Cho High Court Decision 2008west0628 ( October 16, 2008)

Whether the limited method of time limit for spouse inheritance, mutual aid property division, etc. is a unconstitutional provision which infringes on property rights.

It is difficult to deem that the legal provision has reached the degree of infringing on property rights even if the legal provision does not provide for the additional notification system or the rectification system on the grounds of the latter, which is alleged by the plaintiffs.

The contents of the decision shall be the same as attached.

1. All of the plaintiffs' claims are dismissed.

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

The Defendant’s disposition of imposition of KRW 1,362,117,300 against the Plaintiffs on January 1, 2008 is revoked.

1. Details of the imposition;

A. On June 13, 2005, the deceased ○ ginseng (hereinafter referred to as “the deceased”) died, and accordingly, the Plaintiff’s strong debt, the son’s old-age, and the Plaintiff’s old-age were jointly inherited the deceased’s property.

B. On December 12, 2005, the Plaintiffs filed a tax base return of inheritance tax with the Defendant applying KRW 2,723,864,90 as the amount of inheritance deduction, and filed a tax base return of inheritance tax by asserting that there is an inevitable reason for not dividing the inherited property as the inheritor is under litigation with respect to the inherited property.

C. From May 9, 2007 to July 8, 2007, the Defendant conducted an inheritance tax investigation on the deceased’s inherited property. As a result, the Defendant issued the instant disposition imposing an inheritance tax amount of KRW 1,362,17,300 on the Plaintiffs under Article 19(3) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 7580, Jul. 13, 2005; hereinafter “the Act”) by the six months from the day following the due date of the spouse division under the proviso of Article 19(2) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 7580, Jul. 13, 2005; hereinafter “the Act”), denying the application of KRW 2,723,864,99, which the Plaintiffs reported as the amount of the spouse’s inheritance deduction amount, and instead, applying KRW 500,000,000 to the Plaintiffs on January 1, 2008.

D. On February 12, 2008, the Plaintiffs appealed to the Tax Tribunal for the instant disposition, but was dismissed on October 16, 2008.

[Ground of Recognition] Facts without dispute, Gap evidence 1, Eul evidence 4 through 8, Eul evidence 1 to 6, Eul evidence 4-1 to 8, Eul evidence 5-1 to 7, Eul evidence 6-1 to 3, Eul evidence 7-1 to 8, and the purport of the whole pleadings

2. Whether the imposition is proper.

A. The plaintiffs' principal

In the following reasons, the defendant's disposition of objection is illegal.

(1) The Plaintiffs were unable to divide and register inheritance assets even in the name of the Plaintiff Gangwon-do, as they were unable to divide inherited property within the time limit set under Article 19(2) of the Act due to a dispute over inheritance with respect to the inheritance of ○○○ line. Therefore, the Plaintiffs’ justifiable grounds for not dividing inherited property within the time limit set under Article 19(2) of the Act are as follows: (a) the amount of spouse inheritance deduction calculated pursuant to Article 19(1) of the Act should be applied.

(2) According to Article 19(2) of the Act, where a spouse’s inherited property is reported by dividing the inherited property with respect to the same amount of inherited property by the time limit for division of inherited property (or, in extenuating circumstances, six months after such date; hereinafter “the time limit for division of inherited property, etc.”), it is unreasonable to allow only a deduction of KRW 500 million to be granted on the ground that the heir was unable to report his/her inherited property by the time limit for division of inherited property due to the lack of consultation among the inheritors on inherited property, etc. Therefore, the legal provision of this case violates the principle of tax equality or the principle of equality under Article 11 of the Constitution, and it is difficult for the court to uniformly determine whether the inherited property is donated by the time limit for division of inherited property in case of a judgment on division of inherited property, and thus, it is inevitable to determine whether the spouse’s property right can be inherited property by the time limit for ex officio division of inherited property by the time limit for ex officio division of inherited property.

(b) Related statutes;

It shall be as shown in the attached Form.

C. Determination

(1)For the first note:

(A) Article 19 of the Act provides for a spouse's inheritance deduction in Article 19 and Paragraph (1) of the same Article provides that the amount of actual inheritance received by a spouse shall be deducted from the taxable amount of inheritance taxes within a certain limit, but such inheritance deduction shall not be always accepted, and Paragraph (2) of the same Article provides that it shall be applied only when the inheritor's inherited property is divided (in case of registration, etc., it shall be limited to the registration, etc., within the prescribed period) by the time limit for division of inherited property (in case of registration, etc., it shall be limited to the registration, etc.) and the heir's inherited property cannot be divided within the prescribed time limit, and it shall be deemed that the report is filed within the time limit for division of inherited property only where the inheritor's inherited property cannot be divided within six months from the day after the time limit for division of inherited property is due to unavoidable reasons prescribed by the Presidential Decree. Article 17 (1) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 18903, Jun. 30, 20, 20005) provides that the inheritor's of inheritance claim.

