Whether the acquisition value of inherited assets is illegal at the time of inheritance when calculating the acquisition value of inherited assets;

If an inheritance tax was imposed on a favorable tax amount due to the application of the standard market price at the time of inheritance, calculating the acquisition value of the transferred property by applying the standard market price is imposed in accordance with the consistent standard for reasonable grounds. Thus, the provision of this case reflecting this cannot be deemed an invalid provision that infringes on the property right.

Article 94 of the former Income Tax Act

Article 96 of the former Income Tax Act

1. The plaintiff's request is dismissed.

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

The Defendant’s disposition of imposing capital gains tax against the Plaintiff on July 19, 2007 shall be revoked.

1. Details of the disposition;

A. On September 19, 1987, the Plaintiff acquired 105- ○○○○○, ○○○○, ○○○○○, 6,893 square meters of forests and fields, 105- 1,285 square meters of forests and fields per annum (hereinafter “each of the instant real estate”) due to inheritance, and transferred each of the instant real estate to ○○○○○○, Inc. on September 5, 2006, to KRW 371,076,750.

B. The ○○○-gun located in each of the instant real property should be designated as a land speculation area on June 7, 2003, and calculate gains on transfer due to its real transaction value.

C. The Plaintiff filed a final return on capital gains tax with the actual transaction value on June 31, 2007, and paid KRW 9,270,870,870 as capital gains tax, which is calculated by the conversion value under Article 97(1)1(b) of the former Income Tax Act (amended by Act No. 8144, Dec. 30, 2006; hereinafter “ Income Tax Act”) and Article 176-2(2)2 of the Enforcement Decree of the Income Tax Act, to the acquisition value of each of the instant real estate to be deducted as necessary expenses.

D. However, in accordance with Article 163(9) of the Enforcement Decree of the Income Tax Act (hereinafter “the instant provision”), the Defendant considered the acquisition value of each real estate of this case as KRW 7,850,880, which was calculated as the officially announced land value at the time of commencing the inheritance, as the acquisition value of each real estate at the time of commencing the inheritance. On July 8, 2007, the Defendant issued a disposition to increase or impose the transfer income tax for the year 2006 as KRW 76,643,590 (hereinafter

[Reasons for Recognition] Facts without dispute, Gap evidence 1, 2-3-1 to 4, Gap evidence 6-1, and Gap evidence 9

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

(1) In cases where the actual transaction value at the time of acquiring land in the speculative designated area is unknown, the acquisition value of the asset inherited from the transfer value to the necessary expense amount to be deducted from the transfer value ought to be calculated by the transaction example value, appraisal value or conversion value under Article 97(1)1 (b) of the Income Tax Act. Thus, the Plaintiff’s report, which is calculated based on the conversion value

(2) The method stipulated in the instant provision, which the Defendant is the basis provision for the instant disposition, does not have any specific ground for delegation to the mother law, and in the case of assets acquired by inheritance, the actual market price at the time of acquisition is reduced. As such, the instant provision infringes on the people’s property rights and is null and void against the principle of excessive prohibition. Therefore, the instant disposition based on the instant provision is unlawful.

(3) If the Defendant is bound to calculate the acquisition value of each of the instant real estate based on the standard market price, the transfer value shall be calculated based on the standard market price pursuant to Article 100 of the Income Tax Act. However, while the acquisition value of each of the instant land is calculated based on the standard market price, the Defendant imposed the transfer income tax based on the actual transaction price, and thus, the instant

(b) Related statutes;

Article 94 of the former Income Tax Act

Article 96 of the former Income Tax Act

Article 97 of the former Income Tax Act

Article 100 of the former Income Tax Act

C. Determination

(1) Determination as to whether the delegation of the instant provision deviates from the limitation of delegated legislation

According to Articles 94(1) and 96(1), the proviso of Article 97(1)1(a) and (b) of the Income Tax Act, where the transferred assets are land within the speculative designated area, the transfer value and the acquisition value shall be calculated based on the actual transaction value in calculating gains. In this case, if it is impossible to confirm the actual transaction value at the time of acquisition, the amount calculated by applying the transaction example value, appraisal value or conversion value as prescribed by the Presidential Decree in sequential order may be deemed the acquisition value. Meanwhile, Article 92(5) of the Income Tax Act provides that “the necessary matters concerning calculation of necessary expenses such as the scope of the actual transaction value required for acquisition, calculation of the gift tax amount, etc.” In the application of the proviso of Article 97(1)1(a) of the Income Tax Act to the inherited or donated assets, the amount appraised pursuant to the provisions of Articles 60 through 66 of the Inheritance Tax and Gift Tax Act (hereinafter “Inheritance Tax Act”) as of the date of commencing the inheritance

