Plaintiff

The Director of the Pacific District Office

May 23, 2013

1. The Defendant’s disposition rejecting capital gains tax correction against the Plaintiff on July 19, 2012 shall be revoked.

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

The order is as follows (However, July 23, 2012, which is the date of the disposition recorded in the complaint, appears to be an error, and the date of disposition was accurately changed on July 19, 2012).

1. Details of the disposition;

A. On December 27, 1999, the Plaintiff’s husband Nonparty 1 (the Nonparty in the judgment of the Supreme Court) entered into a sales contract with Pungdong Construction Co., Ltd. (hereinafter “Pungdong Construction Co., Ltd.”), a housing developer, for the purchase of KRW 132,720,000 for the sale price, and paid KRW 13,272,00 on the day the sales contract was concluded with the Plaintiff for the purchase of KRW 132,720,00 for the sale price. After paying the remainder of the sale price according to the schedule, the Plaintiff acquired the instant housing on April 13, 2002.

B. After that, Nonparty 1 died on January 12, 2003. The Plaintiff independently inherited the instant house through an agreement on the division of inherited property. On October 31, 2008, the Plaintiff transferred the instant house to Nonparty 2 in KRW 295,000,000.

C. On June 1, 2009, the Plaintiff reported and paid KRW 43,989,750 as capital gains tax related to the transfer of the instant house, and filed an application for rectification to the effect that the requirements for reduction and exemption of newly-built house under Article 99(1) of the Restriction of Special Taxation Act (amended by Act No. 6045, Dec. 28, 1999; hereinafter “the Restriction of Special Taxation Act”) should also be applied to the heir. Thus, the Plaintiff filed an application for rectification to the effect that the capital gains tax already paid in relation to the transfer of the instant house should be refunded.

D. On July 19, 2012, the Defendant rendered the instant disposition rejecting the instant claim for rectification on the ground that the requirements for reduction and exemption of newly-built house under the legal provisions of this case were only applicable to only the decedent (non-party 1) who first concluded a sales contract with the housing constructor and paid the down payment, and cannot be applicable to the heir (non-party 1).

【Ground of recognition】 Evidence Nos. 1 to 5, 1 and 2, and the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

The Plaintiff’s husband, Nonparty 1 concluded a sales contract for the instant house within the newly-built house acquisition period as stipulated in the legal provision of this case and paid both the down payment and remainder, and died after acquiring the ownership of the instant house. The Plaintiff acquired the instant house by inheritance due to the inevitable reason that Nonparty 1 died of her husband.

In light of the above circumstances, the transfer of the instant house constitutes the reduction or exemption of capital gains tax stipulated in the instant legal provisions. Unlike this, the instant disposition is unlawful.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) The transfer of the instant house constitutes an exemption from capital gains tax as stipulated in the instant legal provisions. The reasons are as follows.

1. The legislative intent of the instant legal provision is to support the recovery of construction games and real estate games through the creation of new demand for housing and promote the construction of housing. Nonparty 1, the Plaintiff’s husband, contributed to the purchase of the instant housing from Pung Construction to the sale of the unsold housing, and the Plaintiff inherited the said housing following the death of Nonparty 1, thus granting the Plaintiff the benefit of capital gains tax reduction or exemption accords with the legislative intent of the instant legal provision.

② An inheritor shall succeed to the comprehensive rights and obligations regarding the property of the inheritee from the time inheritance commenced (Article 1005 of the Civil Act). The Plaintiff comprehensively succeeded to the status of Nonparty 1, i.e., a person who concluded a sales contract with a housing constructor and paid the down payment upon the death of Nonparty 1.

③ The legal provisions of this case only provide for the benefit of capital gains tax reduction or exemption only to the person who acquired a newly-built house, with the aim of facilitating the sale of unsold houses in lots, but also ensuring that the legal provisions of this case are not used as speculative means, such as unregistered resale. In addition, Article 99(1) of the Restriction of Special Taxation Act provides for the benefit of capital gains tax reduction or exemption for “newly-built house acquired by a person who first concluded a sales contract with a housing constructor and paid the down payment,” while Article 89(2) of the Income Tax Act provides that the said newly-built house shall not be deemed a house owned by the relevant resident when applying the non-taxation provision on one house for one household under the Income Tax Act.

The Plaintiff is not a specific succession, such as the purchase of the instant house from Nonparty 1, and when applying the non-taxation provisions on capital gains tax for one household under the Income Tax Act, the Plaintiff is the spouse of Nonparty 1 and constitutes one household with Nonparty 1. Therefore, the Plaintiff cannot be deemed to be in violation of the legislative purport of the instant legal provision, where the provision on capital gains tax reduction and exemption applies to the Plaintiff on the ground that the provision on reduction and exemption of capital gains tax applies to the Plaintiff.

2) Therefore, the instant disposition refusing to apply the instant legal provision to the Plaintiff is unlawful.

3. Conclusion

Thus, the plaintiff's claim is legitimate, and it is acceptable to accept it.

[Attachment Form 5]

Judges Kim Jong-soo