Plaintiff (Law Firm Lee Li-EL, Attorneys Yoon Young-young et al., Counsel for the plaintiff-appellant)

The Director of Gangnam District Office

September 29, 2016

Seoul Administrative Court Decision 2012Guhap29233 decided April 12, 2013

Seoul High Court Decision 2013Nu12128 Decided January 17, 2014

Supreme Court Decision 2014Du3471 Decided January 28, 2016

1. The plaintiff's appeal is dismissed.

2. One-fourth of the total costs of litigation shall be borne by the Defendant, and the remainder by the Plaintiff, respectively.

The judgment of the first instance is revoked. The Defendant revoked the part exceeding KRW 398,68,872 of the disposition of imposition of KRW 609,178,792 against the Plaintiff on July 6, 201 (the Plaintiff initially filed a lawsuit that “the portion exceeding KRW 253,60,000 of the disposition of imposition of KRW 1,030,40,760 against the Plaintiff on July 6, 2011 shall be revoked,” but the first instance court before remanded on December 24, 2013 that “the first instance court revoked the portion exceeding KRW 253,60,000 among the disposition of imposition of KRW 1,030,40,760 against the Plaintiff on April 6, 2011; the first instance court revoked the disposition of imposition of inheritance tax on the Plaintiff on April 206, 209; the Defendant did not first revoke the said disposition of imposition of inheritance tax on the Plaintiff on July 6, 2011.

1. Details of the disposition;

A. On April 5, 2009, Nonparty 1 (the Nonparty: hereinafter “the decedent”) died, and the Nonparty 2, Nonparty 3, Nonparty 4, Nonparty 5, and Nonparty 6, as his inheritor, did not report the taxable value and tax base of the inheritance.

B. As a result of the inheritance tax investigation conducted from November 15, 201 to April 11, 201, the Defendant issued a notice of KRW 1,030,404,761, calculated as indicated in the Schedule to the Plaintiff on July 6, 201, along with the following list of inheritance tax and joint and several tax payers, on the ground that the decedent did not file a return, even though he/she donated the land in Seocho-gu ( Address 1 omitted) and the land and its ground buildings sold in 2001, the sale price of the land and its ground buildings sold in 208, the Seoul Jongno-gu ( Address 2 omitted), and the sale price of the land and its ground buildings sold in 2008 to his/her heir, including the Plaintiff, to the heir, etc., on the ground that he/she did not file the return in advance. Of these, the amount of the tax payable by the Plaintiff is KRW 294,762,268 (No. 16, 2086).68).

Table â………………§) unit included in the main sentence: 4,439,510,580 (ju 2) 3,327,459,902-4 tax rate of 505 tax rate of 1,203,729,952-6 tax amount of 458,356,137 tax amount of 745,377 (5-6),8158, additional tax of 149,074,7639, 7639, 135, 135, 130, 103, 678 tax base of 3 (1-2) 3,327,45, 40, 404,761, additional tax of 149,07, 7639, additional tax of 135,956, 1830, 404,761.

Note 2) 4,439,510,580

C. The Plaintiff appealed and filed an appeal with the Tax Tribunal on January 31, 2012 on September 30, 201, but the Tax Tribunal dismissed the Plaintiff’s claim on April 4, 2012.

D. Since May 4, 2016, the Defendant notified the Plaintiff of the tax amount to be paid by the Plaintiff (294,798,802) and the Plaintiff’s joint and several tax liability ceiling amounting to KRW 609,178,792 (hereinafter “instant disposition”), which was received on May 11, 2016 by correcting the Plaintiff’s joint and several tax liability ceiling amounting to KRW 609,178,792 (hereinafter “instant disposition”).

