National High Court Decision 2006Du2798 ( November 03, 2006)

Dispositions imposed by using the officially assessed individual land price as acquisition value at the time of commencing the inheritance are legitimate.

Since the transferred real estate is the asset acquired by inheritance, and it is difficult to calculate the market price in relation to the acquisition value, the disposition imposing capital gains tax by using the officially assessed individual land price as the acquisition value at the time

2011Gu 1194 Revocation of Disposition of Imposing capital gains tax

x

O Head of tax office

May 17, 2011

June 14, 2011

1. The plaintiff's claim is dismissed.

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

On June 12, 2006, the Defendant confirmed that the imposition of capital gains tax of KRW 91,650,240 against the Plaintiff is null and void.

1. Details of the disposition;

A. On May 1, 1998, the Plaintiff acquired 1,101m2 (hereinafter “the instant real estate”) from Chungcheongnam-nam Eup 00-0,000 m2 (hereinafter “the instant real estate”) by inheritance, and transferred 6.5 billion won to O, etc. on August 25, 2005.

B. On October 2005, the Plaintiff filed a preliminary return on the tax base of transfer income for the year 2005 with the Defendant. On August 25, 2004, the Plaintiff calculated the transfer income tax by calculating the transfer income tax of Article 176-2 (2) 2 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 19254, Dec. 31, 2005; hereinafter the same) on August 25, 2004, on the ground that the daily price of the instant real estate was designated as a one-person speculation area under Article 96 (1) 6-2 of the former Income Tax Act (amended by Act No. 7837, Dec. 31, 2005; hereinafter the same shall apply) and paid the transfer income tax as the actual transaction price, on the ground that the actual transaction price is not verified.

C. However, since the Defendant acquired the instant real estate as a result of inheritance, its acquisition value shall be calculated as KRW 79,272,000, which is the value assessed according to the standard market price at the time of commencing the inheritance pursuant to Article 163(9) of the former Enforcement Decree of the Income Tax Act (i.e., KRW 72,000,000 per square meter of 101 square meter). On June 12, 2006, the Defendant decided to increase and notify the Plaintiff of KRW 91,650,240, the transfer income tax for the year 2005 (hereinafter “instant disposition”).

[Ground of recognition] Facts without dispute, Gap evidence Nos. 2 and 3, the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

The plaintiff asserts that the disposition of this case is null and void for the following reasons.

(1) According to Article 100 of the former Income Tax Act, when the transfer value is calculated based on the actual transaction value, the acquisition value shall also be calculated based on the actual transaction value. In this case, where the actual transaction value at the time of acquisition cannot be confirmed, it shall be calculated based on the conversion value prescribed in Article 176-2 (2) 2 of the former Enforcement Decree of Income Tax Act pursuant to Articles 97 (1) 1 (c) and 114 (5) of the former Income Tax Act. However, although the transfer value of the instant real estate is the actual transaction value, the Defendant made the instant disposition against the Plaintiff on the basis that the acquisition value is the standard market

(2) Although the instant real estate does not fall under the case of real estate designated as a designated area under Article 96 (1) 6-2 of the former Income Tax Act, the instant disposition imposing capital gains tax is deemed unlawful and invalid.

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

Article 94(1), the proviso of Article 96(1), and Article 97(1)1(a) of the former Income Tax Act provides that the transfer value and the acquisition value shall be calculated on the actual transaction value in the event that the assets fall under the real estate located within the speculative area. In this case, if the actual transaction value at the time of acquisition cannot be confirmed, the transfer value and the amount calculated by applying the transaction example value, appraisal value or conversion value prescribed by the Presidential Decree may be deemed the acquisition value. On the other hand, Article 163(9) of the former Enforcement Decree of the Income Tax Act provides that in applying the proviso of Article 97(1)1(a) of the Act to the assets inherited or donated, the value appraised pursuant to the provisions of Articles 60 through 66 of the former Income Tax Act as of the date of commencing an inheritance or donation shall be deemed the actual transaction value at the time of acquisition (see Article 163(9) of the Enforcement Decree of the Income Tax Act, where the actual transaction value of the assets donated or donated is calculated on the basis of Article 97(1) of the former Income Tax Act.

Therefore, the acquisition value of the real estate of this case shall be calculated according to the provisions of Article 97(5) of the former Income Tax Act and Articles 60 through 66 of the former Enforcement Decree of the Income Tax Act pursuant to Article 163(9) of the former Enforcement Decree of the Income Tax Act. Article 60 of the Inheritance Tax and Gift Tax Act provides that the value of the real estate of this case shall be calculated according to the market value as of the commencement date of inheritance as of the commencement date of inheritance in principle (Article 61(2) of the Inheritance Tax and Gift Tax Act) where it is difficult to calculate the market value as of the commencement date of inheritance (Article 61(3) of the Inheritance Tax and Gift Tax Act). In the case of the real estate of this case, as there is no data to recognize the market value as of the commencement date of inheritance under Article 60(1) and (2) of the Inheritance Tax and Gift Tax Act (Article 60(3) of the Inheritance Tax Act and Article 61(1)1 of the former Enforcement Decree of the Income Tax and Gift Tax Act, which the Defendant imposes the transfer income tax of this case as the acquisition value.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit. It is so decided as per Disposition.