Whether capital gains tax is exempted in cases where a resident registration has not been made but the wife (the wife was registered as the resident) actually resided in a transferred house for at least six months (affirmative)

Even if the owner of a house does not have registered as a resident, he/she has formed one household with his/her wife and actually resided in the house for not less than 6 months, and his/her wife has resided in the house for not less than 6 months, so long as his/her resident registration has been made, income arising from transfer of the house constitutes non-taxable income.

Article 5 subparagraph 6 (i) of the Income Tax Act, Article 15 (1) of the Enforcement Decree of the Income Tax Act, and Article 15 (7) of the Income Tax Act

[Judgment of the court below]

Head of Central Tax Office

Seoul High Court Decision 80Gu610 decided August 18, 1981

The appeal is dismissed.

The costs of appeal shall be borne by the defendant.

The grounds of appeal by the defendant litigant are examined.

1. According to Article 5 subparagraph 6 (i) of the Income Tax Act and Article 15 (1) (main sentence) of the Enforcement Decree of the same Act, the so-called “one house for one household” and the appurtenant land shall not be subject to capital gains tax on the income accruing from the transfer of one house owned by one household and resided in Korea for not less than 6 months by one household comprised of one resident and his/her spouse together with his/her family living together with the same address or same place of residence. Article 15 (7) of the Enforcement Decree of the same Act provides that “The number of months of residence prescribed in paragraph (1) shall be calculated based on the number of months from the date of transfer under the resident registration card to the date of transfer”

2. However, according to the reasoning of the judgment below, the plaintiff acquired 29 square meters in Seongdong-gu Seoul Metropolitan Government's ○○○ Housing and 18 square meters in its ground building (hereinafter "○○ Housing") on March 17, 1979, based on facts without dispute and evidence, and the court below determined that the plaintiff did not actually reside in the above ○○○○○ Housing and 6-dong Housing, and that the plaintiff did not actually reside in the 19-dong Housing and 9-dong Housing, and that the plaintiff did not have a duty to pay capital gains tax on the transfer income of ○○ Housing and 17-dong Housing as stated in its judgment from around 1968, and that the plaintiff did not have a duty to pay capital gains tax on the 19-dong Housing and 9-dong Housing and did not have a duty to pay capital gains tax on the 19-dong Housing. However, the court below's decision that the plaintiff did not have a duty to pay capital gains tax on the 19-dong Housing and 2-dong Housing.

Therefore, the appeal is dismissed, and the costs of the appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Kim Young-ju (Presiding Justice)