Cho Jae-2017-west-3680 ( November 29, 2017)

Assets acquired with money deposited from the account in the name of the decedent are unique property in the name of the acquisitor, and the acquired amount is recognized as having been donated by the decedent before the commencement of the inheritance.

Real estate, etc. acquired with money deposited from the account under the name of the decedent constitutes an acquired property under the name of the acquisitor, and accordingly, the plaintiff is presumed to have received money from the decedent before the commencement of the inheritance.

Article 2 (Gift Tax Taxables) of Inheritance Tax and Gift Tax Act

Article 13 of the Inheritance Tax and Gift Tax Act

Seoul Administrative Court 2018Guhap54071

○ ○

Head of △ Tax Office et al.

2, 2019.03

2019.04.30

1. All of the plaintiff's claims are dismissed.

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

Cheong-gu Office

The imposition of each gift tax on the Plaintiff on April 4, 2017 by Defendant 1 and the imposition of each gift tax on April 4, 2017 by Defendant 1,317,19,170 against the Plaintiff shall be revoked on April 4, 2017.

1. Details of the disposition;

A. On August 30, 200, the Plaintiff married with AA (hereinafter “the decedent”) on August 30, 200, and there is a child AB.

B. On May 28, 1984, the decedent married with CCC on May 28, 1984, but divorced on July 19, 200, and among them, ACC, AD, and AE are children.

C. On February 8, 2015, the decedent died, and on September 25, 2015, the offsprings of the Plaintiff and the inheritee reported inheritance tax amounting to KRW 5,815,567,143 on September 25, 2015, and paid KRW 1,262,00,000,000 of inheritance tax.

D. The Director of the Regional Tax Office of Manil, Inc. conducted an inheritance tax investigation on the Plaintiff from March 30, 2016 to September 15, 2016, and notified the Defendants of the taxation data that the amount deposited from the account under the name of the decedent from April 14, 2005 to February 19, 2014 to the account under the name of the decedent was the prior donation property of the decedent to the Plaintiff, and that the amount deposited from the account under the name of the decedent was the prior donation property of the decedent. Of the deposit deposit 1.4 billion won prior to the deposit deposited from the account under the name of the decedent, the amount equivalent to KRW 1/2 of the Plaintiff’s equity

E. On April 4, 2017, Defendant 1: (a) deemed that the sum of KRW 2,028,812,145 deposited in the name of the Plaintiff from the account held in the name of the decedent from 2009 to 2014 (hereinafter “the instant money”) was donated property prior to donation; and (b) imposed a disposition imposing gift tax amounting to KRW 913,843,240 on the Plaintiff (hereinafter “instant disposition imposing gift tax”).

F. On April 4, 2017, the head of the Defendant △△△ Tax Office imposed an inheritance tax of KRW 1,317,19,170 on the Plaintiff (hereinafter “instant disposition of imposition of inheritance tax”) on KRW 700,000,00,000,000, which is equivalent to the Plaintiff’s equity (1/2), among the total amount of KRW 1,400,000,000,000, which was deposited from the account held in the name of the heir and the instant monetary amount and KRW 1,317,000,000,000,000,000,000,000,

[Reasons for Recognition] Facts without dispute, Gap 1 to 3 evidence, Eul 2 and 15 evidence, the purport of the whole pleadings

2. The plaintiff's assertion

The tax authorities imposed each of the instant dispositions by deeming that the decedent donated the instant money to the Plaintiff on the sole ground that the decedent’s deposit was withdrawn from the decedent’s account and deposited to the Plaintiff’s account under the name of the decedent, but this is unreasonable on the following grounds

A. The decedent operated the hospital as a doctor, and the Plaintiff, while serving as a director of the above hospital, was dedicated to the operation of the hospital on behalf of the decedent and contributed enormously to the increase of the decedent’s property. Therefore, even if the decedent’s profits accrue to the hospital in the name of the decedent, this constitutes a public property of the Plaintiff.

