Seoul Administrative Court 2017Gudan5841 ( November 08, 2017)

Whether a family and a household are formed shall be determined according to whether or not the independent living is maintained.

In a case where a person maintains an independent living, the fact that the resident has sufficient income to maintain his/her own living is insufficient, and the fact that the resident and his/her family have maintained their living with their own living funds without mutual aid should be recognized.

Article 89 of the Income Tax Act

2017Nu87106 Revocation of Disposition of Imposing capital gains tax

○ Kim

○ Head of tax office

May 1, 2018

May 29, 2018

1. Revocation of a judgment of the first instance;

The Defendant’s imposition of capital gains tax of KRW 92,568,470 (including additional tax) for the year 2011 against the Plaintiff on July 8, 2016 shall be revoked.

2. All costs of the lawsuit shall be borne by the defendant.

The same shall apply to the order.

1. Details of the disposition;

This Court's explanation is based on Article 8 (2) of the Administrative Litigation Act and the main text of Article 420 of the Civil Procedure Act, in addition to adding "the disposition of this case" (hereinafter referred to as "the disposition of this case") to "the disposition of this case" on the second page 13 of the judgment of the court of first instance.

2. Whether the disposition is lawful;

A. The plaintiff's assertion

① On November 9, 2005, the Plaintiff resided with the Plaintiff’s spouse, who was divorced on November 9, 2005, and then tried to move-in report on the apartment located in Daejeon****Gu *, but the Plaintiff actually resided in the instant apartment located in Daejeon, with the Defendant’s family members, who were women, in the instant apartment located in Daejeon. Furthermore, the Plaintiff leased the instant housing before residing in the instant housing, and was residing in the instant housing, and was making a lease of a part of the housing, and was able to earn income from the housing. While the Plaintiff was able to live together with the Plaintiff, the Plaintiff was again residing in the house of the AA at the time of the instant housing transfer. As such, the Plaintiff was unable to live in the apartment owned by the CCC, and the Plaintiff could not be said to have lived with the CCC as it was capable of maintaining the independent livelihood with the rental income accrued from the instant housing until the time of the transfer of the instant housing.

② On November 29, 2013, the Defendant issued an advance notice of imposition of capital gains tax on the instant housing to the Plaintiff, and then expressed that the employee in charge of the Defendant would not impose capital gains tax after hearing the explanation of the circumstances from the Plaintiff. As such, the instant disposition goes against the principle of protection of trust.

③ Since the Plaintiff, as a disabled person, who supports the elderly and the grandchildren with difficulties in economic circumstances, may lose the place of residence with his/her family due to the instant disposition, there is a defect in violation of the principle of proportionality, which does not consider the taxpayer’s ability to bear expenses.

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

1) From "transfer of one house by one household" under Article 89 (1) 3 of the former Income Tax Act and Article 154 (1) of the former Enforcement Decree of the Income Tax Act, "one household" refers to a household comprised of the residents and their spouse together with the family members who make a living at the same address or same place of residence. Here, "family members making a living together with the family members living together" refers to a family member living together with the same family members in reality, but it does not necessarily require the same family members on the resident registration, but in daily life, it refers to a unit of living at the same time as the same place of living. Thus, whether a family member living together with the same resident should be determined depending on whether he/she actually resides in the same household and lives together with the same resident (see, e.g., Supreme Court Decision 8Nu3826, May 23, 1989). The fact that such a family member satisfies non-taxation requirements of capital gains tax, barring special circumstances (see, e.g., Supreme Court Decision 2005Du34384.

2) According to the following circumstances, each of the statements in Gap evidence Nos. 4 through 18 and Eul evidence Nos. 2 through 5 (including household numbers) and the testimony of the witness witness AA of the party at the trial, the plaintiff seems to have lived with AA that he/she had the spouse and resided in the family at the time of the transfer of the instant house even after his/her divorce on Nov. 9, 2005. Therefore, the plaintiff and CCC cannot be deemed to form the same household as a "family member who lives together with him/her with the above non-taxation requirement of the transfer income tax."