In light of the purport of the above provisions, in case where assets other than the assets inherited or donated by transfer are calculated based on the actual transaction value pursuant to the proviso of Article 97 (1) 1 (a) of the Income Tax Act, if it is impossible to confirm the actual transaction value required for such acquisition, it shall be calculated based on the transaction example, appraisal value, or conversion value as prescribed by the Presidential Decree. However, in case where it is to be calculated based on the actual transaction value, there is no room for existence at the time of acquisition, and therefore, in case of the assets inherited or donated by inheritance or donation under the provisions of this case, it is necessary to establish separate provisions as to the actual transaction value at the time of acquisition. Accordingly, in case of the assets acquired by inheritance or donation, the value assessed pursuant to the provisions of Articles 60

Therefore, the provision of this case is based on Article 97 (5) of the Income Tax Act which delegates necessary matters concerning the calculation of necessary expenses such as the "scope of actual transaction price required for acquisition" so that it can be prescribed by the Presidential Decree, and thus, it cannot be deemed that the invalidation provision without delegation of the mother law is not the provision. In addition, in the event that assets inherited or donated are transferred, the transfer income tax can only be imposed if the value corresponding to the tax base of inheritance tax or gift tax (value assessed under Articles 60 through 66 of the Inheritance Tax Act as of the date of commencement of inheritance or donation) is recognized as necessary expenses for the calculation of transfer margin and the transfer value can prevent tax evasion or double taxation only when the transfer value exceeds the above value (see, e.g., Supreme Court Decision 2006Du1326, Oct. 26, 2007).

(2) Determination as to whether the instant provision violated the property right

In addition, according to the Inheritance Tax Act, the value of property falling under the tax base of inheritance tax or gift tax is, in principle, applied to the case where the market price is verified at the time of the imposition of the inheritance tax or gift tax, and where the inheritance tax or gift tax is imposed on the basis of the market price, the necessary expenses may be deducted from the imposition of the transfer income tax. However, if the imposition of the favorable tax by applying the standard market price was made on the ground that it is difficult to calculate the market price at the time of the imposition of the inheritance tax or gift tax, the necessary expenses recognized as the case based on the market price is less than the case based on the standard market price, and even if the burden of transfer income tax is somewhat increased on the basis of the standard market price, it is imposed in accordance with the consistent standard for reasonable reasons

(3) Determination on whether Article 100 of the Income Tax Act is violated

In calculating gains on transfer, Article 100 of the Income Tax Act provides that, if the transfer value is based on the actual transaction value, the acquisition value shall also be based on the actual transaction value, and if the transfer value is based on the standard market price, the acquisition value shall also be based on the standard market price. However, with respect to the acquisition value of each real estate of this case, the provisions of this case and Articles 60 and 61 of the Inheritance Tax Act stipulate that the standard market price at the time of commencing the inheritance of each real estate of this case shall be deemed the actual transaction value at the time of commencing the inheritance of the above real estate, the difference in transfer value

Furthermore, Supreme Court Decision 84Nu494 Decided December 11, 1984, which presented by the plaintiff as the basis for his own assertion, is in accordance with Article 170 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 10977 of December 31, 1982), which provides that "if either the transfer value or the acquisition value is determined based on the actual transaction value, the other one shall be determined based on the actual transaction value, and if either one is determined based on the standard market price, the other shall be determined based on the standard market price." The above Enforcement Decree provision, which is the basis for the above precedents, has already been amended several times, is inconsistent with Article 100 of the Income Tax Act and its detailed contents are different from the system and related regulations of the current Income Tax Act, and therefore the above precedent does not apply to this case, the plaintiff

D. Sub-committee

Therefore, the disposition of this case, which calculated capital gains tax by applying the standard market price at the time of commencement of the inheritance of each real estate of this case as the acquisition value, is lawful in accordance with the relevant laws and regulations, and the plaintiff'

3. Conclusion

Thus, the plaintiff's claim of this case is dismissed as it is without merit.