early 2007 Mine4062 (Law No. 21, 2009)

Scope of Request for Payment in Kind

With respect to whether there is a value suitable for paying inheritance tax solely on the ground that the value of the real estate and securities which are the inherited property for which an application for permission for payment in kind has been made exceeds inheritance tax amount, a disposition which does not consider is unlawful.

The contents of the decision shall be the same as attached.

1. The defendant's disposition of non-permission of payment in kind in the inheritance tax on October 1, 2007 of the shares indicated in the attached Form against the plaintiff on October 1, 200

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

The same shall apply to the order.

1. Details of the disposition;

A. As KimA died on October 25, 2006, the Plaintiff and KimCC, KimDD, and KimE, who are their wife and children, jointly inherited property. On February 9, 2007, the Plaintiff voluntarily reported the amount of tax payable to KRW 7,505,658,180, including the non-taxable property value of KRW 5,251,204, public charges, funeral expenses, funeral expenses, and debts, etc. from KRW 20,825,95,870,06, including the gift property value of KRW 7,690,17,487, the inheritance tax amount of KRW 27,505,22,00,06, including the spouse deduction, children deduction, etc.

B. On February 9, 2007, the Plaintiff paid 7,866 won as part of the inheritance tax reported to the Defendant at the same time with the above voluntary declaration and voluntary payment, and applied for permission to pay the remaining inheritance tax in kind to the non-listed shares issued by the Unemployment Co., Ltd. (hereinafter “instant shares”) 287,601 shares (the assessed value per share 25,268 won, total of 7,295,862,168 won).

C. On July 2007, the Defendant conducted an inheritance tax investigation on the basis of the Plaintiff’s above report. As a result, the actual value of the inherited property is KRW 21,340,575,648 as a result of underreporting part of the inherited property or omitting part of the disposal property prior to the commencement of the inheritance and the disposal property prior to the commencement of the inheritance. Of these, the real property and the securities value are KRW 11,842,30,555 (=3,706,680,550 + 7,765,620,000 + 7,765,620,000 + 7,295,870,034 won calculated the total tax amount payable by the deceased’s heir including the Plaintiff as additional tax payment, and notified the deceased’s heir including the Plaintiff of the decision.

D. On the other hand, on July 30, 2007, the defendant ordered the change of the property paid in kind with real estate priority among inherited property, and on August 17, 2007, the plaintiff changed the land on five parcels, other than 3,324m2, and 270,302 shares of this case (the appraised value per share 26,778, total 7,238,146,956).

E. On October 1, 2007, the Defendant: (a) calculated the amount of receipt as to the land on five parcels other than the instant shares 270,302 shares, 14,505 shares (26,778 won per share, total 3,869,554,890 won) and the said FF-land; (b) granted payment in kind; and (c) denied payment in kind for the remaining 125,797 shares (=270,302 shares - 14,505 shares).

F. On October 15, 2007, the Plaintiff appealed to the Tax Tribunal for a tax appeal, and the additional payment was permitted for 367 shares in this case upon the decision of the Tax Tribunal (hereinafter the Defendant’s refusal of payment in kind with respect to 125,430 shares in this case) (hereinafter the Defendant’s refusal of payment in kind with respect to 125,797 shares in this case).

[Ground of recognition] Facts without dispute, Gap's evidence 1 through 4, 6, 7, 8, Gap's evidence 5-1 and 2, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The parties' assertion

With respect to the Defendant’s assertion that the refusal of payment in kind was made lawfully in accordance with the above disposition grounds and relevant Acts and subordinate statutes, the Plaintiff asserts that the refusal of payment in kind should be revoked because it is unlawful because of its deviation from and abuse of discretion, as it is difficult for the Plaintiff to raise financial resources of inheritance tax due to the lack of inherited property having property value other than the shares in this case other than the shares in this case.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

The payment of inheritance tax or gift tax in kind is allowed only when the taxpayer is expected to have a difficulty in preparing for the taxpayer's convenience in cash when it is difficult for the taxpayer to prepare for the inheritance tax or gift tax in cash, among inherited property or donated property, and it is an exception to the principle of monetary payment under the national tax collection. In light of the provisions of the above relevant Acts and subordinate statutes, the head of a tax office shall allow the payment in kind only when the following conditions are met: (i) the value of real estate and securities out of inherited property exceeds 1/2 of the value of inherited property; (ii) the amount of inheritance tax exceeds 10 million won; (iii) the amount of tax paid exceeds the amount of property that can be appropriated for the payment in kind; (iv) the amount of payment in kind is suitable for administration and disposal; and (v) the amount of inheritance tax for which payment in kind may be claimed may not exceed the inheritance tax amount on the value of the real estate and securities which are inherited property, but the head of a tax office may permit the payment in kind even for the excess portion.

In light of the above facts, the shares of this case are shares issued by the No. 11,842,30,555 won, which are 10,670,287,824 won, the value of real estate and securities among the plaintiff's inherited property (21,340,575,648 won ±648 won ± 2). The inheritance tax amount exceeds 10,000,000 won is based on the above facts. Considering the reasoning of arguments in evidence No. 12, it is difficult for the No. 12, a company preceding the preceding day to determine that it is an unlisted corporation composed of 1,842,30,555 won among the plaintiff's inherited property and 11,842,30,000 won, which is 40,0000 won or more of the total shares issued by the company, and it is difficult for the company to determine that the above requirement for permission for payment in kind is 37,070,06% of the inheritance tax payment in kind.

However, in full view of the above facts and the purport of the arguments in Gap evidence Nos. 3, 4, and 7, the defendant, without making a decision as to whether there is a value suitable for paying inheritance tax among real estate and securities that are plaintiff's inherited property, shall be 125,430 shares out of the shares of this case, which are 125,430 shares of this case, for the reason that the amount of inheritance tax payable exceeds the amount of tax payable for the value of the pertinent inherited property or securities, 'the amount of inheritance tax on the value of the inherited property or securities'. It seems that the defendant's disposal of real estate other than the above five shares of the plaintiff's inherited property, which the defendant permitted payment in kind, has no real value of property, such as mortgage, right of lease on a deposit basis, or being used as a road site. In light of the fact that securities which are inherited property of this case are all shares of this case, it is difficult to view that there is no other evidence to acknowledge that the defendant's disposal of the above shares of this case constitutes an abuse of the value of inheritance tax or securities payment in kind.

3. Conclusion

Therefore, the plaintiff's claim of this case is reasonable, and it is decided as per Disposition by admitting it.