In case where the actual owner and the registered titleholder are different without the purpose of evading gift tax, whether the deemed donation pursuant to the provisions of Article 32-2 of the Inheritance Tax Act shall be determined (negative)

Article 32-2 of the Inheritance Tax Act provides that if the tax authority recognizes that the actual owner and the nominal owner are different in the transfer of ownership of real estate due to transfer of ownership of real estate, gift tax may be levied by deeming the real estate as being donated at the time of transfer of registration, or where it is confirmed that the actual owner and the nominal owner are different in the case of transfer of ownership of real estate without the purpose of avoiding gift tax due to other circumstances

Article 32-2 of the Inheritance Tax Act

Supreme Court Decision 88Nu5464 Decided December 22, 1989

Attorney Han Han-sung et al., Counsel for the defendant-appellant

Head of the Tax Office

Daegu High Court Decision 89Gu85 delivered on April 18, 1990

Of the judgment of the court below against the plaintiff, the deemed portion of donation due to title trust shall be reversed. The case shall be remanded to the Daegu High Court.

The plaintiff's remaining appeals are dismissed.

1. Regarding ground of appeal No. 1

According to the reasoning of the judgment below, the court below acknowledged that the plaintiff purchased a total of 24,016 parcels of land from around June 1987 to February 198, 50, and agreed on the title trust with the non-party Kim Il-young, Dong Kim Il-dong Kim, etc. and completed the registration of ownership transfer in the name of such non-party, etc., and pursuant to Article 32-2 (1) of the Inheritance Tax Act, "where the actual owner and the nominal owner are different from the above in the property requiring the transfer or exercise of rights, registration, transfer, etc. (hereinafter referred to as "registration, etc."), it shall be deemed that the actual owner were donated to the nominal owner on the date of registration, etc. notwithstanding Article 14 of the Framework Act on National Taxes, if the actual owner and the nominal owner were different from the actual owner without any purpose of tax avoidance, and therefore, it shall not be deemed that the actual owner of the above provision did not have any reason to exclude the portion of the property from the real owner's tax avoidance, and if the plaintiff did not have any reason to prove it.

However, the provision of Article 32-2 of the Inheritance Tax Act provides that if the tax authority recognizes that the real owner and the nominal owner are different in cases of transfer of ownership of real estate, it shall be deemed to have donated such real estate at the time of transfer of registration. However, it is unlawful to impose gift tax on the case where it is confirmed that the real owner and the nominal owner are different due to other circumstances without the purpose of avoiding gift tax (see, e.g., Supreme Court Decision 88Nu5464, Dec. 22, 1989). The judgment of the court below is erroneous in the interpretation of Article 32-2 of the Inheritance Tax Act, which affected the conclusion of the judgment. The appeal is with merit.

2. Regarding ground of appeal No. 2

According to the records, the Plaintiff did not have asserted the reason for illegality regarding the portion on which gift tax was imposed by deeming the exemption of obligation as a gift through the entire process of the instant lawsuit.

Therefore, the court below's failure to make a decision on the part is just and without merit.

3. Therefore, among the part against the plaintiff in the judgment of the court below, the deemed portion of donation due to title trust is reversed, and the case is remanded to the Daegu High Court, and the remaining plaintiff's appeal is dismissed. It is so decided as per Disposition by

Justices Kim Yong-sung (Presiding Justice)