2015 ore730

The deduction of inheritance liability shall be allowed if it is clearly recognized that the decedent has to pay for his final obligation at the time of the commencement of the inheritance.

Inheritance liability deduction can be recognized as certain to be made by an ancestor with a final burden at the time of the commencement of the inheritance, and in imposing inheritance tax, the expenses incurred in acquiring a testamentary gift property shall not be deducted from the value of the inherited property.

The taxable value of inherited property under Article 13 of the Inheritance Tax and Gift Tax Act, public charges, etc. deducted from the value of inherited property under Article 14.

2015Guhap12045 Revocation of Disposition of Levying Inheritance Tax

KimA

BB Director of the Tax Office

October 29, 2015

November 26, 2015

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The Defendant’s imposition of KRW 000,000 against the Plaintiff on October 0, 2010 is revoked.

1. Details of the disposition;

A. The Plaintiff, as the heir of Masan00 (hereinafter “the decedent”) who died on October 0, 2013 (hereinafter “the decedent”), is operating from around October 1990 to around 000, 000 square meters of land and its ground buildings (hereinafter “each real estate of this case”) under the name of 00 mar, his spouse.

B. The current status of the establishment registration of a neighboring real estate established as security from around October 0, 1990 to the time the decedent died is as follows.

1) On October 0, 1990, the establishment registration of the real estate of this case was completed prior to the obligor’s 00, the mortgagee’s 00, the 00, the maximum debt amount, and the 000 won.

2) On October 00, 1990, the establishment registration of a mortgage was completed between the debtor and the inheritee, the mortgagee of the right to collateral security, and the maximum debt amount of 000 won. The maximum debt amount was changed to the maximum debt amount of 000 won on October 0, 200 and 00 on October 00, 200, respectively, and the cancellation was made on October 0, 200. The secured debt of the establishment registration of a collateral security at the time of repayment was about KRW 000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,00,00,00).

3) On October 0, 200, the date when the establishment registration of the neighboring mortgage was cancelled under the above 2, the establishment registration of the neighboring mortgage was completed on the debtor 00, 00 banks Co., Ltd., and the maximum debt amount 000 won. On the same day, the next 00 won was loaned from 00 banks Co., Ltd. (hereinafter “0 banks”) to 000 won (hereinafter “loan obligations against 00 banks”).

At the same time, the registration of the establishment of a neighboring mortgage was completed, and at the same time the registration was cancelled. On October 0, 2010, the Plaintiff reported inheritance tax to the effect that, on October 00, 2010, the Defendant did not pay the amount of inherited property as KRW 000 and the amount of inheritance deduction as KRW 000 (including the principal amount of loans to the inheritee’s 00 new cooperatives) to the Defendant.

D. From October 0, 2010 to October 00, 200, the Defendant conducted an inheritance tax investigation with respect to the Plaintiff, and conducted an inheritance tax investigation with respect to the land donated by the decedent to Kim 00, a grandchild around September 2010, added to the value of the inherited property; provided that the amount of KRW 000 out of the inheritance deduction amount deducted from the inherited property amount cannot be deemed as the inherited property’s obligation; accordingly, the Defendant denied the inheritance liability deduction on the ground that the inheritance deduction amount cannot be deemed as the inherited property’s obligation; and then, on October 0, 2014, determined and notified the Plaintiff of KRW 000 of the inheritance tax amount as KRW 00 of the inherited property deduction amount as KRW 00 (hereinafter “instant disposition”).

E. The Plaintiff dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal on October 0, 2014, but the Tax Tribunal dismissed the Plaintiff’s appeal on October 00, 2015.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1, 4, 5, Eul evidence Nos. 1, 2, and 5, the purport of the whole pleadings

2. The plaintiff's assertion and relevant Acts and subordinate statutes;

A. The plaintiff's assertion

In the following sense, loans and loans and loans and loans to 00 Jeju Bank with 00 persons following the inheritee’s full credit union should be deducted from the value of inherited property, and there is no inheritance tax to be imposed on the Plaintiff upon the deduction. Nevertheless, the instant disposition made on a different premise is unlawful.