B. Since the Plaintiff had transferred money equivalent to the money transferred from November 2003 to November 201, 2014 to the decedent’s account, it cannot be deemed that the instant money was donated.

C. Of the instant money, KRW 300,000,000 used to acquire the shares of the △△△△ mining in July 17, 2009 was transferred to the account held by the decedent in the name of the Plaintiff to acquire the shares. Even if the decedent acquired shares in the name of the Plaintiff, the Plaintiff was unaware of the acquisition of shares until the commencement of the inheritance. As such, the said shares should be included in the inherited property of the decedent, and cannot be deemed as having been donated by

3. Relevant statutes;

Attached Form 2 shall be as listed in attached Table 2.

4. Determination

A. Relevant legal principles

1) The Civil Act adopts the marital separation system regarding the method of devolving ownership of the property acquired by the married couple during marriage. In other words, the property acquired by one spouse under one spouse’s own name during marriage shall be the property owned by the spouse prior to marriage (Article 829(1) of the Civil Act). The property presumed to be jointly owned by the married couple only for the property whose existence is unclear among the married couple (Article 830 of the Civil Act), and the married couple shall separately manage, use, and take profit from the property (Article 831 of the Civil Act). In the foregoing regard, the former Inheritance Tax and Gift Tax Act (amended by Act No. 13557, Dec. 15, 2015) provides that the property transferred to the other spouse shall be deemed as donated to the spouse when the transferor transfers the property to the other spouse, and the value of the property donated by the inheritee to the inheritor within ten years prior to the date of commencing the inheritance (Article 44(1)1).

2) The burden of proving the existence of a taxation requirement fact is against the tax authority, but if it is revealed that the other party is presumed to have a taxation requirement fact in light of the empirical rule, the circumstances must be demonstrated that the other party is not subject to the application of the empirical rule. Since real estate acquired by one side of the married couple under Article 830(1) of the Civil Act is presumed to be the special property of the nominal owner, if it is apparent that the source of the real estate acquisition fund in question is the other spouse, not the nominal owner, the nominal owner may be presumed to have been donated the acquisition fund from the spouse (see, e.g., Supreme Court Decision 2006Du8068, Sept.

B. Determination

In full view of the following circumstances acknowledged earlier, the instant money is deemed to have been donated to the Plaintiff by the decedent prior to the commencement of the inheritance, and the instant disposition is lawful and the Plaintiff’s assertion is without merit.

(1) From April 14, 2005 to February 19, 2014, the tax authority shall grant the Plaintiff from an account in the name of the decedent.

Of the money deposited in the name of the account, it was determined that the money of this case was donated to the Plaintiff after excluding the confirmation of family living expenses and the money of the inheritee entrusted to the Plaintiff. There is no evidence to support that the money of this case was transferred to the Plaintiff under the name of living expenses or entrusted funds. Rather, the money of this case appears to have been paid for the acquisition of real estate, stocks, or membership under the name of the Plaintiff, and the Plaintiff did not clearly dispute the fact that the money of this case was used as

Deposit Date

The amount of entrance fee (won)

Deposit process, etc.

April 14, 2005

40,000,000

○○○-si ○○○-dong 239-14 outside 1

Some of 60 million won of down payment

may 13, 2005

200,000,000

○○○-si ○○○-dong 239-14 outside 1

Part of an intermediate payment of 600 million won

August 14, 2008

293,500,000

Use of money for the purchase of membership in the name of the plaintiff after receiving such money;

