Seoul Administrative Court 201Guhap563 ( October 27, 2011)

early 2010west0533 ( October 28, 2010)

Amount of gift tax to be deducted from the amount of inheritance tax calculated shall be calculated before spouse donation deduction.

Where a donee, at the time of commencement of inheritance, becomes unable to receive a spouse deduction because he/she was not a heir at the time of commencement of inheritance due to a divorce, and the amount of the amount of the amount of the amount of the gift tax to be deducted from the amount of the inheritance tax calculated, shall not be the amount of the amount of the gift tax actually paid, but the amount of the tax

2012Nu1292 Revocation of Disposition of Revocation of Inheritance Tax Imposition

DoAA et al.

Head of Guro Tax Office

Seoul Administrative Court Decision 2011Guhap563 decided May 27, 2011

July 25, 2012

September 26, 2012

1. The plaintiffs' claim that the court changed in exchange is dismissed.

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

The judgment of the first instance is revoked. The part of the imposition disposition of KRW 000,000, which the Defendant rendered to the Plaintiffs on June 1, 201, exceeds the amount of KRW 200,000, which was reverted to the year 2007 (the Plaintiff sought revocation of the portion exceeding KRW 00,000, which was initially imposed by the Defendant on the Plaintiffs on November 5, 2009, and the court subsequently modified the purport of the claim as above).

1. Details of the disposition;

A. On October 31, 2005, the Plaintiff’s father HuB donated KRW 000 with land purchase funds (hereinafter “instant donation”) to YCC, which was the spouse at the time of October 31, 2005, and YCC paid KRW 000,000,000, which is calculated by deducting KRW 00,000,000, which is the amount of spouse donation, from the above donation amount, pursuant to Article 53(1)1 of the former Inheritance Tax and Gift Tax Act (amended by Act No. 8828, Dec. 31, 2007; hereinafter “former Inheritance Tax and Gift Tax Act”).

B. After November 16, 2006, HB and HCC shared consultations.

C. The Plaintiff died on August 13, 2007 and succeeded to the property of the PlaintiffB, and the Plaintiffs voluntarily reported and paid inheritance tax to the Defendant on February 13, 2008 with the taxable value of the inheritance and the tax amount of KRW 000,000.

D. On October 5, 2009, the Defendant conducted an inheritance tax investigation with respect to the Plaintiffs, while the gift of this case was made to a person who is not an heir within five years prior to the date of inheritance, added KRW 00,000,000,000 to the value of inherited property on the ground that the donation was made within five years prior to the date of inheritance, and assessed the inheritance value of KRW 853 square meters of the total amount of inherited property in Seocho-gu Seoul Metropolitan Government OO24-10, and assessed the inheritance value of KRW 000,000,000,000,000, which is the difference in the acquisition value of the decedent’s HuB, who is not the reported amount of published land price of KRW 853,00,000,000, which is the difference, to the inherited property value

E. The Plaintiffs were dissatisfied with the above disposition and filed a request for trial with the Tax Tribunal on January 29, 2010, but the said request was dismissed on October 28, 2010.

(f) On October 4, 2010, the Defendant: (a) deemed that the deduction amount for inheritance of financial property was excessively deducted; (b) revised the first increase (tax amount of KRW 000) as indicated below; (c) revaluated the value of inherited property on June 1, 2011; and (d) revised the second increase (tax amount of KRW 00), and (c) on May 23, 2012, the amount of the deductible amount of the gift tax to be deducted at KRW 00 (including additional tax of KRW 00 and additional tax of KRW 000,000, which are the remaining portion after the second increase reduction from the second adjustment to the third reduction; and (d) adjusted the amount of the gift tax to be deducted at KRW 00 (including the first increase and additional tax of KRW 00,000) and the purport of each evidence No. 1 to 4 (including each evidence No. 4) as indicated below.