(B) According to the health class, evidence Nos. 2 and 6, and evidence No. 8 of this case, the No. 5 filed a lawsuit against the plaintiffs against the Seoul Central District Court No. 2005Gahap98352, Nov. 16, 2006 against the plaintiffs, and the judgment against the No. 16 became final and conclusive around that time. The plaintiffs filed a claim for a trial on division of inherited property with the Seoul Family Court No. 2006Rahap140, Oct. 9, 2006 against No. 2006, and the facts that the trial was held on Feb. 6, 2009. However, according to the circumstance that No. 17(2)1 of the Enforcement Decree of the Act was pending, it is difficult to view that the plaintiffs filed a lawsuit for recovery of inherited property or a lawsuit on division of inherited property between the No. 1 and the plaintiffs, or that the heir under subparagraph 2 of the same paragraph did not have become final and conclusive.

(C) Therefore, the plaintiffs' first argument is without merit, since there is no justifiable reason to believe that the plaintiffs failed to divide their inherited property within the period stipulated in Article 19 (2) of the Act.

(2) in the second place, in accordance with the second place.

(A) This case’s legal provision provides that a spouse’s statutory share of inheritance shall not be subject to the spouse’s inheritance deduction, and that a spouse’s actual share of inheritance determined by the division shall be entitled to the spouse’s inheritance deduction by a certain period. The purpose of this case is to prevent tax avoidance in relation to the part of the spouse’s inheritance deduction by dividing the inherited property after receiving the spouse’s inheritance deduction according to the abstract statutory share of inheritance. If there is no restriction on the spouse’s inheritance division period, etc., the tax authority cannot determine the spouse’s inheritance deduction amount if the inherited property is not divided. As a result, the tax authority cannot determine the inheritance deduction amount if the inherited property is not divided, and there is no incentive to divide the inherited property as soon as possible in terms of the tax burden of the heir who is obliged to bear high-amount of inheritance, and most of the inheritors are intending to delay the inheritance tax burden by delaying the division of inherited property, and thus, the spouse’s share of inheritance tax can not be seen as being legitimate in terms of the principle of equality and equality of inheritance tax burden on the spouse’s.

(B) The legal provision of this case only requires a report on the division of inherited property by the time limit for the division of inherited property, and does not specifically limit the method of division of inherited property, and it cannot be readily concluded that the judicial division of inherited property cannot be completed by the time limit for the division of inherited property. As seen earlier, insofar as the legitimacy of the legislative purpose of this case and the appropriateness of the means for the division of inherited property are recognized, it cannot be said that the legal provision of this case violates the essential contents of the right to claim a trial under Article 27 of the Constitution.

(C) Whether to grant a spouse’s inheritance deduction or to a certain extent, and how to impose restrictions in any way is determined depending on the financial, social, and economic factors of the State, such as whether to grant a spouse’s inheritance deduction or to a certain extent, income level of the citizens, inheritance practices of society, methods of distribution of legacy, details of property constituting a miscarriage, aggregate limit of deduction, inheritance tax and gift tax rate, awareness of the women’s social status, etc. Thus, in principle, if the legislative contents are within a reasonable scope, not arbitrary or arbitrary, in light of the fundamental rights and basic principles stipulated in the Constitution, legislative limit of fundamental rights, and legislative purpose of the pertinent law, it cannot be deemed as unconstitutional (see Constitutional Court Order 9Hun-Ba120, Nov. 29, 2001; Constitutional Court Order 9Hun-Ba120, Nov. 29, 2001). The legislative purpose of the instant legal provision merely provides for the period for the inheritance division of a spouse within one year or one year and six months after the commencing date of inheritance, and it cannot be seen that the Plaintiffs’ right of inheritance division becomes legitimate.

(D) As such, the legal provision of this case cannot be deemed to be unconstitutional. Therefore, the second assertion by the plaintiffs on the premise that the legal provision of this case, which served as the basis for the defendant's disposition of this case, is unconstitutional is without merit.

3. Conclusion

The defendant's disposition of this case is legitimate, and all of the plaintiffs' claims are not accepted.