Plaintiff 1 and two others (Attorney Hah-ho, Counsel for the plaintiff-appellant)

Head of the Office of Government

July 19, 2011

1. All of the plaintiffs' claims are dismissed.

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

The Defendant revoked each disposition imposing capital gains tax of KRW 54,764,970 on Plaintiff 1 on February 10, 2010, KRW 36,422,50 on Plaintiff 2, and KRW 36,030,820 on Plaintiff 3.

1. Details of the disposition;

A. Plaintiff 1’s wife, Plaintiff 2 and Plaintiff 3 are Nonparty 1’s children, Nonparty 1 and Plaintiff 1.

B. On November 8, 2003, Nonparty 1 died, and the Plaintiffs inherited each of the lands listed in the annexed real estate list (hereinafter “instant land”) according to their inheritance shares (3/7 shares, Plaintiff 2, and 3 shares, respectively).

C. Meanwhile, on November 27, 2003 and December 8, 2003, each of the plaintiffs' respective shares in each of the above lands was completed for the registration of transfer in the name of Nonparty 3, who is the friendship of Plaintiff 1, respectively.

D. Nonparty 3 sold the instant land to another person around 2005, and the Plaintiffs filed a lawsuit against Nonparty 3 on the ground that the registration of transfer of ownership in the above Nonparty 3 on the instant land was a title trust, and won was awarded a favorable judgment by filing a lawsuit for return of unjust enrichment, etc. on the ground that it was a title trust. In the case of Seoul High Court 2007Na32889, the appellate court (Seoul High Court 2007Na3289), the conciliation was concluded between the parties that the Plaintiffs received KRW 400,000 from Nonparty 3 and the conciliation intervenors.

E. On February 10, 2010, the Defendant rendered the instant disposition imposing capital gains tax as stated in the purport of the claim on the ground that the Plaintiffs transferred each of the lands listed in paragraphs 1 through 15 (hereinafter “instant transfer land”).

[Ground of recognition] Facts without dispute, Gap 1 through 4, Eul 1 through 4 (including each number, if any), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiffs' assertion

The transfer land of this case was disposed of by Nonparty 3, the title trustee, and the transfer income was not returned to the Plaintiffs, the truster. Therefore, the Plaintiffs were unlawful since they were not obligated to pay the transfer income tax on the transfer land of this case.

B. Determination

If a title truster transfers real estate to a third party and income from such transfer was reverted to a title truster, the person liable to pay the relevant transfer income tax under the substance over form principle provided by Article 14(1) of the Framework Act on National Taxes and Article 7(1) of the former Income Tax Act (wholly amended by Act No. 4804 of Dec. 22, 1994), etc., is not the person liable to pay the relevant transfer income tax, but the title truster, the title truster, and the title trustee, the subject of the transfer, are not the person liable to pay the relevant transfer income tax (see Supreme Court Decision 96Nu6387, Oct. 10,

The plaintiffs filed a lawsuit against the non-party 3 for the return of unjust enrichment by selling the land of this case which was trusted by the plaintiffs to the other party, and the plaintiffs received 400,000,000 won from the non-party 3, etc. In light of the above facts of recognition, the ownership of the transferred land of this case remains in the name of the non-party 3, and the plaintiffs filed a lawsuit for the return of unjust enrichment against the non-party 3, and the mediation was completed as above, it is reasonable to deem that the transfer income from the transfer of the transferred land of this case to the other party was reverted to the plaintiffs who are the title truster by the mediation formed between the plaintiffs and the non-party 3, etc. (On the other hand, the defendant is deemed to have been reverted to the non-party 3, not to the plaintiffs, and the land of this case, the transfer registration of which was completed under the name of the non-party 16,17, at the time of the above lawsuit. Accordingly, the plaintiffs' assertion is legitimate and groundless.

3. Conclusion

Therefore, each of the plaintiffs' claims in this case is dismissed as it is without merit, and it is so decided as per Disposition.

[Attachment Omission of List of Real Estate]

Judges Kim Su-cheon (Presiding Judge) Na Jong-hun