July 17, 2009

300,000,000

Acquisition of the Plaintiff’s mining shares in △△

November 12, 2011

43,000,000

○○○-si ○○○-dong 102-37

43 million won of down payment

December 22, 2011

64,000,000

○○○-si ○○○-dong 102-37

Any balance of 64 million won

April 26, 2013

141,000,000

○○○-si ○○○○-dong 102-37 Debt Repayment

May 13, 2013

300,000,000

○○○○-si ○○○-dong 239-14, 100,000 loaned in the course of acquisition to ○○ Bank

December 23, 2013

300,000,000

○○○-si ○○○-dong 12-19

Some of the down payment of 50 million won

February 6, 2014

274,000,000

○○○-si ○○○-dong 12-19

Any balance of 4,896.4 million won which is partially paid

February 19, 2014

73,312,145

명의 ★★CC 회원권 대금 지급

Total

2,028,812,145

② As above, the Plaintiff’s real estate, stocks, membership rights, etc. acquired with money from the decedent constitutes the Plaintiff’s unique property under the name of the decedent, and accordingly, the Plaintiff is presumed to have received money from the decedent. In reporting inheritance tax, the Plaintiff did not provide guidance to include the said real estate in the inherited property of the decedent.

③ On June 15, 1992, the decedent opened a hospital and operated the hospital under his/her name after registering its business, and the principal source of revenue from the property accumulated by the decedent is profits accrued from the operation of the hospital. According to Article 33(2) of the Medical Service Act, a person who may establish and operate a medical institution is a doctor, and an agreement between a doctor and a person other than a doctor is null and void in violation of the aforementioned Act, which is a mandatory law, and all the profits and assets acquired in relation to the operation of a medical institution are attributed to a doctor, and thus, it cannot be deemed that the Plaintiff operated the hospital under the name of the decedent jointly with the decedent on the ground that there are circumstances to deem that the Plaintiff contributed to a certain portion of the revenues

④ In addition, the Plaintiff earned earned a total of KRW 1,236,770,000 from the time he/she worked at the instant hospital from 2005 to 2014 when he/she married with the inheritee. However, it is unreasonable to view the income accrued to the hospital in the name of the inheritee beyond the above earned income as public property of the Plaintiff and the inheritee.

⑤ As long as KRW 300,00,000, which was deposited as of July 17, 2009, was transferred from the account under the name of the Plaintiff to the account under the name of the Plaintiff in order to acquire shares in the △△△ in the △△ mine in the name of the Plaintiff, the Plaintiff is deemed to have received the above amount of money. As long as the money was transferred to the Plaintiff’s account and the money for acquiring shares was withdrawn from the said account, it is difficult to deem that the Plaintiff did not recognize it. Furthermore, even if the Plaintiff did not know that the money was deposited in his own account or the Defendant acquired shares in his own name, the establishment of the gift tax does not affect the establishment of the gift tax insofar as one spouse had already satisfied the taxation requirements of the gift tax that requires the transfer of his own property to the other spouse. The Plaintiff submitted the case for adjudication on division of inherited property (the Seoul Family Court Decision 2015Du20000, 2017Hu2000, etc.) in the process of litigation and did not include the above shares of the inheritee.

(6) From April 14, 2005 to February 19, 2014, the amount corresponding to the instant money was frequently transferred from the Plaintiff’s account under the name of the decedent to the account under the name of the decedent. However, in full view of the following: (a) the Plaintiff did not have any other revenue sources other than the Plaintiff’s earned income; (b) the decedent received rebates from the pharmaceutical company, etc. while operating the hospital; and (c) when the pharmaceutical company, etc. deposited in the Plaintiff’s account under the name of the decedent, the Plaintiff transferred the money to the Plaintiff’s account and the Plaintiff received rebates by means of transfer of the money when the hospital’s operational funds are needed; and (d) the Plaintiff again received rebates from the decedent when the hospital’s operational funds are transferred to the decedent’s account, it cannot be concluded that the Plaintiff’s unique property was transferred to the decedent. As seen earlier, so long as it is presumed that the instant money was transferred to the decedent for the acquisition, etc. of the unique property under the Plaintiff’s name, even if the money donated to the Plaintiff had not been returned to the decedent.

5. Conclusion

The plaintiff's claim is dismissed in entirety as it is without merit. It is so decided as per Disposition.

1) As at the fourth date for pleading, the Plaintiff withdrawn the assertion that the deposit prior to the instant case did not constitute the inherited property of the inheritee, the Plaintiff did not make any determination thereon.