(a) Whether the debts, etc. borne by the decedent are deducted from the value of the inherited property;

(b) The burden of proving the existence of an inheritee’s obligation;

A. The amount of debt of the inheritee to be deducted from the value of inherited property refers to the obligation of which it is certain that it should be paid at the final expense of the inheritee at the time of commencing the inheritance. Thus, the obligation of joint and several sureties or the secured debt of the inheritee is in an insolvent state where the primary debtor is unable to repay and thus, there is no circumstance that the primary debtor would not exercise his right of reimbursement after performing his obligation.

B. Since an inheritee’s obligation to be deducted from the value of inherited property belongs to a special reason that exceptionally affects the determination of the taxable amount of inheritance taxes, the burden of proving the existence of the obligation should be deemed as the taxpayer disputing the taxable value.

(a) Articles 4(1)3 and 10(2) of the Inheritance Tax Act; Article 4 of the same Act; Article 14 of the Administrative Litigation Act; Article 262 of the Civil Procedure Act

B. Supreme Court Decision 74Nu75 delivered on October 26, 1976

Plaintiff 1 and three others

Head of Yongsan Tax Office

Seoul High Court Decision 82Gu560 delivered on June 7, 1983

All appeals are dismissed.

The costs of appeal are assessed against the plaintiffs.

We examine the plaintiffs' grounds of appeal.

The debt amount of an inheritee to be deducted from the value of inherited property pursuant to Articles 4(1)3 and 10(2) of the Inheritance Tax Act refers to the debt which is deemed certain to be paid at the ultimate expense of the inheritee at the time of the commencement of the inheritance. Thus, even if there is a joint and several liability or a real-liability guarantee obligation for a third party, which is borne by an inheritee at the time of the commencement of the inheritance, unless there is any circumstance that the principal obligor is insolvent, and as such, the principal obligor would not exercise his right to reimbursement after performing the obligation, the amount of such debt shall not be deducted from the value of inherited property. Meanwhile, such reason belongs to a special reason that exceptionally affects the determination of the taxable value of inherited property, the liability for proving the existence of the evidence shall be deemed to belong to the taxpayer disputing the taxable value (Article 74Nu75 delivered on October 26, 1976).

Therefore, under the judgment of the court below to the same purport, the court below is just in rejecting the plaintiffs' assertion that, on the real estate inherited by the plaintiffs due to the death of the deceased non-party 1, the defendant should have imposed inheritance tax on the tax base after deducting the above debt from the appraised value of inherited property, since the registration of the establishment of a neighboring mortgage for the loan debt of 15 million won against the non-party 2's national bank as of the commencement date of inheritance, and the loan debt of the non-party 3 against the non-party 1's national bank as of the commencement date of inheritance, the non-party 2 or non-party 3, who is the principal debtor, should have been in an insolvent state at the time of the commencement of inheritance, and there is no evidence to view that the non-party 2 or non-party 3

Therefore, the appeal is dismissed, and the costs of appeal are jointly borne by the losing parties. It is so decided as per Disposition by the assent of all participating judges.

Justices Yoon Il-young (Presiding Justice)