Article 35 (1) 3 of the Framework Act on National Taxes and Article 18 of the Enforcement Decree of the same Act shall mean "Inheritance tax imposed on property offered as security".

According to Article 35(1)3 of the Framework Act on National Taxes and Article 18 of the Enforcement Decree of the same Act, national taxes, such as inheritance tax, etc., established one year prior to the due date for payment of national taxes such as inheritance tax, shall take precedence over national tax claims: Provided, That national taxes, such as inheritance tax, imposed on property offered as security, shall take precedence over mortgage claims even if the establishment of mortgage, etc. was established one year prior to the due date for payment of national taxes. The amount of inheritance tax imposed on property refers only to the amount equivalent to the total amount

Article 35 (1) 3 of the Framework Act on National Taxes, Article 18 of the Enforcement Decree of the Framework Act on National Taxes

Plaintiff 1 and four others, Counsel for the plaintiff-appellee-appellant

Head of the tax office

Seoul High Court Decision 86Gu111 delivered on October 7, 1986

The appeal is dismissed.

The costs of appeal are assessed against the plaintiffs.

We examine the grounds of appeal.

According to Article 35 (1) 3 of the Framework Act on National Taxes and Article 18 of the Enforcement Decree of the same Act, national taxes, such as inheritance tax, etc., established one year prior to the due date for payment of national taxes such as inheritance tax, etc., shall take precedence over national tax claims: Provided, That national taxes such as inheritance tax, etc. imposed on property offered as security shall take precedence over mortgage bonds, etc., even if the establishment of mortgage, etc. was established one year prior to the due date for payment of national taxes. The amount of inheritance tax imposed on property referred to in this context refers

Because the purport of the provision of the above law is to secure the collection of national taxes and to protect the secured creditors, if the total amount of the inheritance tax on the entire inherited property is priority over the mortgage, etc., the entire amount of the inheritance tax is first collected from the proceeds of the public sale. Therefore, if the total amount of the inheritance tax is more than the proceeds of the public sale of the property, the secured creditors, etc. cannot be fully protected, thereby unfairly infringing on the effect of the mortgage, etc., and in addition, if the total amount of the inheritance tax is more than the proceeds of the public sale of the property, it would result in an unrest problem in the safety of the transaction by the public sale of the real property on which mortgage, etc. is not established, even though the mortgage is not established in order to escape the repayment of the secured debt by the inheritance tax obligor and the tax authority, and thus, it would result in a loss without meaning the secured creditor by the public sale of the real property on which the mortgage, etc. is settled, but if only the amount equivalent to the ratio of the total appraised value of the property on the aggregate amount of the inheritance tax, it can realize the remaining claims by the third party.

In addition, such an interpretation is not contrary to the provisions of Articles 1 and 2(1) of the Inheritance Tax Act.

In the same purport, it is reasonable that the court below ruled that only the appraisal ratio of the total amount of the inheritance tax of this case to the total amount of the inheritance tax of this case shall take precedence over the mortgage claim of this case in the distribution of the public auction proceeds for the public auction proceeds of this case except for the expenses for disposition on default of expenses for the public auction proceeds, and that the defendant's disposition on the distribution of the public auction proceeds of this case is correct, and therefore,

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the plaintiffs. It is so decided as per Disposition by the assent of all participating Justices.

Justices Kim Jong-hee (Presiding Justice)