[1] Where the deposit and withdrawal are continued within two years before the commencement date of inheritance, the person who bears the burden of proving that the method of calculating the disposal value to be included in the taxable value of inherited property and the amount of the deposit are the amount created separately regardless of the amount withdrawn (=the tax authority

[2] The purport of Article 7-2 (1) of the former Inheritance Tax Act and Article 3 (1) of the Enforcement Decree of the same Act

[1] Article 7-2 (1) of the former Inheritance Tax Act (amended by Act No. 5193 of Dec. 30, 1996) provides that where an ancestor disposes of inherited property within two years prior to the commencement date of inheritance, such amount shall be calculated by the type of property and at least 100 million won, and the use of which is objectively unclear, as prescribed by the Presidential Decree, shall be included in the taxable value of inherited property. In accordance with the above provision, where a withdrawn deposit is included in the taxable value of inherited property within two years prior to the commencement date of inheritance pursuant to the above provision, the remaining amount shall be the disposal value, excluding the sum of the withdrawn amount from each deposit account of the ancestor, and the deposited amount shall be deemed as the disposal value: Provided, That where it is confirmed that the deposited amount is a separately created amount regardless of the withdrawn amount, the amount

[2] Article 7-2 (1) of the former Inheritance Tax Act (amended by Presidential Decree No. 14469 of Dec. 31, 1994) provides that "cases as prescribed by Presidential Decree" in Article 3 (1) of the same Enforcement Decree (amended by Presidential Decree No. 14469 of Dec. 31, 1994) shall mean the following cases: Provided, That where the amount of the property which is objectively unclear is disposed of or the debt is borne by the taxpayer, is less than 20/100 (5/100 of the excess amount if the amount of the property disposal or the debt is imposed exceeds 1 billion won) of the amount of the property acquired by the decedent, it shall be deemed that it is difficult for the taxpayer to prove that the amount of the property disposal is in excess of 100 billion won by cash donation or inheritance, and if the tax office proves that there is no objective proof of the amount of the property disposal in excess of 100 billion won, it shall be deemed that the whole amount of the property disposal in excess amount is within 1000 billion won.

[1] Article 7-2 (1) (see current Article 15 (1) 1 of the Inheritance Tax and Gift Tax Act) of the former Inheritance Tax Act (amended by Act No. 5193, Dec. 30, 1996) / [2] Article 7-2 (1) (see current Article 15 (1) 1 of the Inheritance Tax and Gift Tax Act) and (2) (see current Article 15 (1) 2 of the Inheritance Tax and Gift Tax Act); Article 3 (1) (see current Article 11 of the Inheritance Tax and Gift Tax Act) of the former Enforcement Decree of the Inheritance Tax Act (amended by Presidential Decree No. 1469, Dec. 31, 1994)

[1] Supreme Court Decision 97Nu5480 delivered on December 23, 1998 (Gong1999Sang, 266) / [2] Supreme Court Decision 98Du3075 delivered on December 8, 1998 (Gong199Sang, 159) Supreme Court Decision 98Du493 delivered on September 3, 199 (Gong199Ha, 2122), Supreme Court Decision 97Nu1679 delivered on June 23, 200 (Gong2000Ha, 1774) (Gong200Du291 delivered on February 9, 2001)

Plaintiff 1 and three others

Head of the tax office;

Seoul High Court Decision 98Nu8126 delivered on January 20, 2000

The appeal is dismissed. The costs of appeal are assessed against the defendant. Of the indication of party, the "Plaintiff 4" shall be corrected to "Plaintiff 4".

1. Regarding ground of appeal No. 1

Article 7-2 (1) of the former Inheritance Tax Act (amended by Act No. 5193, Dec. 30, 1996; hereinafter referred to as the "Act") provides that where an ancestor disposes of inherited property within two years prior to the commencement date of the inheritance, such amount shall be calculated by the type of property and at least KRW 100 million, and the purpose of use is objectively unclear, as prescribed by the Presidential Decree, shall be included in the taxable value of inherited property. In addition, where a deposit withdrawn within two years prior to the commencement date of the inheritance pursuant to the above provision is included in the taxable value of inherited property, the amount calculated by subtracting the sum of the amount deposited after the withdrawal from the aggregate of the amount deposited from each deposit account of the ancestor shall be deemed the disposal value: Provided, That where it is confirmed that the amount deposited is a separately created amount regardless of the amount withdrawn, it shall not be excluded from the amount withdrawn, but the burden of proof shall be interpreted to the tax authority (see Supreme Court Decision 97Nu5480, Dec. 23

