Where a donor has donated a real estate with a real guarantee obligation, the taxable amount of gift taxes shall be levied.

In principle, when a donee does not take over a secured debt when a donor donated a real estate for which the donor has been liable for a secured debt, the taxable amount of gift tax would be the value of the secured debt without deducting the secured debt. However, the taxable amount of gift tax would be the taxable amount of gift tax, only when the exercise of a donee's right to indemnity is clear due to a debtor's non-performance of a principal debtor's insolvency and it is obvious that the exercise

Articles 10 and 29-2 of the Inheritance Tax Act

Supreme Court Decision 87Nu991 decided Apr. 25, 1989 (Gong1989, 823) 89Nu6778 decided Mar. 9, 1990 (Gong1990, 903) 91Nu1455 decided May 24, 1991 (Gong191, 1798)

[Judgment of the court below]

The Director of Gangnam District Office

Seoul High Court Decision 91Gu2256 delivered on May 28, 1992

The appeal is dismissed.

The costs of appeal are assessed against the plaintiff.

The Plaintiff’s attorney’s ground of appeal is examined.

Article 34-5 of the former Inheritance Tax Act (amended by Act No. 4283 of Dec. 31, 1990) that applies to this case does not apply mutatis mutandis to the gift tax. Thus, Article 4(2)2 of the same Act does not apply to the gift tax. Thus, the court below is just in holding that Article 4(2)2 of the same Act does not apply to the calculation of the value of the gift property of this case, and there is no violation

In addition, in a case where a donee did not take over a secured obligation when a donor donated a secured obligation, the taxable amount of gift taxes shall, in principle, be the value of the property for which the donee did not deduct the secured obligation. However, the taxable amount of gift taxes shall be the taxable amount of gift taxes, inasmuch as the value of the property which deducts the secured obligation amount is a taxable amount of gift taxes (see, e.g., Supreme Court Decisions 87Nu991, Apr. 25, 1989; 89Nu6778, Mar. 9, 190, etc.) since the value of the property which deducts the secured obligation amount is a taxable amount of gift taxes (see, e.g., Supreme Court Decisions 87Nu991, Apr. 25, 198;

Therefore, the appeal is dismissed and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Kim Jong-soo (Presiding Justice)