Review Transfer 2009-0144 (2009.07)

When the necessary expenses are recognized for the removal cost if the building is removed and only the land is transferred.

In the event that a building is demolished to use the land and its ground building together, and only the land is transferred, the purpose of only the land should be apparent by starting the removal of the building within a short time after its acquisition in order to include the acquisition value, removal cost, etc. of the removed building in the necessary expenses for the transferred asset included in the acquisition value of the land.

The contents of the decision shall be the same as attached.

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Head of Sungnam Tax Office

1. The plaintiff's claim is dismissed.

2. The plaintiff shall bear the litigation costs.

The Defendant’s disposition of imposition of capital gains tax of KRW 29,262,230 to the Plaintiff on December 15, 2008 shall be revoked.

1. Circumstances of the disposition;

A. ○○○○○○○○○-dong 23-2 large 4,433.5 square meters (in this land on September 26, 2003, the same 23-645.7 square meters (hereinafter referred to as “each of the instant lands in total before and after subdivision,” hereinafter referred to as “each of the instant lands”) was co-owned by Nonparty 1, his father, Nonparty 2, who is the Plaintiff’s father, owned the shares of 6085/16329, and the shares of 1024/16329 by Nonparty 2, who is the Plaintiff’s birth, [the shares of Nonparty HaCC and three children (hereinafter referred to as “HaCC et al.”)].

B. As the Plaintiff and its mother died on September 28, 1993, the Plaintiff and its mother jointly inherited the said shares of the previousA, and according to the statutory shares, D’s shares were 1073/16329, and the shares of the Plaintiff and their six siblings were 716/16329, and the shares of the date of initiation were HaCC et al.

C. On December 5, 2007, the Plaintiff sold his share in each of the instant land to the NA by Nonparty E, who is his own partner, Nonparty B, and completed the registration of ownership transfer on the 31st of the same month (hereinafter “instant transfer”).

D. On May 31, 2008, the Plaintiff filed a final return on transfer income tax pursuant to the transfer of this case with the transfer value of KRW 350,00,000, acquisition value of KRW 194,40,000, and necessary expenses of KRW 538,05,00 (amount of KRW 57,735,000, aggregate land tax of KRW 12,083,00, inheritance registration expenses of KRW 8,231,000, and the refund amount of lease deposit of KRW 46,00,000) to the Defendant on May 31, 2008.

E. On the other hand, the Defendant denied the necessary expenses reported by the Plaintiff which do not constitute necessary expenses under the Income Tax Act (amended by Presidential Decree No. 20720, Feb. 29, 2008) by deducting the estimated estimated amount of necessary expenses under Article 163(6) of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 20720, Feb. 29, 2008) from the estimated amount of necessary expenses under Article 163(6) of the Income Tax Act, set aside gains on transfer, and issued the instant disposition imposing capital gains tax of KRW 29,262,230 on the Plaintiff on December 11, 2008.

(f)The plaintiff filed a request for review on June 18, 2009 by the Commissioner of the National Tax Service, but was dismissed on July 7, 2009;

[Reasons for Recognition] Each entry of Gap evidence 1 to 4, Eul evidence 1 to 3

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

(1) Under the circumstances where the Plaintiff and the other inheritors jointly inherited shares of the formerA on each of the instant lands were unable to reach an agreement on the division of inherited property, the Plaintiff and the other inheritors acquired the inheritance registration of each of the instant lands upon application by subrogation of the inheritance tax authorities, and established a collateral security on each of the instant lands to secure high-amount inheritance tax obligations. Thereafter, in order to pay the above inheritance tax and manage existing bonds, the Plaintiff borrowed money from the △△ Fund and established a collateral security, but failed to reach an extension agreement on the loan period, and the auction procedure was underway on each of the instant lands. On November 26, 1999, co-inheritors, including the Plaintiff, leased each of the instant lands to the △△ Fund (hereinafter referred to as the “Seoul”), and repaid the debt to the above △△ Fund with the deposit, and cancelled the registration of the establishment of a collateral security on each of the instant lands including each of the instant buildings within four months from the date of the contract. However, the above lease agreement on each of the instant buildings including each of the instant buildings and each of the instant buildings.

As such, it is inevitable to return deposits received by the former and the former to each lessee for the normal use of each land of this case, and thus, the amount of the deposit returned should be deemed necessary expenses. In addition, in the case of acquiring real estate with the obligation to return deposit, it is apparent that such obligation is greater than the acquisition of real estate without such obligation, so such amount of the deposit returned shall be deemed as the expenses for the acquisition of the relevant real estate (hereinafter “claim 1”).

(2) The Plaintiff substituted the inheritance tax of each of the instant lands borne by the formerF and his family members by the transfer proceeds of this case and the costs in the litigation procedure therefor. Therefore, the amount of the pertinent inheritance tax paid should be deemed necessary expenses (hereinafter referred to as “the pertinent amount of the transfer proceeds”).

(3) The Plaintiff, other than his own, acquired and held shares in each of the instant lands on the part of his own, but did so by transfer without any particular benefits due to the burden of inheritance tax, etc., so the amount of the aggregate land tax paid to the Plaintiff has to be deducted as necessary expenses (hereinafter referred to as “principal”).

