Whether the instant housing constitutes the subject of exemption from capital gains tax on one house for one household

The fact that the retention period of the instant house was not less than three years until the date of the approval of the management and disposal plan is apparent, and the instant disposition is legitimate, premised on the premise that the instant house is not one house for one household, which is exempt from the right to move in.

Article 89 of the Income Tax Act

Incheon District Court 2015Gudan2076 Revocation of Disposition of Imposing Capital Gains Tax

AA

BB Director of the Tax Office

July 12, 2016

October 25, 2016

1. The plaintiff's claim is dismissed.

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

1. Details of disposition;

A. On November 20, 2003, the Plaintiff acquired and possessed 00 dong, Seo-gu, Incheon, Seo-gu, Incheon (hereinafter referred to as the “instant house”) and owned the housing reconstruction project for the instant housing, etc., and the management and disposal plan was approved on December 30, 2005.

B. The Plaintiff acquired the association member's relocation right to the instant house (hereinafter "the right to move into the instant house") and transferred the right to move into the instant house in KRW 320,000,000 on September 29, 2007, but did not report the transfer income tax.

C. On February 1, 2015, the Defendant: (a) deemed that the occupancy right of the instant case does not fall under the subject of exemption from capital gains tax on one house for one household as the period of possession of the instant house does not reach three years; and (b) imposed capital gains tax of KRW 42,382,380 on the Plaintiff for the year 2007 (hereinafter “instant disposition”).

D. The Plaintiff appealed and filed an appeal with the Tax Tribunal, but was dismissed on October 5, 2015. Meanwhile, on December 30, 2005, the Plaintiff’s management and disposal plan for the said reconstruction project was authorized and moved to another place on March 3, 2006, and the instant housing was removed on October 25, 2006.

[Reasons for Recognition] Facts without dispute, Gap evidence 6, Eul evidence 1 to 8, the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

(1) Since the retention period of 3 years subject to non-taxation of capital gains tax on one house for one household is not the date of the administrative disposition plan, but the transfer date of the right to move in of this case, the instant disposition is unlawful on a different premise

(2) The instant housing falls under the case of expropriation under the Act on the Acquisition of Land, etc. for Public Works and the Compensation therefor and the case of expropriation under other Acts, and thus is exempt from taxation regardless of its holding period. Thus, the instant disposition is unlawful.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

(1) Determination on the assertion that the holding period of three years has been met

Article 89(1)3 of the former Income Tax Act (amended by Act No. 9897, Dec. 31, 2009; hereinafter referred to as the "former Income Tax Act") provides that no capital gains tax shall be imposed on the income accruing from the transfer of a house for one household as prescribed by the Presidential Decree. Article 154(1) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 20931, Jul. 24, 2008; hereinafter referred to as the "former Enforcement Decree of the Income Tax Act") provides that "one house for one household means that one household possesses one house in Korea as of the date of transfer, and that the period of possession of the house is three years or more in Korea. Article 155 subparag. 17 of the former Enforcement Decree of the Income Tax Act provides that no capital gains tax shall be imposed on the transfer of a house for the purpose of sale in lots and the ownership of an association member's relocation right under the main sentence of Article 89(2) of the Act shall be imposed on the transfer of a house for one-year.

Therefore, whether there is another house or not shall be determined on the basis of the date of transfer, and the retention period shall be determined not on the transfer date of the right of sale but on the date of the management and disposal plan, the retention period of the right of sale itself is excluded from the retention period which is the basis of whether

As to the instant case, it appears that the Plaintiff did not have any other house at the time of transferring the right to move into the instant case. However, the fact that the retention period of the instant house does not reach three years until December 30, 2005, which was the approval date of the management and disposal plan, is obviously apparent. Thus, the instant disposition is legitimate on the premise that the right to move into the instant case is not one house for one household, which is exempt from the right to move into the instant case. The Plaintiff’s assertion on the different premise is without merit.

(2) Determination as to the assertion that the holding period is not restricted

Since the housing of this case does not fall under the purchase by consultation and expropriation under the Act on the Acquisition of Land, etc. for Public Works and the Compensation therefor and expropriation under other Acts, the plaintiff's assertion on this part is without merit.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed, and it is so decided as per Disposition.