If the plaintiff transfers land under title trust to another person according to his/her own intention, the disposition imposing capital gains tax is legitimate.

If the plaintiff transfers land under title trust to another person according to his/her own intention, the disposition imposing capital gains tax is legitimate.

Article 3 of the Gross Real Estate Tax Act / Article 12 of the Gross Real Estate Tax Act

Suwon District Court 2013Gudan10100

Gangwon 00

000 director of the tax office

October 23, 2013

January 15, 2014

1. The plaintiff's claim is dismissed.

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

Disposition of imposition of capital gains tax of KRW 2,429,640,210 on December 1, 201 by the defendant of the Gu office against the plaintiff on December 1, 201 is revoked.

1. Circumstances of the disposition;

A. On November 24, 1984, the registration of transfer of ownership in the name of Gangnamy (hereinafter referred to as "Gangk"), the Plaintiff, on November 24, 1984, entered into the name of Gangnamy (hereinafter referred to as "Gangk") with respect to the land in this case (hereinafter referred to as "the land in this case"), which was owned by the Plaintiff, and on June 2, 2008, the registration of transfer of ownership in the name of hh Development Co., Ltd. (hereinafter referred to as "Gk"), respectively.

B. On January 2, 2010, the director of the tax office having jurisdiction over the domicile of Gangnam-k decided and notified the transfer income tax of 1.8888 billion won to hh Development Co., Ltd. on the ground that "Gang-k transferred the instant land to hh Development Co., Ltd., and did not report and pay the transfer income tax." The Plaintiff's kj's registration of transfer of ownership on the instant land was null and void because it was based on the title trust agreement between the Plaintiff and Gangnam-k. Therefore, the Gangnam-gu District Court 2006Kahap000 decided that "the Plaintiff is obligated to implement the procedure for cancellation of the above transfer of ownership" was submitted, and then notified the Defendant of taxation data at the Plaintiff's domicile, and then revoked the above transfer income tax decision of 300 million won for 200 billion won for the Plaintiff's 80 billion won for the reason that it conducted tax investigation from September 15, 201 to October 19, 2011.

D. The Plaintiff dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal on July 11, 2012. However, the Tax Tribunal dismissed the Plaintiff’s above appeal on November 5, 2012. The facts that there is no dispute over the grounds for recognition, Gap’s evidence 1, Gap’s evidence 2, Eul’s evidence 1-2, and Eul’s evidence 2

2. Whether the dispositions of this case are legal; and

A. The plaintiff's assertion

The plaintiff asserts that the disposition of this case is unlawful and thus should be revoked for the following reasons.

1) Although the instant land was not a title trust, but a donation was made in the form of sale, the Defendant deemed otherwise and rendered the instant disposition.

2) Even if the Plaintiff trusted the instant land to Gangwonk, the Plaintiff did not return to the Plaintiff the transfer income accruing from the transfer of the instant land, and thus, the Plaintiff was not in a position to de facto control, management, and disposal of the transfer income, and thus, the Plaintiff cannot be deemed as a taxpayer of the transfer income tax, notwithstanding that the Defendant did not regard the Plaintiff as a taxpayer of the transfer income tax.

3) The Plaintiff did not actually control, manage, and dispose of the transfer income of the instant land, and the Plaintiff did not receive KRW 1.377 billion out of the transfer income amount as the transfer income tax after the transfer of the instant land, and thus, the Plaintiff did not expect the Plaintiff to report and pay the transfer income tax, notwithstanding the fact that it cannot expect the Plaintiff to separately report and pay the transfer income tax, the Defendant reported otherwise and disposed of the instant disposition.

(b) Fact of recognition;

1) On November 24, 1984, the Plaintiff maintained the instant land in good condition, and distributed siblings (Gjj, hhhh, strongk, and strong mm) fairly. On the instant land, the Plaintiff completed the registration of ownership transfer under the name of Gangwonk and continued to pay the property tax, etc. on the instant land.

2) On October 7, 1996, the Plaintiff filed a registration of the Plaintiff’s right to claim transfer of ownership with respect to the instant land on October 7, 1996, where it is apprehended that Gangnam may cause property to be made, such as the use of credit cards over the remaining, and on July 2, 2001, the Plaintiff filed a registration of the right to claim transfer of ownership in the name of thejj and the Gangwonhh with respect to each of the instant real estates 176.6/10 of the instant real estate

3) On October 12, 2002, the Plaintiff: (a) on October 12, 2002, Gangnamk used the instant land as collateral from Leek-k-k-k-k-k-k-k-k-k-k-k-k-k-k-k-k-k-k-k-k-k-k-k-k-k-k-k-k-k-k-k-k-k’s registration of the right to claim the above transfer of ownership; (b) on August 30, 2005, the Plaintiff provided the instant land and the building on its ground as joint security; and (c) paid the interest on the above loan obligation.

4) On November 22, 2006, the Plaintiff asserted that “the instant land was trusted in title by the Plaintiff, but the title trust is terminated.” On August 24, 2007, the Plaintiff filed a claim for ownership transfer registration with the Seoul Southern District Court 2006Kahap0000, and on August 24, 2007, the above court rendered a favorable judgment with the purport that “the ownership transfer registration in the name of Gangwon-k with respect to the instant land was made based on the title trust agreement between the Plaintiff and Gangwon-k, and thus, it is null and void.” The judgment became final and conclusive at that time.