2. The plaintiffs' assertion and its determination

A. The plaintiffs' assertion

1) The imposition of inheritance tax on KRW 000 out of the value of the gift of this case is against the legislative intent of Article 13 of the former Inheritance Tax and Gift Tax Act or Article 53 of the former Inheritance Tax and Gift Tax Act, which imposes an additional inheritance tax on the portion which was not subject to the gift tax by obtaining a spouse donation deduction under Article 53 of the former Inheritance Tax and Gift Tax Act. As such, in the calculation of the amount of inheritance tax determination, only the amount excluding the above KRW 300 million shall be evaluated as inherited property, while the defendant included

2) In the instant disposition, even if the principal tax portion is lawful, the difference between the tax base based on the initial decision and the reported tax base of KRW 000,000, and the tax base under-reported (00) due to the difference in the value of inherited property, excluding the portion under-reported (00) and the portion under-reported (000), and the portion under-reported (00) due to the failure to apply the spouse donation deduction, and even though the Defendant reported differently, and the Defendant imposed the additional tax on under-reported return, as well as the amount under-reported under-reported (00), and even though the amount under-paid payment was 000 won, the Defendant

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

C Judgment

1) As to the portion of the inheritance tax determined amount

A) Article 13(1)2 of the former Inheritance Tax and Gift Tax Act provides that the value of the property donated by an ancestor shall be added to the value of the inherited property within five years before the commencement date of the inheritance in cases where the taxable value of the inherited property is calculated. This purpose is to maintain the equity between inheritance and gift tax in terms of tax burden by including the value of the property donated by an ancestor before his/her birth in the taxable value of the inherited property as far as possible, and to prevent the act of avoiding the burden of inheritance by dividing and transferring the property to a person other than an heir before the commencement of the inheritance without distinction from the inheritance (see Supreme Court Decisions 93Nu8092, Sept. 28, 1993; 2005Hun-Ga4, Jul. 27, 2006). In light of the foregoing legal doctrine, the Plaintiffs’ assertion that the value of the above property donated by the former wife to 00 won and that of the above property at the time of the commencement of the inheritance should not be accepted, and that part of the property purchased by 00B is its own property.

B) Meanwhile, Article 28(1) of the former Inheritance Tax and Gift Tax Act provides that the amount of the gift tax (referring to the amount of the gift tax calculated on the donated property at the time of donation) shall be deducted from the amount of the inheritance tax calculated. This provision provides that the amount of the gift tax on the donated property added to the inherited property shall be adjusted to the value of the donated property within a specified period from the date of commencing the inheritance, and that the value of the donated property shall be added to the value of the inherited property, without considering the gift tax, which is the basis for calculating the inheritance tax, would result in double taxation of the inheritance tax and gift tax on the same property, or imposition of the inheritance tax on the non-taxable donated property. Therefore, the amount of the gift tax under the above provision provides that the amount of the gift tax is the amount equivalent to the amount of the gift tax calculated on the assumption that it is subject to taxation on the donated property or non-taxable donated property (see, e.g., Supreme Court Decision 77Nu304, Jun. 12, 1979).

2) As to the additional tax portion

A) Even in a case where the assessment of inherited property falls short of the tax base due to the reason that the assessment of inherited property is not provided for in the Framework Act on National Taxes or the former Inheritance Tax and Gift Tax Act, the imposition of additional tax on negligent tax returns cannot be changed, and the fact that the assessment method of the value of inherited property was not properly conducted, and the fact that the assessment method of the value of inherited property was under-reported, does not constitute a case where there is a justifiable reason for the repayment of the additional tax on non-declaration of sentence because it is merely a legal site or misunderstanding (see, e.g., Supreme Court Decision 96Nu16308, Nov. 27, 1998). The circumstances asserted by the plaintiffs are all based on the land or misunderstanding under the law, and thus, it cannot be deemed that there is a justifiable reason for the plaintiffs not to be responsible for any negligence on the duty to report the tax base of gift tax, and the defendant does not accept this part of the tax base amount reported differently from the plaintiffs' assertion.

B) Furthermore, although the plaintiffs asserted that the additional tax on non-payment was calculated excessively, and in addition to the overall purport of the arguments adopted in the above, the plaintiffs' legitimate erroneous payment is recognized as exceeding 000 won of the amount of the additional tax for non-payment determined at the time of the instant disposition, and the plaintiffs' assertion on this part cannot be accepted.

3) Sub-decisions

The instant disposition is lawful within the scope of legitimate tax amount.

3. Conclusion

The plaintiffs cannot accept the claim that the court changed the exchange in this court on the ground that it is reasonable.