Suwon District Court-2014-Gu Partnership-61690 ( April 19, 2016)

Early High Court Decision 2014J 3628 ( October 30, 2014)

The propriety, etc. of the disposition of evaluating the mortgaged property by reflecting the amount of the claim secured by such property.

(The same as the judgment of the first instance) Any disposition that assessed and taxed the stocks of the issue on the basis of the larger of the value assessed on the basis of the secured claim amount and the supplementary assessed value with respect to the property for which the mortgage, etc. is created under Article 66

Article 66 of the Inheritance Tax and Gift Tax Act

Seoul High Court 2016Nu45655 Revocation of Disposition imposing gift tax

Gu 00 Foreign Affairs

00 Other than the head of tax office

Suwon District Court Decision 2014Guhap61690 Decided April 19, 2016

November 16, 2016

December 7, 2016

1. All appeals filed by the plaintiffs are dismissed.

2. The costs of appeal are assessed against the Plaintiffs.

The part against the plaintiffs in the judgment of the court of first instance is revoked. The disposition of imposition stated in the separate disposition list against the plaintiffs on May 1, 2014 is revoked (the plaintiff has reduced the claims in accordance with the reduction and correction disposition by the defendants, and accordingly the purport of appeal has also been reduced. In addition, the defendants appealed against the part against the defendants in the judgment of the court of first instance, but the defendants also appealed against the part against the defendants at the court of first instance on the date for the second pleading, which stated that "the plaintiff consented to the withdrawal of part of the plaintiff and withdraw the defendants' appeal" on the date for the third pleading after the court of first instance stated that "the withdrawal of appeal shall be made by mistake," and thus it shall be revoked. However, the provisions on legal acts under the Civil Procedure Act to which the Administrative Litigation Act applies mutatis mutandis under the Administrative Litigation Act cannot be applied, barring special provisions or special circumstances, and thus, the invalidation or revocation cannot be asserted on the ground of defects in declaration of intention such as fraud or mistake (see, e.g., Supreme Court Decision 80Da76, the scope of appeal).).

1. Details of the disposition;

This Court's decision concerning this part is identical to the corresponding part of the judgment of the first instance except for dismissal or addition as follows, and thus, it shall be quoted in accordance with Article 8 (2) of the Administrative Litigation Act and the main sentence of Article 420 of the Civil Procedure Act.

○ 2. 2. 17. 3. 4. 3. 17. 3. 17. 1. 1. 1. 1. 1. 1. 1. 1. 1. 1. 1.

○ 3 pages 1 of the 3th page 1, "W on the plaintiff's www www" is replaced by "W on August 1, 2015", and "W on the plaintiff's www" by "W on the plaintiff's www."

At the end of the three pages 3, the phrase “(Plaintiffqq was married on January 5, 1979 and on May 10, 2010, after consultation was married again on February 20, 2014)” is added to the end of the three pages.

○ 3, 14 pages 14 shall be deleted.

○ 4. Each part from 1st to 3th, 4th to 6th, shall be deleted.

○ 4. 8 pages 8. The following shall be added:

F. Meanwhile, on August 19, 2016 during the trial, the director of the tax office reduced or corrected each gift tax amount on August 19, 2016, as stated in the " List of Disposition 1" column and "Additional Tax" column (hereinafter in this case, "the remaining part after the reduction as above") against Plaintiff r on August 11, 2016 while the trial was in progress, as stated in the "Items of Disposition 1" column and "Additional Tax" column, the director of the tax office oft tax reduced or corrected the transfer income tax amount on August 11, 2016 (hereinafter in this case, "the disposition of imposition of transfer income tax for the remaining part after the reduction as above", and each disposition of imposition of transfer income tax for each of the instant cases and each of the transfer income tax for each of the instant dispositions shall be referred to as "each of the instant dispositions").

○ 4 9 pages (based on recognition) add “Evidence No. 19, No. 6, and No. 7 of A” to column 9.

2. Whether each of the dispositions of this case is legitimate

A. Summary of the plaintiffs' assertion

1) On January 5, 2008, u General Construction entered into a construction contract for the construction of the o-city bus terminal (hereinafter referred to as the “instant building”) around 00:00 Do 000 Do 000,000 land (hereinafter referred to as “the instant building site”) and carried out the construction work and has the claim for construction price of KRW 2,845,969,539 (hereinafter referred to as “the instant claim for construction price”). However, on February 5, 2009, u General Construction entered into a voluntary auction procedure for the instant building site, the instant building was transferred to a Aa and the ownership of the instant building was transferred to the name of the building to be removed. At that time, Pnopller’s claim for construction price was confirmed to be impossible on February 5, 2009, and thus, it should be excluded from net asset value and net asset value per share.

