A. Scope of application of Article 32-2(1) of the former Inheritance Tax Act (amended by Act No. 4283 of Dec. 31, 1990) concerning deemed donation

(b) The case holding that the above provision of Paragraph (a) cannot be applied unless the gift tax was made with an intention to avoid the gift tax even if the title of registration was made by means of a temporary measure to avoid the financial system and to escape the imposition of high rates of local taxes;

A. The legislative intent of Article 32-2(1) of the former Inheritance Tax Act (amended by Act No. 4283, Dec. 31, 1990) is to prevent the abuse of the title trust system as a means to avoid gift tax with respect to the property that requires the transfer or exercise of the right to transfer or exercise of the right, and thus, if the title of registration, etc. is not to avoid gift tax, but to avoid the legal limitation or other similar circumstances, it shall not be deemed a gift.

(b) The case holding that the provision on the constructive gift of paragraph (a) above cannot be applied if the construction company was made temporarily in order to avoid financial sanctions against the financial institution and to avoid the imposition of high rates of local taxes, and it is not aimed at evading gift tax, on the ground that the title of registration of ownership transfer on real estate differs from that of registration.

A.B. Article 32-2(1) of the former Inheritance Tax Act (amended by Act No. 4283 of Dec. 31, 1990)

A. (B) Supreme Court Decision 90Nu240 delivered on Nov. 13, 1990 (Gong1991, 118), Supreme Court Decision 90Nu2321 delivered on Nov. 23, 1990 (Gong1991, 253) delivered on March 10, 192, Supreme Court Decision 91Nu3277 delivered on March 10, 1992 (Dong Branch Decision 91Nu13618 delivered on March 13, 192)

[Judgment of the court below]

The director of the tax office.

Seoul High Court Decision 89Gu10939 delivered on April 2, 1991

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

We examine the grounds of appeal.

Article 32-2 (1) of the former Inheritance Tax Act (amended by Act No. 4283 of Dec. 31, 1990) provides that the purpose of legislation is to prevent the abuse of the title trust system as a means to avoid gift tax with respect to the property that requires the transfer or exercise of the right. Thus, if the title of registration, etc. differently comes to fall under the name of the title trust rather than to avoid gift tax, but due to statutory restrictions or other similar inevitable circumstances, it shall not be deemed a gift (see, e.g., Supreme Court Decision 90Nu240 delivered on Nov. 13, 1990; 90Nu2321 delivered on Nov. 23, 1990). Thus, the court below's decision that the ownership transfer registration of the real estate of this case, which was made in the future of the plaintiff, was made for the purpose of evading gift tax by a financial institution and collecting local taxes as stated in its reasoning, and thus, it is not proper to apply the above provision to the judgment below.

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 Kim Yong-ju (Presiding Justice)