Seoul Administrative Court 2012Guhap20830 (29 March 2013)

Seocho 2012,0515 (Law No. 112, 03.30)

The initial disposition based on the premise that the trust was made by showing the shares donated in light of all the circumstances is unlawful.

It is reasonable to view that the shares of this case are not nominal trust, in light of all the circumstances, such as the fact that the company has worked for a long time and received shares as a donation of contributions to the company, and that the plaintiffs received a judgment against the company in the lawsuit to confirm the shareholders' rights of this case.

Article 45-2 of the Inheritance Tax and Gift Tax Act

2013Nu12470 Revocation of Disposition of Imposing inheritance tax, etc.

1. The Gima 2. Gimb

The head of Yangcheon Tax Office

Seoul Administrative Court Decision 2012Guhap20830 decided March 29, 2013

October 25, 2013

December 13, 2013

1. The following part of a judgment in the first instance shall be revoked:

On June 14, 2011, the part of the disposition imposed by the Defendant against the Plaintiffs on the imposition of the inheritance tax OOO(including additional tax) exceeds the OOOO won shall be revoked.

2. Of the total litigation costs, the part arising between the Plaintiff KimA and the Defendant shall be borne by the Defendant, while the part arising between the Plaintiff KimB and the Defendant shall be borne by the Plaintiff KimB, and 95% by the Defendant respectively.

Cheong-gu Office

On June 14, 2011, the part that exceeds OOO(including additional taxes) among the disposition of imposition by the Defendant against the Plaintiffs of the inheritance tax on the same day and the part that exceeds the OOOO(including additional taxes) among the disposition of imposition by the Plaintiff KimB of the gift tax (including additional taxes) shall be revoked (the Plaintiff reduced the claim on the disposition of imposition by the inheritance tax OO(including additional taxes) at the trial as above).

subsection (1)

[Plaintiff KimB did not appeal as to the imposition of the gift tax OO(including the additional tax)] as set forth in the disposition.

1. Details of the disposition and related statutes;

The same shall apply to the corresponding part of the judgment of the first instance.

2. The plaintiffs' assertion

The largestCC’s donation of FF’s shares 2,00 shares upon recognition of FF’s contribution to the EEA and FF for a long time from DoD, and thus, the instant inheritance tax disposition based on the premise that DoD held the largestCC a title trust for the said shares is unlawful.

3. Facts of recognition;

A. On September 23, 2008, JungG deposited cashier’s checks from among the OOO directors received as the share transfer price to the account of Plaintiff KimA on February 17, 2009, and on October 12, 2009, the cashier’s checks from the OOO directors were used for the payment of the gift tax by Plaintiff KimB on October 12, 2009.

B. JungG and LCC did not exercise shareholder rights, such as participating in the acquisition procedure of the instant shares or demanding distribution, and did not pay gift tax on the instant shares.

C. Around February 1988, the largestCC became a member of the ECE System operated by the ECE and was in charge of importing factory automation equipment and parts from the HH company, the customer, and retired from the ECE on July 31, 2006.

D. AD on June 29, 2006, established FF which manufactures factory automation facilities and components imported in Japan, and the largestCC had been employed in FF and worked as technical directors around that time while working as technical directors, and has been in charge of concluding licensing contracts with III and developing product production technology.

E. After the death of MaD, unlike the allegations by the Plaintiffs in this case, the Plaintiffs filed a lawsuit against the largestCC by asserting that 2,000 shares of the FFF shares in the name of the largestCC was nominal trust from MaD and filed a lawsuit seeking confirmation of ownership of the said shares with the Incheon District Court Branch Branch Decision 201Kahap6280. The highestCC asserted that the FF shares were owned by itself in the said lawsuit and was sentenced to the judgment against the Plaintiffs on April 5, 2012, and the said judgment became final and conclusive as the Plaintiffs did not file an appeal.

F. On December 27, 2010, the Seoul Regional Tax Office had been investigated on December 27, 2010, saying, at the time when the Seoul Regional Tax Office had been investigated, that it would assist the President of the GangnamJ in doing work with awareness that part of FF’s shares would be reduced.

The court stated that "I think I think I will not pay the shares because I did not pay the shares because I received the shares free of charge from ID, but in the name of the document, I testified to this effect even if I appeared as a witness of the first instance court of this case," and "IJ, the representative director of FF, made a testimony to this effect", "IJ, the representative director of FF, was present as a witness of the first instance court of this case, and made a lot of contribution from EEA to the largestCC by working for a period of 20 years."

F has testified to the effect that FF's shares have not been distributed up to now, "No evidence has been made", "No evidence Nos. 1, 5, 10, 12, and 14 (including paper numbers), each of the testimonys and arguments of the first instance court witness J, the highestCC, and the purport of the whole pleadings"

4. Determination

A. Whether DaD has held title trust with FF’s stocks to the largestCC

A person registered as a shareholder in the register of shareholders is presumed to be the shareholder of the company, and in order to reverse this, there is a burden of proof on the part of denying the shareholder's right. Thus, in order to assert that the name of the shareholder in the register of shareholders was trusted and that of the person in whose name the person in whose name the name the person in question is nominal, the fact of borrowing the name should be proved (see Supreme Court Decision 2007Da27755, Sept. 6, 2007).

In light of the above legal principles, as seen earlier, it is recognized that AD paid 2,000 FF shares in the name of the largestCC instead of the FF shares price, and that LCC did not pay gift tax on stock price. However, it is insufficient to recognize that FF shares in the name of the largestCC was nominal trust from AD solely on the basis of such fact.

Rather, the following circumstances revealed in the above facts: ① the bestCC worked for about 18 years in ECE airspace operated by DaD; ③ the FF’s working as a technical director of Dodddd's Doc's Doc's Doc's Doc's Doc's Doc's Doc's Doc's Doc's Doc's Doc's Doc's Doc's Doc's Doc's Doc's Doc's 39% at the time of its establishment; ② the Doc's Doc's Doc's Doc's 30% at the time of its establishment; ② the Doc's Doc's Doc's Doc's Doc's Doc's Doc's Doc's Doc's Doc's la's Doc's Doc's Doc's 20.

Therefore, the instant disposition imposing inheritance tax, based on the premise that the FF shares in the name of the largestCC were nominal trust from DoD, is unlawful.

(b) Justifiable tax amount;

2,000 FF shares in the name of the largestCC do not constitute a title trust with the largestCC, and thus, the amount of OOO shares shall be deducted from the inherited property. OOOO shares which have been donated to the largestCC by Doddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddd

5. Conclusion

Therefore, the part of the inheritance tax disposition of this case exceeding the OOO won is illegal, and thus, the judgment of the court of first instance is unfair in some different conclusions, so it is so revoked and it is so decided as per Disposition by the decision of the court of first instance to revoke the part exceeding the OOO won of the disposition of this case.