1) There is a debt owed to a financial institution of the inheritee to be deducted as an inherited debt.

The obligation of loans to an inheritee against an inheritee to 00 new cooperatives is a obligation to a financial institution of the inheritee, and the next 00 loans from 00 bank to the inheritee to repay the obligation of loans to the inheritee to 00 new cooperatives. The actual debtor of loans to 00 bank of the above 00th 00, is the inheritee, so the above 000 won should be deducted as an inheritance obligation.

2) The obligations of loans to 00 banks in the following 00 should be deducted inasmuch as they are the expenses required to acquire testamentary gift property.

The Plaintiff received a legacy from the inheritee, and made an agreement between the inheritee and other inheritors on the condition of testamentary gift that the Plaintiff would assume the obligation of the inheritee. In the end, 000 won of the loan obligation to the next 00 bank, which is the cost of acquiring each of the instant real estate, should be naturally deducted from the inherited property.

(b) Related statutes;

It is as shown in the attached Table related statutes.

3. Determination

A. It is reasonable to view that there exists a debt owed to a financial institution of the inheritee to be deducted from the value of inherited property as an inherited debt and an obligation of the inheritee to be deducted from the value of inherited property is a debt which the inheritee is deemed to have to have to have to have been ultimately borne by the inheritee at the time of commencing the inheritance, and that the assertion and burden of proof as to its existence is in the taxpayer who contests the taxable amount of inheritance taxes (see, e.g., Supreme Court Decisions 83Nu410, Dec. 13, 1983; 2003Du9886, Sept. 24, 2004).

In light of the above legal principles, as seen earlier, the fact that there was no obligation to repay the debts to the full credit union under the name of the decedent at the time of the decedent’s death and the commencement of inheritance on March 26, 2013 is extinguished due to the repayment of the debts to the full credit union under the name of the decedent at the time of the decedent’s death, and the following circumstances, i.e., the following circumstances acknowledged by considering the overall purport of the pleadings, namely, the interest on the above loans at the time of the decedent’s death after obtaining loans from the Gwangju Bank on September 4, 2002, and there is no objective document that the actual debtor of the loans to the Gwangju Bank is the decedent at the time of the decedent’s death. In full view of the fact that there is no objective document that the borrower is the actual debtor of the loans to the Gwangju Bank, the borrower’s actual debtor of the loans to the Gwangju Bank cannot be deemed the decedent.

Therefore, it cannot be deemed that there exists a debt owed to a financial institution of the inheritee, which should be deducted as an inheritance debt, because it is recognized that the inheritee would have to perform its obligation with a final burden at the time of commencement of inheritance. Therefore, this part of the Plaintiff’s assertion

B. In light of the principle of no taxation without law, inasmuch as a loan obligation to Gwangju Bank in the name of 00 is required to acquire a testamentary gift property, it shall be construed as either a taxation requirement or a tax exemption requirement under the principle of no taxation without law, and the interpretation of the relevant tax laws and regulations shall not be extensively or analogically interpreted without reasonable grounds, barring any special circumstance. In particular, it accords with the principle of fairness to strictly interpret that a clear preferential provision among the requirements for reduction and exemption is deemed to be a provision of tax exemption (see, e.g., Supreme Court Decisions 2007Du9884, Oct. 26, 2007; 2010Do191, Jan. 27, 2011).

In light of the above legal principles, in imposing inheritance tax under the Inheritance Tax and Gift Tax Act on the instant case, there is no provision suggesting that the expenses incurred in acquiring a testamentary gift property shall be deducted from the value of the inherited property in case of the imposition of inheritance tax under the Inheritance Tax and Gift Tax Act, and it cannot be deemed that there exists any reasonable ground to deduct the expenses incurred in acquiring the testamentary gift property from the value of the inherited property by extensively interpreting or analogically interpreting the provisions of each subparagraph of Article 14(1) of the Inheritance Tax and Gift Tax Act applied in case where inheritance

4. Conclusion

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