2014 Heavy0248

The disposition imposing gift tax on the money paid in return for the renunciation of inheritance is legitimate.

The amount of KRW 30 million that the plaintiff who renounced inheritance received from AA is ultimately distributed by AA to a model among his/her own property after inheritance, and constitutes donated property subject to gift tax under Articles 2 and 31 of the former Inheritance Tax and Gift Tax Act.

2014Gudan6777 Revocation of Disposition of Imposition of Gift Tax

OO

XX Head of tax office

2014.08.12

2014.08.26

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

The Defendant’s disposition of imposition of the gift tax on September 6, 2013 against the Plaintiff on September 28, 2013 (to be deemed as a clerical error in the statement on October 28, 2013) is revoked.

1. Details of the disposition;

A. On November 19, 2007, the Plaintiff received OOO members from Nonparty AA on or around November 19, 2007. Accordingly, the Defendant recognized it as a donation and determined and notified that OO members of the gift tax should be paid (including additional tax for failure to report and additional tax for failure to pay for failure to report) on the basis of the gift tax base after deducting OO members of the gift tax deduction among relatives as the gift tax base (hereinafter “instant disposition”).

B. After receipt of the above notice on October 28, 2013, the Plaintiff filed an appeal with the Tax Tribunal to the instant disposition, and subsequently filed an appeal with the Tax Tribunal, but was dismissed on March 13, 2014.

[Ground of recognition] Evidence Nos. 1, 7, Eul No. 1, and the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

The Plaintiff received an agreement on the division of inherited property with other co-inheritors in order for AAA, the head of the deceased BB (hereinafter referred to as “the deceased”) to receive compensation for expropriation of inherited property, as consideration for the Plaintiff received an agreement on the division of inherited property with respect to the waiver of inheritance with other co-inheritors. As such, the instant disposition is unlawful and thus should be revoked.

B. Relevant statutes

It is as shown in the attached Form.

(c) Fact of recognition;

(1) On November 1, 2002, the Deceased died with Nonparty CCC, children Nonparty DD, AAA, EE, FF, GG and Plaintiff.

(2) The deceased’s inherited property had 12 lots of real estate in OOO, OO, POO, and co-inheritors were seeking to pay compensation for the acquisition of public land by consultation with the OO Development Corporation and the OOO, and on November 1, 2007, the CCC received 3 lots, AAA, nine lots of land, and the remainder five children (Plaintiff, DDD, EE, FF, and GG) did not receive inherited property. On November 15, 2007, the ownership transfer registration was completed by dividing CCC and AA in the future due to inheritance by division.

(3) On November 19, 2007, the CCC received compensation OOOOOOO(s) and provided it to AA. AA out of the total amount of the said money and the compensation OOOOO(s) that it received, the AA paid OOOOOO(s) to the Plaintiff, the FF(s), the OOOO(s), and the DD(s) to the OOOO(s) and the EE(s).

(4) After that, the Plaintiff, FF, GG, and CCC filed a lawsuit against AA with the Suwon District Court Decision 2008Gahap6271 Decided September 10, 2009, but the decision dismissing the claim was rendered on September 10, 2009. On October 8, 2010, the Seoul High Court Decision 2009Na9890 on October 8, 2010, AACC paid OOOO to CCC, and the adjustment was established between the Plaintiff, FF, and GG that waives each claim.

[Reasons for Recognition] Each entry of Gap evidence Nos. 2 through 5, the purport of the whole pleadings

D. Determination

(1) According to the above facts, the plaintiff renounced the inheritance of the deceased through the agreement on the division of inherited property, and there is no evidence to deem that the agreement on the division of inherited property becomes null and void. Accordingly, the CCC and AA have succeeded to the deceased's property retroactively at the time of the commencement of inheritance, and the plaintiff is not the inheritor of the deceased (see Article 1015 of the Civil Act). Thus, the plaintiff's assertion that the plaintiff who renounced inheritance is the money distributed by AA to the siblings out of his/her own property after inheritance, which constitutes donated property subject to gift tax under Articles 2 and 31 of the former Inheritance Tax and Gift Tax Act (amended by Act No. 8828 of Dec. 31, 2007). The plaintiff's assertion that the above money is not subject to gift tax because it is inherited property cannot be accepted.

(2) Therefore, the Defendant’s disposition of this case is lawful, and there is no illegality as alleged by the Plaintiff.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.

Relevant statutes

/Gu Inheritance Tax and Gift Tax Act (amended by Act No. 8828 of Dec. 31, 2007)

Article 1 (Inheritance Tax Taxables)

(1) In case where, due to inheritance [including a testamentary gift, a donation becoming effective due to the death of a donor (including the relevant donation in case where a donor dies during the performance of a gift obligation under Article 14 (1) 3; hereinafter the same shall apply), and a distribution of inherited property to a special relative under Article 1057-2 of the Civil Act; hereinafter the same shall apply], there is inherited property falling under one of the following subparagraphs as of the commencement date of inheritance (in case inheritance commences due to an adjudication of disappearance, referring to the adjudication date of disappearance; hereinafter the same shall apply), the inheritance tax

1. In cases of the death of a person who has established a domicile in the Republic of Korea or has established a temporary domicile in the Republic of Korea for not less than one year (hereinafter referred to as a "resident"), all of the resident's inherited property (including property bequeathed by an ancestor and donated property becoming effective due

2. In case of the death of a person who is not a resident (hereinafter referred to as a "non-resident"), all of the inherited property of the non-resident in Korea;

Article 2 (Gift Tax Taxables)

(1) In case where, owing to a donation by a third party (excluding a donation becoming effective upon the death of a donor; hereinafter the same shall apply), there exists donated property on the donation date falling under one of the following subparagraphs, gift tax shall be levied, pursuant to this Act, on such donated property

1. Where a person to whom property has been donated (hereinafter referred to as a " donee") is a resident (including a non-profit corporation, the head office or main office of which is located in Korea; hereafter the same shall apply in this paragraph and Articles 54 and 59), all of the donated property received, as donation,

Article 31 (Scope of Donated Property)

(1) Gift property under Article 2 shall include property belonging to the donee, all articles having economic value capable of realizing in money and all de facto or de facto rights having property value.

Article 53 (Gift Property Deductions)

(1) In case where a resident receives a donation from a person falling under any of the following subparagraphs, the amount according to the classification of the following subparagraphs shall be deducted from the taxable amount of gift taxes. In this case, when the sum of the amount to be deducted within 10 years prior to the relevant donation and the amount to be deducted from the value of the relevant donation exceeds the amount stipulated in

3. 5 million won where a donation has been received from a relative who is not a spouse, or lineal ascendants or descendants.

Article 68 (Reporting of Tax Base of Gift Tax)

(1) A person liable to pay the gift tax pursuant to the provisions of Article 4 shall report the taxable value and tax base of the gift tax pursuant to the provisions of Articles 47 and 55 (1) to the head of the competent tax office having jurisdiction over the place of tax payment within 3 months from

Article 76 (Determination and Revision)

(1) The head of the tax office, etc. shall determine the tax base and tax amount according to the return under Article 67 or 68: Provided, That where the return is not made or there are omissions or errors in the returned tax base and tax amount, he shall determine