2) The plaintiffqq, the representative director of u comprehensive construction, was merely nominal to the plaintiff rr, the network www, and the plaintiff Kimu without any particular intent, and there was no purpose of tax avoidance.

Therefore, the provision on deemed donation cannot be applied to the title trust of the instant shares.

3) Plaintiff yy transferred the instant shares to 10,000 won per share, which is a type Plaintiff q. This is determined based on the transaction price considering the fact that the instant claim for construction cost was impossible to be recovered. Accordingly, the assignment of the instant shares is not subject to the avoidance of wrongful calculation.

4) Plaintiff r, r, and r, Plaintiff Kimu did not know the specific contents of the title trust, and it was merely lent its name upon Plaintiff qq’s request, and thus did not know that the title trust of the instant shares was subject to gift tax. Plaintiff yy did not know that the transfer of the instant shares was subject to gift tax pursuant to the provision on wrongful calculation. Accordingly, there was any justifiable reason not to mislead the Plaintiffs into neglecting their duty to pay taxes, and thus, the penalty tax portion out of the instant disposition is unlawful.

B. Determination

1) Determination as to the assertion that the instant claim for construction price was impossible to be recovered

The court's explanation on this part is identical to the corresponding part of the judgment of the court of first instance (from 9, 11 to 12, 100). Thus, it is cited in accordance with Article 8 (2) of the Administrative Litigation Act and the main sentence of Article 420 of the Civil Procedure Act.

2) Determination as to the assertion that there was no tax avoidance purpose in the title trust of the instant shares

The legislative purport of Article 45-2 of the Inheritance Tax and Gift Tax Act is to recognize an exception to the substance over form principle to the effect that the act of tax avoidance using the title trust system is effectively prevented, and thus, it is possible to apply the proviso of the same Article only if the purpose of the title trust is not included in the purpose of the tax avoidance, and in such a case, the burden of proving that the purpose of the tax avoidance was not included in the purpose of the title trust lies in the person claiming it (see, e.g., Supreme Court Decision 2003Du13649, Dec. 23, 2004). Therefore, as regards the absence of the purpose of the tax avoidance, the burden of proving that there was another purpose not the purpose of the tax avoidance (see, e.g., Supreme Court Decision 2004Du7733, May 12, 206). However, if the nominal owner who bears the burden of proof was not a superior to the tax avoidance and that there was no tax avoidance at the time of the title trust or tax avoidance in the future, 2004.

In full view of the aforementioned facts and the overall purport of the statements and arguments as stated in the evidence Nos. 8 and 10, the plaintiffs asserted that ① the plaintiffq was nominal trust with the advice that it would be better for the plaintiffq to keep the shares in the name of the neighboring family members, without any specific intention, and the fact that there was a clear other obvious purpose than the tax avoidance. ② The plaintiffqq did not specify the fact that there was a clear purpose not related to the tax avoidance, ② the plaintiffq did not consult with the Roww on May 2010, after resolving the special relationship, there was no reason to conclude that there was no other reason to acknowledge the distribution of the shares of this case to the Row on August 201 and October 201, and there was no reason to conclude that there was no reason to conclude that there was no other reason to hold the plaintiff r's dividends as the 200,000 shares of this case.

3) Determination as to the assertion that the transfer of shares in this case is not subject to wrongful calculation

Plaintiff yy asserts that the transfer price of the instant shares is calculated by considering the fact that the instant claim for the construction cost of the instant case, which was held by u comprehensive construction works, is an impossible collection, and that the instant shares is not an abnormal price that lacks economic rationality, and thus, the instant shares transfer is not subject to the avoidance of wrongful calculation. However, as seen earlier, the fact that the instant claim for the construction cost of the instant case did not fall short of the impossibility of collection is identical to that of the foregoing,

4) Determination as to the assertion on exemption from penalty tax

Under the tax law, penalty taxes are administrative sanctions imposed in accordance with the law in order to facilitate the exercise of the right to impose taxes and the realization of tax claims in cases where a taxpayer violates a return and tax liability prescribed by the law without justifiable grounds, and the taxpayer’s intent and negligence is not considered, and the land or mistake of the law does not constitute justifiable grounds (see, e.g., Supreme Court Decision 2013Du1829, May 23, 2013). The circumstances that the Plaintiffs asserted that the title trust of the instant shares is subject to gift tax, or that the transfer of the instant shares is not subject to capital gains tax in accordance with the unfair calculation regulations, are merely erroneous, and there is no justifiable reason for the Plaintiffs to not properly perform their duty to report and pay. This part of the Plaintiffs’ assertion is without merit.

3. Conclusion

The judgment of the first instance is justifiable. All appeals filed by the plaintiffs are dismissed.

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