Whether the provision on deemed donation of Article 32-2 of the former Inheritance Tax Act (amended by Act No. 3474 of Dec. 31, 1981) applies to a simple title trust

The legal fiction of donation under Article 32-2 of the former Inheritance Tax Act (amended by Act No. 3474 of Dec. 31, 1981) is the purport that if a trust property is a trust property pursuant to Article 3 of the Trust Act, is not registered or registered, or is not indicated in the register of stockholders or the register of bonds with respect to the trust property, it shall be deemed that the trust property is a donation to the trustee, and the mere title trust shall not be deemed a trust under the Trust Act, and therefore, it shall not be deemed a donation under Article 32-2

Article 32-2 of the former Inheritance Tax Act (amended by Act No. 3474 of Dec. 31, 1981)

Supreme Court Decision 83Nu192 Decided July 26, 1983, 85Nu423 Decided November 12, 1985, Supreme Court Decision 85Nu798 Decided November 11, 1986

[Judgment of the court below]

Head of Western Tax Office

Seoul High Court Decision 84Gu589 delivered on December 24, 1985

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

We examine the grounds of appeal.

(1) The legal fiction of donation under Article 32-2 of the former Inheritance Tax Act (amended by Act No. 3474 of Dec. 31, 1981), which was in force at the time of the instant case, is the purport that if trust property is not registered or registered as a trust property under the provisions of Article 3 of the Trust Act, or is not indicated in the register of shareholders or the register of shareholders, it shall be deemed that trust property is donated to the trustee. Since a simple title trust cannot be deemed a trust under the Trust Act, it shall not be deemed a trust under the provisions of Article 32-2 of the former Inheritance Tax Act (amended by Act No. 3474 of Nov. 12, 1985; 85Nu423 of Nov. 11, 1986; see, e.g., Supreme Court Decision 85Nu798, Nov. 11, 1986).

(2) According to the reasoning of the judgment below, the court below recognized that the acquisition of the shares in the name of the plaintiff was made by the non-party or was not a trust under the Trust Act, but merely was entrusted with the title, and held that the disposition in this case is unlawful since it cannot be deemed as a donation under Article 32-2 of the former Inheritance Tax Act. Therefore, the court below's decision is just in light of the records, and it is not erroneous in the misapprehension of legal principles, or in the incomplete hearing, or in the violation of the rules of evidence selection. The judgment of the party member cited in the theory of lawsuit was made before the establishment of Article 32-2 of the former Inheritance Tax Act, and it is not appropriate in this case.

The issue is groundless.

(3) Therefore, the appeal is dismissed, and all costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Jae-hee (Presiding Justice)