The court below held that only 541,055 won (=642,642,855 won - 101,555 won - 101,589,800 won) calculated by deducting 101,589,800 won from the aggregate amount of the amount deposited in the savings account of this case within the same period after withdrawing from 642,642,855 won within 642,642,855 won) within 2 years prior to the date of commencing the inheritance of this case as the disposal value is just in accordance with the legal principles as seen earlier, and there are no errors in the misapprehension of legal principles as to the method of calculating the disposal value to be included in the taxable value of inherited property under the above provision, as otherwise alleged in the ground of appeal.

2. Regarding ground of appeal No. 2

Article 7-2 (1) of the former Enforcement Decree of the Inheritance Tax Act (amended by Presidential Decree No. 14469, Dec. 31, 1994; hereinafter referred to as the "Enforcement Decree") provides that "cases prescribed by Presidential Decree" in Article 3 (1) of the former Enforcement Decree of the Inheritance Tax Act (amended by Presidential Decree No. 14469, Dec. 31, 1994; hereinafter referred to as the "Enforcement Decree") shall mean the following cases: Provided, That this shall not apply where the amount of the property which is objectively unclear is disposed of or the debts are collected, or where the amount exceeds 20/100 (5/100 for the excess amount if the disposal of the property or the debts are collected exceeds one billion won) of the taxable value of the inheritance tax, unless the tax authority proves that there is an objectively unclear amount among those heirs by donation or inheritance in cash, it is difficult for the entire taxpayer to prove that the amount exceeds 100/100 of the total taxable value of the inheritance tax and the property.

After finding facts as indicated in its holding, the lower court determined that the amount of the above disposition should not be included in the taxable value of inherited property on the ground that it is recognized that the deceased spent the amount of KRW 120,553,055 (=541,053,055 - 420,50,000), excluding the amount of KRW 420,50,50,050, which has no dispute between the parties as to the fact that the use of the above disposition was confirmed, in light of the gender, age, occupation, career, income, and property status of the deceased who can be known based on the facts as indicated in its reasoning.

However, in making the above determination, the court below deemed that the proviso of Article 3 (1) of the Enforcement Decree of the above Act was newly established by the amendment of Presidential Decree No. 14469 of December 31, 1994, and judged that the above proviso is not applicable to this case. However, the above proviso was newly established by the amendment of Presidential Decree No. 14082 of December 31, 1993, and it is also applicable to this case where the commencement date of inheritance was December 26, 1994. Thus, in this case, the plaintiffs in this case are subject to proof only 432,842,444 won (=541,053,050 won x 80%) and its use is excluding the whole amount of KRW 420,500,000,000, and the whole amount of the above disposition is 12424,42404,4304,420 of the Enforcement Decree.

According to the records, the plaintiffs asserted to the effect that the deceased spent the remaining disposal price of KRW 420,50,000 other than the above disposal price as household living expenses, medical expenses, and social activity expenses (No. 105 of the records). According to the facts duly established by the court below, in light of the deceased's gender, age, occupation, career, income, and property status, it is recognized that the deceased paid at least KRW 12,342,44 of the above disposal price as household living expenses, medical expenses, and social activity expenses, and therefore, the above disposal price in this case constitutes a case where the plaintiffs, a taxpayer, prove the use of at least 80/100 of the above disposal price, and therefore, according to the relevant legal provisions and legal principles as seen earlier, all of them shall not be included in the taxable value of inheritance

Therefore, the court below's reasoning is somewhat inappropriate, but it is just in its conclusion that all of the above disposal values are not included in the taxable value of inherited property of this case, and there is no violation of the rules of evidence, incomplete deliberation, etc. concerning the confirmation of the use of the disposal proceeds of inherited property under Article 7-2 (1) of the Act and Article 3 (1) of the Enforcement Decree of the Act, and there is no error in the application of the above statutes, as alleged in the ground of appeal

3. Therefore, the appeal shall be dismissed, and the "Plaintiff 4" among the party indications in the judgment of the court below shall be correct ex officio as it is obvious that it is a clerical error in the plaintiff 4. It is so decided as per Disposition by the assent of all participating Justices.

Justices Kim Ji-dam (Presiding Justice)