[1] Where real estate held in title trust is transferred, a taxpayer of capital gains tax

[2] The case holding that the disposition of imposing the additional tax on the return and the unfaithful payment is lawful where the provisional return on the profits accruing from the transfer of assets was made under the name of the title trustee

[1] If a title truster transfers real estate to a third party and income from such transfer was attributed to a title truster, the person liable to pay the relevant transfer income tax under the substance over form principle provided in Article 14(1) of the Framework Act on National Taxes and Article 7(1) of the former Income Tax Act (wholly amended by Act No. 4804, Dec. 22, 1994) does not mean that the title truster, the subject of the transfer, who is the title truster, is a tax payer.

[2] The case holding that since a person obliged to make a preliminary return and payment of gains on transfer of assets due to the transfer of real estate held in title trust is the title truster, who is the subject of the transfer, the report and payment made under the name of the title trustee cannot be deemed a legitimate report and payment made under the name of the title trustee, thereby excluding the tax credit on the reported portion under the name of the title trustee,

[1] Article 14(1) of the Framework Act on National Taxes, Articles 7(1) and 23(see current Article 94) of the former Income Tax Act (amended by Act No. 4803, Dec. 22, 1994) / [2] Articles 7(1), 98(1) (see current Article 108(1)), 121(1) and (3) (see current Article 81(1) and (3)) of the former Income Tax Act (amended by Act No. 4803, Dec. 22, 1994)

[1] Supreme Court Decision 80Nu545 delivered on June 9, 1981 (Gong1981, 14061), Supreme Court Decision 85Nu573 delivered on September 23, 1986 (Gong1986, 2956), Supreme Court Decision 88Nu10329 delivered on March 27, 191 (Gong1991, 1303), Supreme Court Decision 93Nu517 delivered on September 24, 1993 (Gong193Ha, 2992)

[Judgment of the court below]

The Director of Gangnam District Office

Seoul High Court Decision 95Gu33117 delivered on April 10, 1996

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

The grounds of appeal are examined.

If a title truster transfers real estate to a third party and income from such transfer was attributed to a title truster, the person liable to pay the relevant transfer income tax under the substance over form principle provided in Article 14(1) of the Framework Act on National Taxes and Article 7(1) of the former Income Tax Act (wholly amended by Act No. 4804, Dec. 22, 1994; hereinafter the same shall apply) is not the person liable to pay the relevant transfer income tax, but the title truster, who is the subject of the transfer, becomes the person liable to pay the said income tax (see Supreme Court Decisions 80Nu545, Jun. 9, 1981; 93Nu517, Sept. 24, 1993, etc.).

In addition, a resident who transfers assets shall make a preliminary return on the gains from transfer of assets each time he/she transfers the assets concerned (Article 95(1) of the Income Tax Act), and when making a preliminary return on the gains from transfer of assets, he/she shall pay the amount calculated by deducting 10/100 of the tax amount to be paid from the calculated tax amount (Articles 96 and 98 of the same Act). Since a person who is obliged to make a preliminary return on the gains from transfer of assets in a title trust is the title truster who is the taxpayer, even if he/she reported and paid the assets in the name of the title trustee,

According to the reasoning of the judgment of the court below, the plaintiff acquired 2/3 shares of 1,388.6 m2/3 on June 27, 1983, which are indicated as "( Address 1 omitted) of Gangseo-gu Seoul Metropolitan Government (the judgment of the court below), and 1/3 shares on the same day shall be registered under the name of the plaintiff, and the remaining 1/3 shares shall be registered under the name of the non-party 1, and 2/3 shares of the land of this case shall be transferred on November 30, 1992 to the non-party 1, and the provisional return on transfer of assets on January 27, 1993 shall be made under the name of the non-party 1/3 shares, and the non-party 1 shall not be deemed to have been transferred after acquiring 1/3 shares of each of the plaintiff 1/3 shares, and the non-party 1/3 share of this case shall not be deemed to have been reported under the name of the plaintiff 1/3 of the provisional return and additional tax payment.

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

Justices Jeong Jong-ho (Presiding Justice)