from 2003 to 2012) and applied Article 45 of the Inheritance Tax and Gift Tax Act (hereinafter “Inheritance Tax and Gift Tax Act”) to the portion for which the source of funds is not proven as indicated below, determined that the Plaintiff was donated from KimA and notified the Defendant of the relevant taxation data.

(unit:,000 won)

net

Congress

Items

Details of property acquisition, repayment of debts, etc.

Value;

Fund entry certificate

Presumption of Donation

Date of acquisition

Details

1

Repayment of Obligations

203.07.18

OO-dong O-dong 241 O apartment

1320No. 305 Deposit money for lease on a deposit basis

130,000

54,000

76,000

2

Real estate

204.06.18

OOOOOOO buildings 301 units

Equity 1/2 Acquisition Funds

309,500

271,238

38,262

3

Repayment of Obligations

Above 2004.08

205.2

O. 301 Debt Repayment for O buildings

100,000

100,000

-

4

Real estate

209.05.07

Seoul OOOOOOO apartment 008 Dong 903

1,110,000

1,110,000

-

5

Repayment of Obligations

November 02, 2010

of loans related to the acquisition of OO apartment above

500,000

108,538

391,462

6

Repayment of Obligations

December 28, 2010

Seoul OOOOOO-dong 955-7 Land, Building,

1,000,000

734,000

266,000

7

Repayment of Obligations

201.03.24

payment of gift tax pursuant to the above certificate of real property

320,758

240,000

80,758

8

Real estate

November 29, 2011

Seoul OOOOOO-dong 544-8 Building Construction Funds

893,000

467,344

425,656

9

Repayment of Obligations

2012.01.02

(vi)the repayment of deposits for lease due to the closure of OOO ices;

80,000

1,000

79,000

10

Real estate

November 02, 2012

6)new real estate construction funds

1,028,703

1,028,703

-

11

Repayment of Obligations

Above 2009.01 up to

2012.12

Credit Card Use Price

44,000

44,000

-

12

Financial Property

December 31, 2012

Financial Property

34,625

34,625

-

Total

550,586

4,193,448

1,357,138

B. Accordingly, on February 15, 2016, the Defendant decided to the Plaintiff the gift tax of 6,440,00 won on July 18, 2003, the gift tax of 18,714,620 won on June 18, 2004, the gift tax of 142,84,170 won on November 2, 2010, the gift tax of 184,114,560 won on December 28, 2010, and the gift tax of 5,016,240 won on March 24, 201, the gift tax of 205,75,876,160 won on the gift of 275,60 won on the gift of 29,160 won on the gift of 201, and notified the gift tax of 18,508,700 won on the gift of 19,2012.

In addition, on September 29, 2003, the Defendant donated 1388-21 OOviz center 812 (hereinafter "OOviz center 812") from KimA on September 29, 2003, and reported on September 29, 2003, added 76,00,000 won to the taxable value of donated portion as re-donation; and on December 15, 2010, the Plaintiff reported on December 15, 2010, donated 50,723,579 won to the taxable value of donated portion by KimA on December 15, 2010, added 50,723,579 won to the taxable value of donated portion to the Plaintiff on February 15, 2016, 76,000,000 won as re-donation, 76,000,000 won, 46,465,2016.

C. On May 4, 2016, the Plaintiff filed an appeal with the Tax Tribunal on May 4, 2016. On June 18, 2016, the Tax Tribunal: (a) deemed that there is no value of donated property on the ground that the amount not verified pursuant to Article 34(1) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act is less than 20% of the acquired property; and (b) on the donated portion on December 29, 2011, the Plaintiff additionally recognized the source of the acquisition fund of KRW 21,326,390 (part of the value-added tax refund) from the value of donated property, thereby correcting the tax base and the amount of tax by excluding KRW 21,326,390, and the remainder of the claim was dismissed.

D. After that, the Defendant revoked gift tax on June 18, 2004 among the previous dispositions of this case, and revised KRW 142,844,170 on November 2, 2010 as KRW 136,188,910, KRW 275,876,160 on December 29, 201, KRW 262,054,100, and KRW 164,84,60 on December 15, 2010, respectively (hereinafter “instant previous disposition”).

[Reasons for Recognition] Unsatisfy, Gap evidence 1, 2, and Eul evidence 1 (including each number);

The purport of all pleadings

2. Whether the instant disposition is lawful

A. Summary of the plaintiff's assertion

As the Plaintiff had a certain occupation at the time of each of the instant donations and had considerable income, the provision on the presumption of donation under Article 45 of the Inheritance Tax and Gift Tax Act cannot be applied, and the Defendant must prove that the Plaintiff received each of the instant donations. Moreover, the Plaintiff borrowed approximately KRW 1.65 billion from KimA to February 1, 2016, and repaid approximately KRW 1.2 billion from her mother KimA to her mother. As such, the Plaintiff’s money borrowed from KimA was confirmed to have been donated to the Plaintiff’s source of funds.