5) The instant land was transferred to Hh Development Co., Ltd. on June 2, 2008 as well as the Plaintiff’s building located on the ground without cancelling the registration of transfer of ownership in the name of Gangseo-k in the above judgment. At the time, the agreement between the Plaintiff and the Gangwon-k, stating the following (hereinafter “instant agreement”).

1. The building portion shall be sold in the name of the plaintiff, and the land portion shall be sold in the name of kk; and

2. Of the proceeds from sale nine billion won, the portion of land shall be eight billion won, while the portion of building shall be seven hundred million won.

3. Taxes and public charges related to the sale are attributable to the Plaintiff for the portion of the building according to the purport of paragraph 1, and the lecturek is liable for the portion of the land.

4. The receipt of the proceeds from the sale of buildings and land shall be delegated to the Plaintiff all matters: Provided, That the Plaintiff shall be held responsible for and deliver to Gangwonk the balance of 1.37 billion won in capital gains tax, excluding the bank loans 4.3 billion won, interest 1 billion won, 1.8 billion won in capital gains tax, 29 billion won in total, and 1.3 billion won in capital gains tax, and all legal responsibilities for the delivery thereof.

6) Gangnam received KRW 1,377,1,00 among the transfer proceeds of the instant land in accordance with the contents of the above agreement, but did not pay it as capital gains tax. [Grounds for recognition] In the absence of dispute, Gap evidence 2, Gap evidence 3, Gap evidence 7, Gap evidence 8-1 through 6, Gap evidence 10, Eul evidence 10, Eul evidence 1-1, 2, Eul evidence 3 through 5, Eul evidence 8, Eul evidence 9, Eul evidence 9, testimony of witnesses and arguments as a whole.

1) As to the plaintiff's first argument

A) In full view of the following circumstances, it is recognized that the instant land was in title trust rather than the Plaintiff’s donation to Gangnam.

1. The Plaintiff continued to pay the property tax, etc. on the instant land even after completing the registration of ownership transfer with respect to the instant land, and the act that is continuously contrary to the preservation and maintenance of the instant land was defective and eventually, the Plaintiff filed a lawsuit claiming ownership transfer registration with the Seoul Southern District Court 2006 Gohap 0000 to re-register the ownership of the instant land in the name of the Plaintiff. In light of the above, the Plaintiff appears to have completed the registration of ownership transfer with respect to the instant land with the intention of being entrusted only with the preservation of the instant land, not with the intention to grant the instant land finally and finally.

2. The plaintiff asserted that the land of this case was title trust in the above lawsuit, and the above court accepted the plaintiff's assertion and sentenced the plaintiff's winning judgment, and the above judgment became final and conclusive (the plaintiff asserted that the lawsuit was brought against the plaintiff's doctor's will who was suffering from Alj at the time of river, but it is not sufficient to recognize the plaintiff's above assertion only with Gap's evidence Nos. 4 through 6, Gap's evidence No. 11-1 and 2, and witness's testimony, and there is no other evidence to acknowledge it). Accordingly, the above part of the plaintiff's assertion on different premise is without merit.

2) As to the plaintiff's second argument

A) In full view of the following circumstances, it is recognized that the Plaintiff was in a position to de facto control, manage, and dispose of the instant land by transferring the said land at his/her own will and the transfer income by taking into account the following circumstances that can be seen as examining the description of the evidence No. 11 and the purport of the entire pleadings.

1. In light of the fact that a building owned by the Plaintiff located on the ground at the time of the transfer of the instant land was also transferred, and the specific use method for the transfer price of the instant land was stated in the instant agreement made between the Plaintiff and the Gangseok at the time of the transfer, and that the transfer price was actually used according to its content, it appears that the Plaintiff transferred the instant land to Gangnam under title trust with its own will and used the said transfer price.

2. Although the Plaintiff asserted that he forged the instant agreement, the Plaintiff’s statement of No. 9 alone is insufficient to acknowledge the Plaintiff’s allegation, there is no other evidence to acknowledge it, and on May 16, 2013, the 00 District Prosecutors’ Office stated that this New Zealand, the Plaintiff’s wife, “Gangj, forged the instant agreement under this Plaintiff’s name, and subsequently exercised it,” and decided that he was guilty in the case of accusation.

B) Therefore, there is no reason to assert this part of the Plaintiff’s assertion on a different premise.

3) As to the plaintiff's third assertion

A) As seen earlier, in the instant case where the Plaintiff trusted the instant land to Gangnam, and transferred the instant land in a position to de facto control, manage, and dispose of the transfer income of the instant land in the name of the Plaintiff, as seen earlier, it is difficult to deem that there was a justifiable reason to expect that the Plaintiff could not expect the Plaintiff to perform the obligation to report and pay the transfer income tax related to the transfer of the instant land under a different premise, solely on the ground that he did not receive KRW 1.371 million out of the transfer price of the instant land in accordance with the content of the instant agreement prepared between the Plaintiff and the Plaintiff even if he did not pay the transfer income tax, according to the content of the instant agreement made between the Plaintiff.

3. Conclusion

The plaintiff's claim of this case is dismissed as there is no reasonable ground.