[1] The legislative intent of Article 41-2(1) of the former Inheritance Tax and Gift Tax Act concerning the deemed donation of title trust property and the burden of proving that there was no "tax evasion purpose" under the proviso of Article 41-2(1)1 of the same Act (=the nominal holder)

[2] The case holding that it is difficult to deem that there was a "tax evasion purpose" under the proviso of Article 41-2 (1) 1 of the former Inheritance Tax and Gift Tax Act in a title trust of shares

[1] Article 41-2 (1) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 6780 of Dec. 18, 2002) (see current Article 45-2 (1)) / [2] Article 41-2 (1) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 6780 of Dec. 18, 2002) (see current Article 45-2 (1))

[1] Supreme Court Decision 95Nu9174 delivered on Aug. 20, 1996 (Gong1996Ha, 2898), Supreme Court Decision 99Du2192 delivered on Jul. 23, 199 (Gong1999Ha, 1818), Supreme Court Decision 98Du1313 delivered on Dec. 24, 199 (Gong2000Sang, 336), Supreme Court Decision 2003Du13649 Delivered on Dec. 23, 2004 (Gong2005Sang, 211), Supreme Court Decision 2003Du4300 Delivered on Jan. 27, 2005 (Gong2005Sang, 303Sang, 303Sang, 203Du736364 delivered on May 24, 2006)

[Judgment of the court below]

head of Sung Dong Tax Office

Seoul High Court Decision 2004Nu15323 delivered on October 12, 2005

The judgment below is reversed and the case is remanded to Seoul High Court.

We examine the grounds of appeal.

1. According to the reasoning of the judgment below, the court below rejected the plaintiff's assertion that the non-party 3's title trust of the shares of this case to the plaintiff was aimed at meeting the qualification requirements necessary for acquiring the shares of this case from the Korea Broadcasting System not to avoid taxes such as gift tax, but rather, in light of the fact that the purchase price in the non-party 1 and the non-party 2 was deposited in the deposit account in the non-party 3's name, it cannot be concluded that the non-party 3 did not have any purpose of tax avoidance, such as avoiding disadvantages under the tax law that the non-party 3 would receive as an oligopolistic shareholder in the title trust of the shares of this case and reducing the burden of global income tax, and the defendant was justified to impose the gift tax of this case on the plaintiff pursuant to Article 41-2 (1) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 6780 of Dec. 18, 202, hereinafter the same).

2. However, it is difficult to accept the above determination by the court below for the following reasons.

The legislative purport of Article 41-2(1) of the former Inheritance Tax and Gift Tax Act is to recognize an exception to the principle of substantial taxation to the purport that the act of tax avoidance using the title trust system is effectively prevented, thereby realizing the tax justice (see Supreme Court Decision 2003Du13649, Dec. 23, 2004, etc.). Thus, if the title trust was recognized to have been conducted for any reason other than the purpose of tax avoidance, and it is merely a minor reduction of tax incidental to the said title trust, such title trust cannot be deemed to have the "purpose of tax avoidance" as stipulated in the proviso of the same Article, and the burden of proving that there was no purpose of tax avoidance in the title trust exists the person who asserts it.

However, according to the facts and records established by the court below, the Korea Broadcasting System was changed to the Korea Broadcasting Corporation 1, 30,000, 199. 2, and the Korea Broadcasting Corporation 310,000 shares (66%) were sold to the public for the privatization of the KB 1, 310,000 shares owned by the Korea Broadcasting Corporation 1, 40. 8,000 shares were purchased from the Korea Broadcasting Corporation 9, 199. 7,000. 8,000 shares were purchased from the Korea Broadcasting Corporation 9. 7,000. 9,000 shares were purchased from the Korea Broadcasting Corporation 9. 7,000,000,000,000 won. 9. 8,000 shares were purchased from the Korea Broadcasting Corporation 9. 7,000,000 won. 9,000 shares were owned by the 19. 7,07,000 shares shares shares shares were purchased.

In light of these facts, Nonparty 3’s acquisition of the instant shares in the name of the Plaintiff appears to have been required by the person with experience in the broadcasting station for over 15 years, which is the qualification requirements for acquiring the shares of the KBS Production Group. Furthermore, even if Nonparty 3 acquired the instant shares in its own name, it does not constitute an oligopolistic shareholder subject to the secondary tax liability or deemed acquisition tax under the Framework Act on National Taxes and the Local Tax Act, even if Nonparty 3 acquired the instant shares in its own name, it does not fall under the oligopolistic shareholder. Furthermore, even if Nonparty 3 is deemed to have acquired each of the instant shares in the name of Nonparty 1 and 2, it does not fall under the oligopolistic shareholder even if Nonparty 3 acquired the shares in the name of the same person, it cannot be deemed that Nonparty 3 had a purpose of evading the secondary tax liability or deemed acquisition tax as an oligopolistic shareholder at the time of the above title trust, and it is difficult to view that Nonparty 3 was not subject to the said global income tax evasion rate, even if it did not have been related to the instant shares under title trust.

Nevertheless, without any reasonable explanation on the circumstances leading up to which Nonparty 3 made the title trust of the shares of this case to the Plaintiff, the court below held that the title trust of this case cannot be readily concluded that there was no tax avoidance purpose. In so doing, the court below erred by misapprehending the facts contrary to the rules of evidence or by misapprehending the legal principles as to the purpose of tax avoidance, thereby affecting the conclusion of the judgment. The ground of appeal assigning this error has merit.

3. Therefore, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Son Ji-yol (Presiding Justice)