B. Relevant statutes

m. Inheritance Tax and Gift Tax Act

Article 45 (Presumption of Donation of Funds, etc. for Acquisition of Property)

(1) Where it is difficult to recognize that the person acquiring a property has acquired the property by his/her own funds when considering the occupation, age, income, property status, etc., as prescribed by Presidential Decree, the funds for acquiring the property shall be presumed to have been donated to the person who acquired the property, and it shall be deemed that

(2) Where it is difficult to recognize that the debtor has repaid (including partial repayment; hereafter the same shall apply in this paragraph) his/her debts with his/her own funds when considering the debtor's occupation, age, income, property status, etc., as prescribed by Presidential Decree, the repayment fund shall be presumed to have been donated to the debtor when the debtor repaid his/her debts

(3) Paragraphs (1) and (2) shall not apply to cases where the funds for acquisition or repayment is less than the amount prescribed by Presidential Decree in consideration of occupation, age, income, property status, etc., and the source of the funds for acquisition or repayment is sufficiently explained.

【Enforcement Decree of the Inheritance Tax and Gift Tax Act

Article 34 (Presumption of Donation of Funds, etc. for Acquisition of Property)

(1) "Cases prescribed by Presidential Decree" in Article 45 (1) and (2) of the Act means cases where the aggregate of the following amounts proved falls short of the value of the acquired property or the amount of repayment of debts: Provided, That where the amount not proved falls short of the smaller of the value of the acquired property or the amount equivalent to 20/100 of the amount of repayment of debts, or 200 million won,

1. The amount of income which has been reported or received the taxation (including the cases of non-taxation or reduction or exemption; hereafter the same shall apply in this Article);

2. The value of inherited or donated property which has been reported or received a taxation;

3. The amount of money or liabilities received in return for the disposal of the properties, and used directly for the acquisition of the properties or the redemption of such obligations;

(2) "Amount prescribed by Presidential Decree" in Article 45 (3) of the Act means the amount determined by the Commissioner of the National Tax Service in consideration of the age, household, occupation, property status, social and economic status, etc. of the funds to acquire the relevant property or the funds to repay the relevant debts within ten years before the date of acquisition of the property or the date of repayment

(c) Fact of recognition;

1) Plaintiff’s earned income

After graduating from the Department of OO of the OO University on February 1994, the Plaintiff earned approximately KRW 266,688,000, while working in the O system services, BB University,CC University, O information system, DD Group, EEE, FFF and Japan, etc. from 1994 to 2012.

2) Plaintiff’s business income

From September 2004 to February 2, 2006, the Plaintiff earned approximately KRW 111,640,000 business income while operating 'OOO' in the name of 'OOO'.

.

3) Plaintiff’s interest income

From March 5, 1996 to June 25, 2003, the Plaintiff obtained interest income of KRW 38,635,721, and approximately KRW 66,00,000 from January 5, 2006 to June 201.

4) Plaintiff’s lease income

A) The Plaintiff obtained a total of KRW 33,227,00 from September 2004 to February 2006 the lease income of KRW 33,227,00 from the lease of 301 OOT building.

B) The Plaintiff leased an O apartment from July 2009 to November 201, 201, thereby gaining a total of KRW 19,000,000 rental income.

C) The Plaintiff asserted that from Jun. 2007 to Jun. 2010, 201, the Plaintiff leased 16,800,000 won (hereinafter “O apartment”) from OO apartment 963 O apartment 101,00,000 (hereinafter “O apartment”) to OO apartment 57,350,000 won in total. On the other hand, the Plaintiff asserted that the Plaintiff leased O apartment to OO from Feb. 2001 to Oct. 2001, leased 11,700,000 won in total, from Jan. 2002 to May 2003, 203, and obtained each lease income of 16,80,000,000 won in total. However, the Plaintiff’s statement under subparagraph 6-1 alone is insufficient to acknowledge it, and there is no other evidence to acknowledge it otherwise.

