debtor's donation of property owned by the debtor in excess of his/her liability constitutes a fraudulent act.

The Plaintiff’s donation of the instant real estate to his/her spouse and children constitutes a fraudulent act, and thus, should be revoked. However, it is not necessary to establish a fraudulent act against the real estate, which was not the Plaintiff’s property from the original date.

Article 30 of the National Tax Collection Act

2012 Gohap 100758 Revocation of Fraudulent Act

Korea

KimAA et al.

November 22, 2013

December 6, 2013

1. (a) On May 2, 2008, the gift agreement entered into between Defendant KimA and KimB (000-0000) with respect to each real estate listed in the separate sheet 3 shall be revoked.

B. The gift agreement concluded on March 11, 2008 between Defendant KimCC and KimB on the real estate listed in the separate list 4 and 5 shall be revoked.

C. The gift contract concluded on March 11, 2008 between Defendant KimD and KimB on each real estate listed in the separate sheet 6 shall be revoked.

2. A. Defendant KimA implements the procedure for registration of cancellation of ownership transfer registration that completed No. 0000 on May 9, 2008 with respect to each real estate listed in the separate sheet 3 as indicated in the separate sheet 3 to the Plaintiff;

B. Defendant KimCC shall be the Plaintiff:

1) The OO branch of the O branch of the O branch of the O branch of the District Court and the O branch of the O branch of the ownership transfer registration completed on March 12, 2008 by the receipt No. 0000; and

2) The OO branch of the O branch of the O branch of the District Court and the O branch of the U.S. registry office of March 19, 2008 implement procedures for cancellation of ownership transfer registration completed under No. 0000 for each real estate listed in the attached list 5;

C. Defendant Kim DD shall implement the procedure for cancellation registration of ownership transfer registration that was completed on March 19, 2008 by the OO district court OO branch registry of the O branch on each real estate listed in the separate sheet 6 attached hereto to the Plaintiff.

3. The plaintiff's remaining claims against KimA are dismissed.

4. Of the costs of lawsuit, the part arising between the Plaintiff and Defendant KimA is assessed against the Plaintiff, the remainder is assessed against the Defendant KimA, and the part arising between the Plaintiff, Defendant KimCC, and Defendant KimD is assessed against the Defendants.

Cheong-gu Office

The contract of donation was revoked on April 24, 2008 with respect to each real estate listed in the separate sheet 1 and 2 between the order Nos. 1 and (2) and the defendant KimB, and the defendant KimA shall revoke the contract of donation on April 24, 2008, and the defendant KimA shall implement the procedure for registration of cancellation of ownership transfer registration completed on May 7, 2008 with respect to each real estate listed in the separate sheet No. O District Court OO Registry No. 0000 with respect to each real estate listed in the separate sheet No. 1 with respect to the plaintiff, and shall pay to the plaintiff 00 won and

1. Facts of recognition;

A. The KimB completed the registration of ownership transfer on April 24, 2008 with regard to each real estate listed in the separate sheet 1 and 2 (hereinafter referred to as the "real estate of this case 1 and 2") to the defendant KimB, his wife, as the OO District Court OO Registry No. 0000 on May 7, 2008, and completed the registration of each real estate listed in the separate sheet 3 (hereinafter referred to as the "third real estate of this case") on May 2, 2008 as to each real estate listed in the separate sheet 3 (hereinafter referred to as the "three real estate of this case").

B. On December 23, 2009, Defendant KimA completed on December 23, 2009 the registration of ownership transfer based on the sales contract of December 18, 2009 with respect to the instant 2 real estate to E.

C. KimB completed the registration of ownership transfer on March 11, 2008 with respect to the real estate listed in the separate sheet 4 and 5 (hereinafter referred to as the "real estate of this case 4, 5") to Defendant KimCC, his wife, as OO District Court O branch office of O branch office of O branch office of O branch on March 11, 2008, received on March 12, 2008 as the receipt No. 1609, and the registration was completed on March 11, 2008 with respect to each real estate listed in the separate sheet 6 (hereinafter referred to as the "six real estate of this case") against the defendant KimD, as his wife, and completed the registration of ownership transfer on March 11, 2008 as OO branch office of O branch office of O branch office of O branch office of O00 received on March 19, 2008.

D. On December 20, 2002, KimB donated KRW 1,481,768,700 in cash to KimF, a birth donor, and during that period, the head of each tax office, on July 1, 2010, on the grounds that KimF’s residence is unknown, who is the donee, imposed KRW 602,990,470 on KimB as of July 31, 2010. However, KimB’s failure to pay gift tax, which led to the total sum of the gift tax and the additional charges thereon, until July 3, 2012.