① On November 9, 2005, the Plaintiff was divorced on November 30, 2005, and transferred his resident registration to the CCC on December 30, 2005, **Gu**** Dong***** Dong*********************(hereinafter referred to as a “confection apartment”). However, the issue of the area for exclusive use by the Plaintiff 59.86 square meters seems to be narrow when the CCC and the two children live together with the Plaintiff. On the other hand, CCC’s spouse DD continues to engage in business ******* because it was difficult for the Plaintiff to suffer from disease, (i) it appears that CCC, a teacher, was liable for the Plaintiff’s livelihood as well as his family, and (ii) it is difficult for the Plaintiff to rent the instant house from 20 years to 20 years, and (iii) it was sufficient for the Plaintiff to rent the instant house to 20 years.

② 이 사건 주택 인근에서 식당을 운영하는 EEE는 '원고가 일주일에 두어 번쯤 식당에 와서 밥을 먹고 갔다. 원고와 딸이 이 사건 주택에 살고 있었던 것으로 기억한다'는 내용의 사실확인서를 제출하였고, 이 사건 주택 인근에서 약국을 운영하는 FFF은 '원고가 2008년부터 2011년까지 1년에 3〜4회 방문하여 약을 사갔고 한약도 지어갔다'는 내용의 사실확인서를 제출하였다. 그리고 이 사건 주택이 위치한 ** **동 통장은 이 사건 처분과 관련한 과세전적부심사 담당자에게 '이 사건 주택에서 원고를 다섯 차례 정도 본 적이 있다'고 진술하였다. 반면 쟁점 아파트 맞은편인 위 대우아파트 ***동 ****호에서 거주하고 있는 HHH은 이 사건 처분과 관련한 과세전적부심사 담당자와의 통화에서 '쟁점 아파트에서 CCC와 아이들이 살았다는 것은 알고 있었으나 원고는 한 번도 본 적이 없다'고 진술하였다. CCC 자신도 위 과세전적부심사 담당자와의 통화에서 '배우자의 사업실패와 질병으로 원고를 부양할 여력이 없으며 함께 거주한 적도 없다'고 진술하였다. 이와 같이 원고가 이혼 후 이 사건 주택에서 거주하였다는 점에 관하여는 여러 증거가 있으나, 쟁점 아파트에서 실제로 거주하였다는 자료는 전혀 없다.

③ The Plaintiff, while residing in BB’s family in the instant house, moved his residence to a house *** Gu*578-135, moving to a house 578-135, living together with AA until now.

On the other hand, AA witness of the trial from around 2009, found BB from around 2009 to look at the Plaintiff, and expressed to the effect that the Plaintiff was able to live in the above * Dong house without being able to do so. The Defendant also made a decision that the Plaintiff was able to live in the above * Dong house in around 2010 (see Supreme Court Decision 2016Du35083, Sept. 7, 2017) that “the Plaintiff had resided in the former spouse AA and the above * Dong house, and the domicile appears to have been in the future of the Women’sCC” [the Plaintiff owned the above * Dong house, but the Plaintiff should be deemed to form a separate household, separate from the Plaintiff at the time of the transfer of the instant house (see Supreme Court Decision 2016Du35083, Sept. 7, 2017).

④ As to the reason why the Plaintiff was registered as a resident in the housing at issue, the Plaintiff could not receive subsidies from the Government, known to support BB, and on the other hand, CCC, a wage and salary income earner, could be the basis for the Plaintiff’s dependent in filing a return on income deduction if the Plaintiff’s resident registration was made in the housing at issue. This explanation can be reasonably understood, and CCC actually received basic deduction and additional deduction under the Income Tax Act with the Plaintiff’s dependent from 2006 to 2008 and after 2011.

3) Therefore, the instant disposition taken on the premise that the Plaintiff constituted the same household as a family member living together with CCC is unlawful.

3. Conclusion

If so, the plaintiff's claim is reasonable, 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 accepted.