D) The Plaintiff: (a) from May 2008 to December 2008, 2008, from February 2009 to May 2010; (b) from March 3, 2012 to December 2012, 200, and (c) from around December 3, 2012 to from around February 2012, and (d) obtained a total of KRW 23,00,000 from the lease; (b) on the other hand, the Plaintiff leased No. 812 from around October 2003 to February 2005 to from around February 2005 to leased No. 12,546,00, from around May 200 to around April 207 to from around 00, and there was no other evidence to acknowledge that the Plaintiff leased No. 12,600,000,000 won to each of the Co., Ltd., Ltd.; (c) however, (d) there was a lack of evidence to acknowledge it.

E) The Plaintiff asserted that: (a) the Plaintiff leased Odong real estate ① from March 201 to February 2012, 201, leased 31,080,000 won in total, from January 201 to December 2011, and leased 37,000,000 won in total, from January 201 to July 201, 201 to OO; and (b) leased 4,90,000,000 won in total to OO from December 2011 to February 2012, 2012; (c) however, there is no lack of evidence to acknowledge it otherwise.

5) Plaintiff’s refund of value-added tax

The Plaintiff received approximately KRW 19,676,00 from the Otax secretary around August 2004, and KRW 21,326,390 from the Otax secretary during the period from August 11, 201 to December 14, 2011, and KRW 46,14,440 from the Otax secretary during the period from February 9, 201 to September 20, 2012 as the refund of value-added tax.

6) The plaintiff's other income

From 2003 to 2012, the Plaintiff borrowed KRW 1,043,50,00 from a financial institution; the Plaintiff succeeded to the obligation to refund the lease deposit amount of KRW 1,271,043,00; the Plaintiff received investment returns on securities of KRW 5,000; the Plaintiff owned financial assets of KRW 17,381,00; the Plaintiff acquired real estate proceeds of KRW 1,275,00,000 from a financial institution; there is no dispute between the parties. [Grounds for recognition] There is no dispute over the fact that the Plaintiff acquired the real estate proceeds of KRW 1,275,00 from a financial institution; evidence Nos. 3, 4-1 through 5, 5, evidence Nos. 6-1, 7-2, and 10-2, and the purport of the entire pleadings; and the purport of the entire pleadings.

D. Determination

1) Whether the presumption of gift under Article 45 of the Inheritance Tax and Gift Tax Act is applicable

A) Article 45(1) of the Inheritance Tax and Gift Tax Act provides that where it is difficult to recognize that a person has acquired an asset by his own means by taking account of his occupation, age, income, property status, etc., as prescribed by the Presidential Decree, the acquisition fund of the relevant asset shall be presumed to have been donated to the person who acquired the relevant asset at the time of acquiring the relevant asset. Therefore, the fact of donation of the relevant property, which is a requirement for imposing gift tax, is, in principle, proven by the tax authority. Thus, if the person has a considerable financial power and substantial income at the time of acquiring the property, barring any special circumstance, it cannot be presumed that the portion of the fund required for acquiring the property is donated to another person who failed to clearly present its source, barring any special circumstance. However, if a person, such as a lineal ascendant or spouse, etc., who has no fixed occupation or income, is deemed to have received the said fund from the person who acquired the said property again (see, e.g., Supreme Court Decision 86Nu340, Jul. 222, 1986).

B) In light of the aforementioned legal principles, in full view of the following circumstances revealed by the respective statements and arguments stated in Gap evidence Nos. 8-1, 11, and 12 as well as the overall purport of the pleadings, it is difficult to recognize that the Plaintiff was using financial resources to acquire an asset or to repay an obligation, and it is reasonable to presume that the Plaintiff received a donation from KimA pursuant to Article 45 of the Inheritance Tax and Gift Tax Act.

(1) The Plaintiff’s property or debt repaid from 2003 to 2012 is about 5.5 billion won in total. Of them, about KRW 4.2 billion in total ( approximately KRW 266,68,00 in labor income + approximately KRW 111,640,00 in business income + approximately KRW 104,635,721 in interest income + KRW 132,57,000 in rental income + KRW 132,57,000 in + KRW 19,350,000 + KRW 57,350,000 + KRW 23,000 in + KRW 41,02,390 in total + KRW 196,67,00 in loan + KRW 301,000 in trust property + KRW 301,000 in trust property + KRW 41,000 in 0,301,301 in trust property + KRW 401,3639,23045.

(2) Even if the Plaintiff was born in 1971 and had had a certain occupation from 1994 to 2012, and had earned a considerable amount of income, it is presumed that a considerable portion of the income amount therefrom was consumed in living expenses, childcare expenses, etc. Furthermore, even if such consumption was not considered, the Plaintiff did not vindicate the specific financial source while acquiring approximately KRW 1.3 billion or repaying assets or repaying debts, compared to the income amount.