E. From July 2009, the Central Regional Tax Office found that KimB conducted a tax investigation on the OB Corporation (hereinafter referred to as the “OB”) whose representative director is KimB used for personal purposes by divulging the overpaid construction cost, and notified KimB of the fact that it imposed value-added tax and corporate tax on OB, while imposing value-added tax and corporate tax on OB, that it would pay to KimB by September 3, 201 the global income tax for the year 200, dividend income for the taxable period of 2003, 00 won for the recognition of the taxable period of 2003, and the bonus for the year 2006.

F. However, KimB, however, called: (a) the above aggregate of the gift tax and increased additional tax amount; (b) KRW 000 of the global income tax in 2002; (c) KRW 000 of the global income tax in 2003; and (d) KRW 000 of the global income tax in 2006 (hereinafter referred to as “the gift tax claim in this case”; and (c) “the gift tax claim in this case; and (d) the global income tax claim in this case in 2002.”

[Reasons for Recognition] Facts without dispute, Gap evidence Nos. 1 through 8, 11, and 13 (including, if any, various numbers) and the purport of the whole pleadings

2. The plaintiff's assertion

The Plaintiff is a creditor with the instant tax claim against KimB. As such, KimB’s donation of each of the instant real estate to the Defendants constitutes a fraudulent act detrimental to the Plaintiff, the creditor, and the Defendants, the beneficiary, were aware that they would harm the Plaintiff as the family members of KimB, and thus, each of the above gift contracts should be revoked.

Therefore, Defendant KimA is obligated to restore the Plaintiff to its original state, with respect to the instant real estate 1 and 3, Defendant KimCC is liable for the instant real estate 4 and 5, Defendant KimD’s cancellation of each registration of transfer of ownership completed with respect to the instant 6 real estate, and Defendant KimA is obligated to pay KRW 000,000, which is equivalent to the value of the instant 2 real estate, and damages for delay.

3. Determination

A. Formation of preserved claims

1) In the case of gift tax claim of this case

According to Article 21(1)3 of the Framework Act on National Taxes, a donee’s liability to pay taxes is established when the donee acquires property through a gift. The donor’s joint and several liability to pay gift taxes is established when the donee’s domicile or residence is unclear and it is deemed difficult to secure a tax claim and it is difficult to secure a tax claim even if a disposition on default is made due to a default, and thus, it is abstract at the time of the occurrence of a cause under each subparagraph of Article 4(4) of the Inheritance Tax and Gift Tax Act. However, the head of a tax office has determined specifically only by issuing a written notice to the donor pursuant to Article 9 of the National Tax Collection Act and notifying the donor of the tax payment (see Supreme Court Decision 88Nu2120, Jun.

Meanwhile, in principle, a claim that can be protected by the obligee’s right of revocation should have arisen before an obligor performs a juristic act for the purpose of property right with the knowledge that it would prejudice the obligee. However, at the time of the juristic act, there has already been a legal relationship which serves as the basis for the establishment of the claim, and there is high probability that the claim would have been created in the near future, based on such legal relationship, and in a case where a claim has been created due to the de facto realization in the near future, the claim may also become a preserved claim (see Supreme Court Decision 2000Da37821, Mar. 23, 2001

Then, although KimB's claim for the gift tax of this case was established after March through May 2008 on the gift of this case to the defendants, the claim for the gift tax of this case was already established on December 10, 2002, which was the transfer of each of the above gift contracts. However, according to the evidence No. 12, it is impossible to confirm the location of KimF on September 29, 1998 on the ground that it was impossible to confirm the location of KimF due to the unauthorized Transfer of the resident registration and the ex officio cancellation of the resident registration, etc., it can be recognized by the competent government office on October 4, 2010 that it transferred the resident registration to the OO-dong community service center at O-si O-dong on the date of signing each of the above gift contracts. Thus, it was highly probable that KimB, a joint and several tax obligor, was liable to pay the gift tax of this case before KimF's address and residence are unclear, and it is highly probable that the plaintiff's claim for the gift tax of this case was true in the near future.

2) In the case of each of the global income tax claims in 2002, 2003, and 2006

In cases where the tax authority deemed that the amount of gross income accrued from the company is reverted to an officer or employee and disposed of income as a bonus, unlike the fact that the withholding agent is liable on the date when the notice of change in the amount of income was served on the corporation as the payer of the amount of income concerned, the amount of income falls under the amount disposed of as bonus pursuant to the Corporate Tax Act under Article 20 (1) 3 of the Income Tax Act if the income is disposed of regardless of whether or not the notice of change in the amount of income is served on the corporation, and thus the amount of income is subject to taxation. The amount of income is the receipt date of the labor provided during the pertinent business year in which the disposition is subject to the imposition, and thus the liability to pay global income tax on the person to whom the income accrues shall come into existence at the time of the termination of the taxable period that is reverted as prescribed by Article 21 (1) 1 of the Framework Act on National Taxes (see Supreme Court Decision 2004Du944, Jul. 2