[Ground of recognition] Facts without dispute, Gap evidence 1, Eul evidence 2-1, 2, Gap evidence 3, 5, Eul evidence 1, 3, 4, and 5, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

In calculating the “property received or to be received by a immediately preceding person” in Article 3(3) of the Inheritance Tax and Gift Tax Act and Article 2-2(2) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act, the donated property included in the calculation of the “property received or to be received by a immediately preceding person,” shall be the maximum amount of joint and several tax liability, where the remainder of the donated property less total liabilities to be borne by an heir and individual inheritance tax, from the sum of the donated property bearing the gift

As above, the Plaintiff’s inherited property value in relation to the joint tax liability limit is KRW 210,123,888 of the Plaintiff’s inherited property and KRW 729,00,00 of the donated property and KRW 210,846,530 of the donated property, and KRW 518,153,470 of the donated property. As such, the Plaintiff’s total amount of the Plaintiff’s inherited property is KRW 728,27,358 of the donated property (= KRW 518,153,470 + + KRW 210,123,888 of the total amount of the inherited property + KRW 35,146,218, and individual inheritance tax against the Plaintiff is KRW 294,762,268 of the total amount of the total amount of the property, the amount of joint and several tax liability to be borne by the Plaintiff is KRW 398,368,872,727,358,36,2816,264,267

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Article 3(1) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 9916, Jan. 1, 2010; hereinafter “former Inheritance Tax Act”) provides that an inheritor is obligated to pay inheritance tax at the rate calculated as prescribed by Presidential Decree based on the property each has received or is to be received from, among inherited property. Article 3(4) of the same Act provides that the said inheritance tax shall be jointly and severally liable to pay to the extent of “property each has received or is to receive” the heir or testamentary donee. Article 2-2(2) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 22042, Feb. 18, 2010; hereinafter “former Enforcement Decree of the Inheritance Tax and Gift Tax Act”). Article 3(4) of the former Inheritance Tax and Gift Tax Act provides that “property received or to be received by each person” means total amount of assets acquired by inheritance minus the amount of total liabilities imposed by inheritance and the amount of inheritance tax payable or to be paid by inheritance.

2) Comprehensively taking account of the purport of the entire pleadings in each statement in Eul evidence Nos. 1 through 5, the fact that the Plaintiff’s total amount of assets acquired by inheritance is KRW 939,123,888 (i.e., the value of inherited property + KRW 210,123,888 + KRW 729,00,000 as the donated property + KRW 35,146,294 (i.e., public charges + KRW 34,377,064 + funeral expenses + KRW 769,230). As seen earlier, the Plaintiff’s joint and several tax liability is 609,178,792 won (= KRW 939,123,888 won - KRW 35,146,294,294,798,80).

3) The Plaintiff asserts that the gift tax paid by the Plaintiff should be deducted in calculating the scope of the joint and several tax liability for inheritance tax. However, Article 2-2(2) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act only provides that “the amount of total assets acquired by inheritance and the inheritance tax imposed or to be paid due to inheritance” shall be deducted from the total amount of assets acquired by inheritance. In addition, the main sentence of Article 28(1) of the former Inheritance Tax and Gift Tax Act provides that the amount of the gift tax for donated property added to inherited property (referring to the amount of the gift tax for donated property at the time of donation) shall be deducted from the calculated amount of inheritance tax (including donated property added to inherited property; hereinafter the same shall apply) shall be limited to an amount calculated by multiplying the calculated amount of inheritance tax to be deducted from the calculated amount of inheritance tax (including donated property added to inherited property) by the rate of 00, which is added to the tax base of donated property paid by the Plaintiff to each heir or donee within the scope of 00, which is included in the inheritance tax base of inheritance tax or gift tax to be paid by the Plaintiff.

4) Therefore, the Plaintiff is obligated to pay KRW 294,798,802, which is the inherent inheritance tax according to the instant disposition, and the Plaintiff bears the joint and several tax liability with respect to the amount in arrears of other co-inheritors within the scope of KRW 609,178,792. Thus, the instant disposition is justifiable. The Plaintiff’s assertion on the premise that the ceiling of the joint and several tax liability to be borne by the Plaintiff is KRW 398,368,872 is without merit.

3. Conclusion

Therefore, the plaintiff's claim shall be dismissed as it is without merit, and the judgment of the court of first instance is just in conclusion, and it is so decided as per Disposition.

[Attachment]

Judges Cho Jong-sung (Presiding Judge)

1) Article 2-2(1) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 22042, Feb. 18, 2010)

2) The value of inherited property + KRW 754,194,96 for inclusion of the property, etc. disposed of prior to the commencement of inheritance + KRW 3,302,019,60 for the aggregate of donated property + KRW 2,797,019,60 for the heir + KRW 505,00 for a person other than the heir + KRW 223,450,914 for public imposts - KRW 5,000 for funeral expenses - KRW 5,00,000 for a person other than the heir