(3) The Plaintiff’s mother, KimA, donated O real estate ① and OOO business center 812 to the Plaintiff, and managed real estate owned by the Plaintiff instead of real estate, etc., and made a monetary transaction between the Plaintiff. As can be seen after the Plaintiff’s property acquisition or repayment of debts, there seems to have been considerable financial resources to give an additional donation to the Plaintiff.

4) The Plaintiff asserts that since approximately KRW 1.6 billion was borrowed from KimA and repaid continuously, the above loan should be recognized as the source of financing. However, the Plaintiff and KimA did not have any monetary loan contract or the details of repayment of interest, etc., and considering their status relations, it is insufficient to recognize that the Plaintiff borrowed approximately KRW 1.6 billion from KimA and continued to repay them, and there is no other evidence to acknowledge this.

(5) Therefore, in order to reverse the presumption of donation for the portion for which the financial source has not been clearly explained, the plaintiff needs to clarify the source of property acquisition fund separate from the funds presumed to have been donated, and prove that the funds have been used as the acquisition fund of the pertinent property. However, as seen later, there is insufficient proof as to it.

2) Specific determination

A) 76 million won out of the security deposit for OO apartment

According to the purport of Eul evidence No. 3 and the whole pleadings, the plaintiff entered into a lease contract with respect to O apartment around July 18, 2003 and paid KRW 130 million for the deposit money. The plaintiff's mother withdraws KRW 76 million on July 18, 2003 and paid the above deposit money as part of the above deposit money. There is no evidence to support that the plaintiff borrowed the above KRW 76 million from KimA. Therefore, it is reasonable to deem that the plaintiff received the above KRW 76 million from KimA on July 18, 2003.

B) According to the overall purport of the statement and pleading evidence Nos. 391,461,751 out of KRW 500,000,000,000,000 for O apartment acquisition, the Plaintiff received loans of KRW 500,000 from O bank on May 6, 2009 and repaid several occasions on several occasions, and on November 2, 2010, paid the remainder of KRW 400,000,000 in a lump sum of KRW 80,765,00 in the process of repaying the principal amount of KRW 50,00,000,00 KRW 18,367,4444 won in total on seven occasions, it is reasonable to recognize that the Defendant paid KRW 34,69,433,000,000 for the Plaintiff’s business income (O apartment houses), KRW 21700,000,000,000 for monthly income (O29,309,00,0940,00).39.

C) According to the purport of partial entry and pleading as to KRW 266 million out of the amount of redemption of obligation related to Odong real estate ① KRW 1,000,000,000 among KRW 1,000,000,000,000,000 won, the Plaintiff succeeded to the obligation to pay KRW 1,000,000 O bank loans and KRW 95,000,000 as the obligation to pay for the lease deposit. On December 15, 2010, the Plaintiff repaid the above KRW 1,000 on December 28, 2010; the Plaintiff sold O apartment at KRW 73 billion on November 16, 2010; the Plaintiff owned KRW 4,00,000,000,000,000,000,000,000,000,000,000,00,000.

D) According to the purport of subparagraph 8 and the entire pleadings, among the amount of gift tax related to Odong real estate ① gift tax amounting to KRW 320,758,98,00,00, the Plaintiff paid KRW 320,758,980,00 in total, as gift tax, to the Defendant on March 24, 2011 and May 31, 2011, after having received a donation from KimAA, KRW 160,379,49, and KRW 160,758,980 in total, as gift tax; the Plaintiff concluded a lease contract with respect to OO apartment on March 30, 201, and it is reasonable to deem that the Defendant recognized KRW 24,758,980,00 as funding amounting to KRW 240,000,000,000,000,000,000,000 won, and there is no explanation as to the remaining amount of KRW 8085,085,000.

E) According to the purport of the statement and pleading as to KRW 404,329,610 out of KRW 84,200,000, KRW 8030,000, KRW 2030,000, KRW 4030,000, KRW 300,000, KRW 2030,000, KRW 80,000, KRW 406,00, KRW 306,00, KRW 30,000, KRW 30,000, KRW 406, KRW 80, KRW 40,000, KRW 20, KRW 306, KRW 30,00, KRW 80, KRW 300, KRW 300, KRW 400, KRW 200, KRW 300, KRW 3000, KRW 300,00, KRW 300, KRW 300,00, KRW 3030.

F) According to the purport of subparagraph 10 of Paragraph 10 of this Article, among the 80,000,000 won for repayment of deposit for lease deposit, the Plaintiff succeeded to the obligation to pay the lease deposit amount of KRW 80,000,000,000,000,000,000 from the Plaintiff’s financial property as KRW 80,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,00,000,000,00,000,000,00,000,00,000,00,00,00.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.