As seen earlier, the Central and Secondary Regional Tax Office imposed a change in the amount of income on KimB, 202, 203, and 2006, which constitutes a bonus under the Corporate Tax Act, and thus becomes subject to taxation of earned income tax. Each of the global income tax claims in the year 2002, 2003, and 2006, in which each of which belongs to the respective income, was established on December 31, 2002, and December 31, 2006, respectively. As such, each of the above tax claims was incurred prior to each of the above gift contracts, and may be the creditor's right of revocation's right of revocation in relation to each of the above gift contracts.

(b) Debtor's insolvent;

Around March 2008, when each of the above donations contract was first concluded, an active property of KimB was equivalent to KRW 65,052,243,684 as indicated in the aggregate column in the separate sheet among the inventory of KimB. However, the aggregate of the maximum debt amount of the right to collateral security established on each of the above real estates is KRW 31,260,00,000, and thus, KimB’s active property is ultimately KRW 33,792,243,684 (=65,052,243,684), and KRW 31,260,000).

The plaintiff asserts that the real estate of this case 1 and 2 should also be included in the KimB's active property. However, according to the result of the fact-finding on the realization market of this court, it can be acknowledged that on April 12, 2006, OOB held title trust with the case 1 and 2 real estate of this case to KimB a penalty surcharge under the Act on the Registration of Real Estate under Actual Titleholder's Name. Furthermore, in this case, there is no evidence to prove that each of the above real estate is owned by KimB because OO construction and KimB concluded the so-called contract title trust agreement with respect to the case 1 and 2 real estate of this case, the real estate of this case 1 and 2 cannot be included in the active property of KimB, and the plaintiff's above assertion is without merit.

Meanwhile, according to the result of the response to the order to submit financial transaction information to the National Bank Co., Ltd. as of September 13, 2013, KimB had already been held liable for joint and several liability of 00 won to the National Bank Co., Ltd. as of January 7, 2008, and such passive property exceeds the positive property. Therefore, KimB shall be deemed insolvent in excess of its obligation until March 2008. Unless there are special circumstances, it is reasonable to view that each of the above donations contracts made thereafter continued to have been insolvent even at the time of conclusion of the above gift contracts.

C. Establishment of fraudulent act

1) In the case of the instant 1 and 2 real estate

As seen earlier, the instant real estate 1 and 2 falls under the title trust real estate held by KimB from OB, and so, each of the said real estate is not owned by KimB, and thus, it cannot be deemed as a responsible property for general creditors of the debtor KimB to jointly secure, and even if each of the above real estate was donated to the defendant KimB, it cannot be deemed as a result of the decrease in the debtor’s responsible property (see Supreme Court Decision 2008Da41635, Sept. 25, 2008). Thus, it does not constitute a fraudulent act.

2) In the case of the instant 3, 4, 5, or 6 real estate

In the event that KimB, the taxpayer of the instant taxation claim, in excess of the debt, donated the instant 3 real estate to Defendant KimCC, the instant 4 and 5 real estate to Defendant KimD, and each donation of the instant 6 real estate to Defendant KimD constitutes a fraudulent act with the knowledge of the fact that the debtor’s excess of the debt and the lack of common security of general creditors would deepen the creditor’s joint security, which constitutes a fraudulent act, and the Defendants’ bad faith, the beneficiary, is presumed.

The defendants alleged that each of the above real estate belongs to KimB is nominal trust and shall not be included in the responsible property of KimB. However, it is not sufficient to recognize only the descriptions and images of the evidence Nos. 2 and 3-1 and 2 of the evidence Nos. 3-2, and there is no other evidence to acknowledge it. Thus, the above assertion by the defendants is without merit.

D. Sub-determination

Therefore, the gift contract between Defendant KimA and KimB on May 2, 2008, concluded on the instant 3 real estate on May 2, 2008, and between Defendant KimCC and KimB on March 11, 2008, concluded on March 11, 2008 with respect to the instant 4, 5 real estate, and between Defendant KimD and KimB, should be revoked as it constitutes a fraudulent act detrimental to the Plaintiff, who is the creditor of KimB, and the Defendants are obligated to implement the procedure for the cancellation of ownership transfer registration that was completed on each of the said 3 real estate to the Plaintiff.

4. Conclusion

Thus, the plaintiff's claim against the defendant KimA is justified within the above scope of recognition, and the remaining claims are dismissed without merit. Since each claim against the defendant KimCC and KimD is justified, it is so decided as per Disposition.