Cho High Court Decision 2009No4077 ( November 04, 2010)

A spouse deduction shall apply only in case of division within the period for the division of spouse's inherited property.

Division of the inherited property between the deceased and the inheritor can be recognized only through a division trial of the inherited property. Since there is no evidence to find that there exists a reason to extend the time limit for the division of the inherited property by the inheritor, the spouse deduction of the inherited property can be deducted only 50 million won.

2011Revocation of disposition of revocation of imposition of inheritance tax, etc.

Park XX et al.

head of Dongjak-gu Tax Office

August 31, 2011

October 7, 2011

1. All of the plaintiffs' claims are dismissed.

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

The Defendant’s disposition of imposition of KRW 2,403,402,185 of inheritance tax and penalty tax of KRW 234,369,037 against the Plaintiffs on April 8, 2009 shall be revoked.

1. Details of the disposition;

A. On September 2, 1943, the deceased KimA (Death on April 30, 2007) married with the KangB on September 2, 1943, 4 South and North Korea, namely, KimCC (mama), KimD (mama), KimF (2 South), network KimF (3), KimG (ma), Kim H (4), and Kim H (2).

B. The plaintiff HamO is the spouse of the deceased KimF of the deceased Kim F (Death of September 8, 1996) and the plaintiff KimK, KimM, and Kim PP are all children of the deceased Kim F, and the plaintiffs are all successors of the deceased Kim F.

C. On October 29, 2007, the deceased KimA’s successors, including the plaintiffs, filed a return on the taxable value of the deceased KimA’s inheritance at KRW 7,683,489,061, and filed a revised return on December 14, 2009, which was KRW 7,756,291,289. In the case of each real estate listed in the attached Table (1) (hereinafter “instant real estate”), only the shares of the deceased KimF, the plaintiffs, and the deceased KimA among the owners on the registry at the time of commencing the inheritance were included in the inherited property.

D. On September 1, 2008, the Defendant imposed a tax amount of KRW 1,936,908,260 by adding up the penalty tax in bad faith on the amount of inheritance tax reported and paid by the deceased KimA’s heir. On the other hand, the Seoul Regional Tax Service: (a) recognized the shares of KimD, KimE, Kim GG, and Kim H (hereinafter “SI”); (b) recognized the shares of the instant real estate as the property trusted in trust by the deceased KimA as the property of the present real estate; (c) combine the amount equivalent to the shares of the instant real estate of the other inheritors from the original amount of KRW 1,551,258,258 to the value of the inherited property; and (d) deducted the amount of inheritance deduction from KRW 500,00,000; and (c) calculated the amount of return of inherited property, the amount of debts deduction amount, etc. to the Defendant as the additional tax on KRW 12,892,496,025, Apr. 201, 2009>

E. The deceased KimA’s successors, including the plaintiffs, filed an appeal with the Tax Tribunal against the disposition of inheritance tax as stated in the preceding paragraph. On November 4, 2010, the Tax Tribunal rendered a decision to regard the remaining successors’ share in the instant real estate as not property under title trust and to correct the tax base and tax amount by deducting the shares from the inherited property. The defendant corrected the amount of KRW 3,590,273,170 on December 16, 2010 (hereinafter “the disposition of imposition of KRW 2,637,71,220 (including additional tax) remaining after such reduction”).

[Ground of recognition] Facts without dispute, Gap's 1, 2, 4, Eul's 1 through 4, 12, 13, the purport of the whole pleadings

2. Whether the instant taxation disposition is legitimate

A. The plaintiffs' assertion

The instant taxation disposition is unlawful for the following reasons.

1) Since the shares of the deceased KimF and the plaintiffs among the instant real estate are not nominal trust but donated property, it should be deducted from inherited property.

2) The amount of the deceased KimA’s spouse’s deduction on the deceased KimB shall not be KRW 500,000,000, but be KRW 1,670,570,475 per actual inherited property.

(b) Related statutes;

Attached Form (2) shall be as specified in attached Table (2).

C. Determination

In addition to Gap evidence Nos. 7, 8, and 7 and 8, the deceased KimF and the plaintiffs' shares in the real estate of this case are recognized as the property trusted in trust to the deceased KimF. Furthermore, as recognized above, the deceased on April 30, 2007, the deceased on the ground that the deceased on the ground that the deceased on April 30, 2007, the deceased on the inheritance tax and gift tax (amended by Act No. 9269 of Dec. 26, 2008; hereinafter the same shall apply), which was the filing deadline for filing the inheritance tax base under Article 67 (1) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 9269 of Oct. 30, 207), which was six months after May 1, 2008, the deceased on May 1, 2008. According to evidence No. 6, the deceased on the division between deceased KimF and the deceased on the inheritance property can only be recognized as the deceased's inheritance and gift No. 21014.2108.

Therefore, the taxation of this case based on the premise that the deceased KimF and the plaintiffs' share in the real estate in this case were trusted from the deceased KimA, and the spouse's inheritance deduction amount for the deceased KimA's inherited property is KRW 500 million is legitimate.

3. Conclusion

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