Seoul Administrative Court 2009Gudan1655 (27 September 27, 2010)

Seocho 208west 3969 ( October 15, 2009)

No real estate title trust relationship may be deemed terminated.

Since the transfer real estate was transferred to a non-party company without maintaining the title trust relationship as it is, the actual transferor is determined to be the plaintiff, the disposition imposing capital gains tax on the premise that the transfer margin belongs to the plaintiff is legitimate.

2010Nu36703 Revocation of Disposition of Imposing capital gains tax

Park AA

○ Head of tax office

Seoul Administrative Court Decision 2009Gudan11655 decided September 27, 2010

May 24, 2011

June 21, 201

1. Revocation of a judgment of the first instance;

2. The plaintiff's claim is dismissed.

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

1. Purport of claim

The Defendant’s disposition of imposition of capital gains tax of KRW 225,682,430 for the Plaintiff on April 14, 2008 is revoked.

2. Purport of appeal

The same shall apply to the order.

1. Details of the disposition;

A. On November 3, 2003, the Plaintiff acquired 00 square meters from ○○○○○○-gu, 2966-1, 774 square meters, and 3037-1, 820 square meters, and completed the registration of ownership transfer in the name of Da○-gu, ○○○-gu, 2003, KimB-B.

B. After that, ○○○○○○-gu ○○○-dong 2966-1 774 square meters, and 3037-1 820 square meters for the same ○○○-gu 296-1 296-1 2962 square meters for the gas station and 303 square meters for the gas station (hereinafter “the instant real estate”).

C. KimB acquired two parcels, including the above 3036-1 gas station site, 2,545 square meters, from the literatureCC, and newly constructed △△△ Wheat on the ground of the instant real estate.

D. On July 29, 2004, a sales contract was concluded between KimBB and △△△△○ Co., Ltd. (hereinafter “non-party company”) with respect to the above 3036-1 724 m24 m2, the same 3036-3 m25 m2, the same 3036-4 m2, the same 3036-4 m2,766 m2.75 billion m2,750,000 won (a contract amount of KRW 1.2 billion, the intermediate payment of KRW 70 million, and the balance of KRW 850,000,000) with respect to the instant real property, and the sales contract was concluded with regard to the sales price of KRW 800,000 (a contract amount of KRW 300,000,000,0

E. Of the purchase price of the above six parcels of land, the non-party company paid a total of KRW 1.5 billion as the down payment on the date of the contract, KRW 1 billion as the intermediate payment on September 16, 2004, and KRW 1.5 billion as the remainder on November 22, 2006. On November 22, 2006, the registration of ownership transfer was completed in the name of the non-party company as to the above six parcels of land (However, the above 3036-3 and 4 parcels of land were merged with the same 3036-1 land on July 5, 2005).

F. On May 31, 2007, KimB reported the transfer income tax of KRW 820,766,200 calculated on the basis of the actual transaction price with respect to the transfer of the instant real estate, etc., but did not pay it.

G. However, on April 14, 2008, the Defendant notified ○○ District Prosecutors’ Office that the Plaintiff was charged with violating the Act on the Registration of Real Estate under Actual Titleholder’s Name by entrusting the instant real estate to KimB. On April 14, 2008, the Defendant deemed the Plaintiff as not KimB at the time of transferring the instant real estate and imposed and notified the Plaintiff of KRW 225,682,430 of the transfer income tax reverted to the year 2006.

[Ground for Recognition: Facts without dispute, Gap evidence 2, Eul evidence 6-1, 2, Eul evidence 1, Eul evidence 3-1, 2, Eul evidence 6, Eul evidence 7-1, 2-2, Eul evidence 7-1 and 2, the purport of the whole pleadings]

2. Whether the disposition is lawful;

A. The plaintiff's assertion

Since the Plaintiff already terminated the title trust agreement on the instant real estate around September 16, 2004 and transferred the instant real estate to KimB in KRW 500 million, the gains from the transfer of the instant real estate did not have accrued to the Plaintiff around November 22, 2006. Therefore, the Defendant’s disposition on a different premise is unlawful in violation of the principle of substantial taxation and the principle of based taxation.

B. Determination

(1) Article 14(1) of the former Framework Act on National Taxes (amended by Act No. 911 of Jan. 1, 2010) provides that if the ownership of income, profit, property, act or transaction subject to taxation is nominal and there is a separate person to whom such income actually belongs, the person to whom such income actually belongs shall be liable for tax payment and the tax-related Acts shall be applied. As such, the fact that the ownership of income is merely nominal and there is a separate person to whom such income actually accrues shall be borne by the claimant (see Supreme Court Decision 84Nu505, Dec. 11, 1984). Furthermore, in a lawsuit seeking the revocation of a tax disposition on the grounds of illegality of the tax disposition, the tax authority bears the burden of proving the legality of the disposition and the existence of the tax-related fact, and thus the burden of proving that the gains from the transfer of assets belongs to the other party to the disposition is also borne by the

(2) However, in light of the above facts, the Plaintiff’s actual transaction of real estate No. 2, No. 8B, and No. 1, No. 9, and No. 1, No. 1, 2000,000 won was paid to the Plaintiff at the time of this case’s sale of real estate owned by KimB, and the Plaintiff’s actual transaction of the real estate purchased at the time of this case’s sale of real estate owned by KimB was difficult to accept by Nonparty 5,000,000 won, based on the following circumstances: (i) the Plaintiff was paid a premium of KRW 450,000,000,00,000,000, which was paid to the Plaintiff at the time of this case’s sale of real estate owned by the Plaintiff at KRW 8,000,000,000,000,000,000,000 won, which was not yet paid to Nonparty 1, 2004.

(3) Therefore, the instant disposition that is based on the premise that the transfer marginal profit from the transfer belongs to the Plaintiff is lawful, since the actual owner at the time of the transfer of the instant real estate was the Plaintiff.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit, and since the judgment of the court of first instance is unfair with different conclusions, the defendant's appeal is accepted, and the plaintiff's claim is revoked, and it is so decided as per Disposition.