Whether a gift tax is appropriate for the gift tax on a donation made under a status that it is impossible to produce.

Inasmuch as the transfer price of the instant shares cannot be deemed to have been donated to the Plaintiffs solely on the ground that it was impossible to bring a birth, gift tax is lawful.

Article 2 of the Inheritance Tax and Gift Tax Act

1. All of the plaintiffs' claims are dismissed.

2. The costs of lawsuit are assessed against the plaintiffs.

Defendant ○○ Head of the tax office’s imposition of KRW 48,324,750 on September 1, 2006 against Plaintiff ○○○○○○ on the imposition of gift tax of KRW 48,324,750 on October 10, 2006, Defendant ○○ Head of the tax office imposed a gift tax of KRW 14,373,290 on Plaintiff ○○○○○ on October 10, 2006, and Defendant ○○ Head of the tax office imposed a gift tax of KRW 14,29,770 on Plaintiff ○○○ on September 20, 206 (the date of actual imposition is September 14, 2006) on Plaintiff ○○○ on the imposition of gift tax of KRW 14,296,70 on September 205, respectively.

1. Details of the disposition;

The following facts shall not be disputed between the parties, or may be recognized by comprehensively considering the overall purport of the pleadings in each entry of Gap evidence No. 1 and Eul evidence No. 4-1, 2 and 3:

A. On March 21, 2005, the Plaintiffs purchased KRW 551,864,736, and 689,830,920, 00, 000, 00 ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ KRW 1/5 shares, respectively, with respect to 1/5 shares in the name of the Plaintiff Jeong○○○○○○○○.

B. Meanwhile, on the other hand, on April 17, 2005, 100, ○○○ died, and around October 14, 2005, 1,196,000,000 as inherited property (107,000,000 + real estate 422,00,000,000 + other property 666,000,000 + Other property), debts and deduction 1,268,00,000 (150,000,000,000 + public charges, etc. + 118,00,000,000 + 1,000,000,000,000,000, and the inheritance tax return was completed.

C. However, the ○○ Tax Office found the fact that the transfer price of the instant stocks was used as the acquisition fund of the instant real estate acquired in the name of the Plaintiffs, while conducting an inheritance tax investigation on July 2006 with respect to the Plaintiffs and ○○○○. Accordingly, the Defendants having jurisdiction over the Plaintiffs’ domicile determined that the Plaintiffs received the transfer price of the instant stocks from ○○○○ in proportion to the share acquisition ratio of the instant real estate, and imposed the gift tax on July 2005, computed as indicated in the details of imposition of the gift tax pursuant to Articles 2, 26, 55 and 56 of the Inheritance Tax and Gift Tax Act (hereinafter “the instant disposition”).

Details of imposition of gift tax)

Name

Date of Imposition

Taxation and Amount

Credit for Lineal Ascendant

Tax Rate

calculated tax amount

Additional Tax

Amount of final tax

Ma-○

September 1, 2006

275,932,368

30,000,000

20%

39,186,473

9,138,285

48,324,758

Ma-○

October 10, 2006

137,966,184

30,000,000

20%

11,593,236

2,780,057

14,373,293

Ma-○

September 14, 2006

137,966,184

30,000,000

20%

11,593,236

2,703,542

14,296,778

D. On October 30, 2006, the Plaintiffs filed an appeal with the National Tax Tribunal. The Director of the National Tax Tribunal dismissed the Plaintiffs’ appeal on February 14, 2007.

2. Whether the disposition of this case is lawful;

A. The plaintiffs' assertion

In light of the fact that ○○○ had been judged that it is medically impossible for the Plaintiffs to bring a lawsuit, and then transferred the shares of the instant real estate to ○○○○’s will and acquired the shares of the instant real estate with such transfer proceeds, and that ○○○ died due to a long period of time for the Plaintiffs to acquire the instant real estate, the instant transfer proceeds are included in the value of inherited property pursuant to Articles 3(2) and 13 subparag. 1 of the Inheritance Tax and Gift Tax Act, and that the Plaintiffs paid the transfer income tax on the transfer of the instant shares as an heir’s status, the acquisition of the transfer proceeds of the instant shares should be included only in the value of inherited property pursuant to the Inheritance Tax and Gift Tax Act because of private donation or testamentary gift, and it constitutes double taxation. Accordingly, the instant disposition for

(b) Related statutes;

○ Taxables of gift tax under Article 2 of the Inheritance Tax and Gift Tax Act

(1) In case where, owing to a donation by a third party (excluding a donation becoming effective upon the death of a donor; hereinafter the same shall apply), there exists donated property on the donation date falling under one of the following subparagraphs, gift tax shall be levied, pursuant to this Act, on such donated property

1. Where a person who has received a donation of property (hereinafter referred to as " donee") is a resident (including a non-profit corporation, the head office or main office of which is located in Korea; hereafter the same shall apply in this paragraph and Articles 54 and 59), all of the donated property, as a donation, by the resident;

(3) The term "donation" in this Act means a free transfer (including transfer at a remarkably low price) of any tangible or intangible property, the economic value of which can be calculated, directly or indirectly, to another person or an increase in the property value of another person by donation, notwithstanding the name, form, purpose, etc. of the relevant act or transaction.

○ Public imposts, etc. deducted from the value of inherited property under Article 14 of the Inheritance Tax and Gift Tax Act

(1) Where inheritance commences due to the death of a resident, the value or expenses falling under any of the following subparagraphs related to the inherited property shall be subtracted from the value of the inherited property:

1. Public imposts;

Article 28 of the Inheritance Tax and Gift Tax Act

(1) The amount of gift tax (referring to the amount of gift tax calculated on the relevant donated property at the time of donation) on donated property added to inherited property pursuant to the provisions of Article 13, shall be deducted from the inheritance tax amount calculated.

○ Scope of donated property under Article 31 of Inheritance Tax and Gift Tax Act

(1) Gift property under Article 2 shall include property belonging to the donee, all articles having economic value capable of realizing in money and all de facto or de facto rights having property value.

C. Determination

(1) On March 22, 2005, in light of the fact that the plaintiffs acquired shares in the real estate with the proceeds of sale prepared by disposing of Ma○○'s shares on March 22, 2005, and Jung○○○ died on April 17 of the same year thereafter, the transfer proceeds of the shares in this case shall be deemed to have been donated to the plaintiffs in proportion to the ratio of shares in acquiring each of the real estate in this case. Unless there is any evidence as to the fact that Ho○ donated the shares in this case to the plaintiffs, it cannot be deemed that the transfer proceeds of the shares in this case was donated to the plaintiffs in fact by Ho○○ at the time, unless there is any evidence as to the fact that Ho○ donated the shares

(2) In addition, even if the gift tax is imposed on deeming that the transfer price of the instant shares was donated to the Plaintiffs, the instant gift tax is deducted from the inheritance tax amount calculated pursuant to Article 28 of the Inheritance Tax and Gift Tax Act. Moreover, the transfer income tax borne by the Plaintiffs shall be deducted from the value of inherited property pursuant to Article 14(1)1 of the Inheritance Tax and Gift Tax Act, and thus, it cannot be said that the said

(3) Therefore, the instant disposition that the Defendants disposed of by deeming that the transfer price of the instant shares was donated to the Plaintiffs as equal to the acquisition share ratio of the instant real estate was lawful.

5. Conclusion

Therefore, the plaintiffs' claim of this case is dismissed in entirety as it is without merit. It is so decided as per Disposition.