(4) At the time of inheritance of shares in each of the instant lands, the removal of each of the instant buildings was inevitable due to the aesthetic and safety problems at the time of inheritance, but it was not possible to remove each of the instant buildings because there was no agreement on the refund of deposit deposit for deposits and the division of inherited property for each of the instant buildings until the lease of each of the instant buildings was leased on the △ day. As such, the Plaintiff intended to use only each of the instant lands from the time of inheritance, and removed each of the instant buildings on November 1, 1999 to use only each of the instant lands, and transferred each of the instant lands in a situation where each of the instant lands was leased on the △ day. Accordingly, the costs of removal of each of the instant buildings should be deducted as necessary expenses (hereinafter referred to as the “principal 4

(5) If the costs of the removal of each of the instant buildings and the deposit for lease deposit, which is the premise cost for their removal, are not deducted from the necessary expenses, it would be unreasonably discriminated against the case where each of the instant buildings is acquired by inheritance without the consent of the Plaintiff, in a situation where there is no sufficient means to remove each of the instant buildings, as the Plaintiff, while purchasing old and old buildings and land in a lump sum, and immediately old buildings are also demolished (hereinafter referred to as “principal fifth”).

(6) The formerA’s share of each of the instant lands is KRW 47,502,790, and HaCC, etc., who was a substitute inheritor at the time of the pertinent inheritance registration, was unable to bear the relevant expenses because of the lack of financial resources. The remaining co-inheritors agreed with HaCC, etc. to bear the relevant inheritance registration expenses by representing the formerF. Accordingly, the Plaintiff’s legal share of KRW 1/8.5 of the above inheritance registration expenses was originally borne by 1/7.5 of the above inheritance registration expenses (hereinafter referred to as “State 6”).

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

(1) Determination as to claims 1, 2, 3

Article 97 (1) of the Income Tax Act (amended by Act No. 8825 of Dec. 31, 2007) and Article 163 of the Enforcement Decree of the same Act provide that when calculating gains on transfer, the capital expenditure, which is the cost paid or payable for the acquisition of the assets transferred to the organization which is the necessary expenses to be deducted from the transfer value, and the acquisition value, which is the expenses incidental thereto, and the capital expenditure, which is the expense to be disbursed to extend the lifespan of the asset transferred to the organization which is the necessary expenses to be deducted from the transfer value, shall be

However, even according to the Plaintiff’s assertion itself, the amount of return of deposit for each building of this case, the amount of inheritance tax paid, and the amount of aggregate land tax paid cannot be considered as the amount directly paid by the Plaintiff to acquire his/her shares in each building of this case, and does not constitute capital expenses or transfer expenses. Therefore, the argument ①, ②, and ③ are without merit (as to the Defendant’s assertion that the amount of debt of deposit for each building of this case was determined to be reduced by inheritance tax

(2) No. 4,55

The Plaintiff’s assertion based on the premise is without merit, on the sole basis of the Plaintiff’s evidence No. 20 (certificate) as to the Plaintiff’s submission, since there is no evidence to acknowledge that the Plaintiff actually assumed the removal cost of each building of this case.

If the Plaintiff was to bear the cost of removal, it can be acknowledged that the Plaintiff et al. agreed to transfer the existing building and the leased object to the △ day in a state without any legal limit on the removal of the existing building on January 26, 199 when concluding the lease contract with the △ day, and only the land was transferred to the △ day in order to include the acquisition value, removal cost, etc. of the removed building in the necessary expenses for the transferred asset included in the acquisition value of the land. However, the legal principle that the acquisition of the land and the building is clearly deemed to have been intended to only use the land by removing the building from the beginning to the beginning after the acquisition (Supreme Court Decision 89Nu53 delivered on January 25, 190). Thus, it is difficult to view that the Plaintiff et al. was to have agreed to transfer the building and the leased object to the △ day in a state without any legal limit on the removal of the existing building within four months from the date of the purchase of the land in this case.

(3) Judgment on the assertion 6

The facts that the inheritance registration expenses of the shares of each of the instant lands were 47,502,790 won by the parties, and according to the evidence No. 10, Jan. 19, 200, NF and HCC paid 400,000 won to HCC, etc. on Jan. 19, 200, HCC, etc., and HCC, etc. were 137-9 sites of △△△△△-dong 237-9, △△△△△-dong, ○○○○-2, ○○, ○○○, ○○, ○○○-dong, ○○, ○○, ○○ - - - 1 site and its ground buildings of 685-2, and 685-2, AA, which were succeeded from the former to transfer all ownership of property, and the formerF agreed to pay the remainder of the inheritance charges of the Plaintiff, etc., excluding the inheritance registration expenses of the former and the heir.

Accordingly, it is reasonable to view that the cost to be borne by the Plaintiff according to the Plaintiff’s statutory share of inheritance among the pertinent inheritance registration cost of KRW 47.502.790 is KRW 5,58,564 (i.e., KRW 47,502,790 x 1/8.5). However, as seen earlier, as seen in the background of the disposition above, the Defendant deducted KRW 5,832,00 from the necessary expenses and issued the instant disposition. Accordingly, the allegation 6 is without merit.

3. Conclusion

Inasmuch as the plaintiff's claim for objection is groundless, it shall be dismissed.