Cheongju District Court 2009Guhap978 ( November 19, 2009)

Cho High Court Decision 2008 Jeon 4031 (Law No. 902.06)

Whether title trust is held where a successful bid is permitted under the title trust agreement;

Even if the purchase price is paid in full with the permission of successful bid in the name of the plaintiff under the title trust agreement, ownership of the auction land and building shall be acquired by the plaintiff, regardless of whether or not the purchase price is paid, and the title trust agreement constitutes invalid under the Act on the Registration of Real Estate under Actual Titleholder

1. Revocation of a judgment of the first instance;

2. The plaintiff's claim is dismissed.

3. All costs of the lawsuit shall be borne by the Plaintiff.

Purport of claim and appeal

The Defendant’s disposition of imposition of capital gains tax for the year 1997 against the Plaintiff on May 8, 2008 (the Defendant initially issued a disposition of imposition of capital gains tax of KRW 64,461,070, but subsequently revoked the disposition of imposition of KRW 10,123,221 on two occasions by two times of reduction and correction, and thus only revoked the disposition of imposition of KRW 54,37,849.

Purport of appeal

It is the same as the disposition.

1. Circumstances of the disposition;

A. On February 6, 1997, the auction procedure for the auction of real estate was initiated with the Cheongju District Court as to the land of 177-17 square meters and 693 square meters (hereinafter “the auction land of this case”) of Cheongju-si, Cheongju-si, 177-17, and 0.45 Kanam-ro, the above ground-based light-frame 137.9 square meters (hereinafter “the building of this case”) and 137.9 square meters of the above ground-based neighborhood living facilities (hereinafter “the building of this case”). On April 1, 1997, the auction land and building of this case were awarded to the Plaintiff for KRW 85,590,000, and the registration of ownership transfer was completed on April 1, 1997.

B. On October 23, 1997, the auction land of this case was divided into 177-17, 177-17, 533, 177-19, 22, 177-20, 177-20, and 138, CC. The above CC-dong land was exchanged with 177-19, 20, 177-22, 177-22, and 291, 291 square meters (hereinafter “the forest land of this case”). Accordingly, the forest of this case was completed to KimD around that time, and the forest of this case was completed to the Plaintiff on November 25, 1997.

C. On November 12, 1997, E purchased the instant building with 177-17 square meters large 533 square meters and 533 square meters among the instant auction land, and completed the registration of ownership transfer on November 26, 1997. ② After purchasing the instant forest on November 24, 1997, E completed the registration of ownership transfer on December 3, 1997 (hereinafter “the entire real estate transferred to E”).

D. Since then, the acquisition value of the instant real estate was 65,048,400 won, and the transfer value was 57,000,000 won and there was no capital gains tax report under the Plaintiff’s name.

E. On June 20, 2003, the EE reported the transfer income tax of the instant real estate after transferring the instant real estate to another person. The EE indicated that the acquisition value was more than KRW 57,000,000, which was the amount at the time of reporting the transfer income tax under the Plaintiff’s name, rather than KRW 180,000,000, which was much larger than that at the time of reporting the

On May 8, 2008, the Defendant issued a corrective disposition imposing capital gains tax of KRW 65,828,961 by multiplying the transfer value of the instant real estate as KRW 180,00,00,000 by the successful bid price of KRW 85,590,00, and by calculating the acquisition value as KRW 65,828,961 by the proportion of the site area of KRW 85,590,000, and imposing capital gains tax of KRW 64,461,070 (hereinafter “instant disposition”).

F. Since then, the Defendant confirmed the omission of KRW 11,640,000 in the acquisition value of the instant forest, and calculated gains on transfer by including it in the acquisition value, and then calculated gains on January 15, 2009, imposed capital gains tax of KRW 57,264,060 on the Plaintiff on January 15, 2009. In the first instance, in proportion to the amount calculated in proportion to the value calculated according to the standard market price at the time of acquisition. As to the instant auction land, the Defendant adjusted gains on transfer by means of calculating the acquisition value by multiplying the value of the instant building by the ratio of the site area to the value of the land at the time of acquisition. As to the instant auction land for which part of the building was transferred, the Defendant adjusted gains on transfer by reducing or correcting the amount of capital gains tax of KRW 54,37

[Ground of recognition] A without dispute, Gap evidence Nos. 2 through 4, Eul evidence Nos. 1 and 2 (including branch numbers), the purport of the whole pleadings

2. Whether the disposition is proper; and

A. The plaintiff's principal

Although the instant real estate was traded in the name of the Plaintiff, it was actually disposed of by the Plaintiff’s three persons, who are the Plaintiff’s children, in fact, after purchasing and disposing of the instant real estate as a partnership business. As such, the agreement on title trust between the Plaintiff and the said three persons on the instant real estate should be deemed to have existed. Accordingly, in light of the substance over form principle, the taxpayer is three persons, such as the trust truster, and thus, the instant disposition imposing capital gains tax on the Plaintiff, which is only the trustee, is unlawful.

(b) Related statutes;

It is as shown in the attached Form.

C. Judgment on the plaintiff's assertion

1) In the case of title trust, a taxpayer for transfer income tax

If a title truster transfers real estate to a third party and income accrued from such transfer was attributed to the title truster, under the substance over form principle under Article 14(1) of the Framework Act on National Taxes, the person liable to pay capital gains tax does not mean that the title truster, the subject of the transfer, who is the title truster, is not a taxpayer (see, e.g., Supreme Court Decision 96Nu6387, Oct. 10, 197).

2) Whether a title trust agreement was made

First of all, we examine whether there was an agreement on title trust between the Plaintiff and three parties, including the NetworkA, regarding the instant real estate.

According to the evidence Nos. 2-1, 2, 3, 5-1, 2-2 of the above evidence Nos. 1, 2-1, 2-2 of the evidence No. 2-2, the testimony of part of Kim F witness of the court of first instance, the domestic agricultural cooperative head of the court of first instance and the president of the Yong-U.S. Saemaul Bank, the successful bid for 85,590,000 won was awarded on February 6, 1997, and the registration of ownership transfer was made on April 1, 1997 under the name of the plaintiff 90, 30.1, 97, 90, 97, 90, 197, 90, 90, 200, 9, 10, 100, 197, 197, 90, 200, 9, 10, 197, 30, 197, 10.

However, the following circumstances revealed by the above facts and evidence cited below, namely, the successful bid price for the auction land and building of this case is KRW 85,590,00,00. The amount deposited from the transfer of ownership of the above real estate to the third party of this case before April 1, 1997 is merely KRW 30,400,000,000, which is the fact that: even if the testimony of the witness KimF is based on the above facts and evidence of the court of first instance, it is difficult for the deceased to find that the agreement was merely the KimF to exchange part of the auction land of this case; the settlement of profits accrued from the transfer of the above real estate of this case was not agreed upon by the 30th,00,000,000,000 won; according to the testimony of the 30th,00,000,000,000,000,000 won, which are the above real estate under the name of the Plaintiff and the 30th,0,0,0,000, out of receipts of this case.

3) Sub-decisions

Therefore, the Plaintiff’s assertion based on the premise that there was an agreement on title trust between the Plaintiff and the deceased EA regarding the instant real estate is without merit.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and the judgment of the court of first instance is unfair with different conclusions, so the judgment of the court of first instance is revoked and the plaintiff's claim is dismissed. It is so decided as per Disposition