Seoul Administrative Court 2010Guhap26636 ( August 25, 2011)

early 2010west0478 (29 March 29, 2010)

Imposition of gift tax on title trust with the purpose of tax avoidance is legitimate.

It is determined that stocks that are not leased are held in title trust, and the amount of tax reduced according to the tax base, etc. of dividend income or global income tax may vary significantly, and thus it cannot be concluded that gift tax is merely a minor reduction of tax. Therefore, gift tax

2011Nu33282 Revocation of Disposition of Imposition of Gift Tax

Republic of Korea, Japan and one other

Head of Yeongdeungpo Tax Office

Seoul Administrative Court Decision 2010Guhap26636 decided August 25, 2011

April 18, 2012

May 16, 2012

1. All appeals by the plaintiffs are dismissed.

2. The costs of appeal are assessed against the Plaintiffs.

The judgment of the first instance shall be revoked. The defendant shall revoke the imposition of gift tax of KRW 000 against the plaintiffs on October 1, 2009, respectively.

1. cite the judgment of the first instance;

The reasons why the court has used the case in this case are as follows, except for the addition of the judgment on the allegations made at the trial of the plaintiff, the reasons for the judgment of the court of first instance are as follows. Pursuant to Article 8(2) of the Administrative Litigation Act and the text of Article 420 of the Civil Procedure Act.

O The following shall be added to the end of the seventh eightth:

ThisA lives with pride without any particular income.

The following shall be added to the 11th "not to be shorter than the 3th "......"

In fact, Plaintiff B made a statement (Evidence A No. 27) to the effect that “I would have been solicited to make an investment in XX and to make a profit more than the bank due to the bank’s deposit in the examination procedure of the Seoul Administrative Court 2010Guhap31867 in the Seoul Administrative Court 2010-Gu 31867 in the case of the revocation of the disposition of the gift tax imposition,” and it appears that the dividend income that could be received from XX would not have been much.

2. Additional determination

A. The plaintiff's assertion

1) The Defendant, by deeming that the Plaintiff next B B’s groundCC donated the O-Industrial Shares, imposed gift tax on the UCC. It belongs to the UCC that received by selling the deemed O-Industrial shares, and the UCC acquired shares in the name of the Plaintiff E-F using the said money. However, the Defendant, on the premise that the sales price of the O-Industrial shares deemed donated to U.S. is attributed to the Plaintiff nextB, again, deemed that the Plaintiff nextB again held the shares held in trust with the Plaintiff A-B to thisF, and thus, the restriction on donation is against the principle of no taxation without law, by deeming that the restriction on donation was arbitrary interpretation without consistency, on the premise that the sales price of the O-Industrial shares deemed donated to U.S. is attributed to the Plaintiff ABB.

2) The UCC only acquired the O industry shares with the borrowed money from Plaintiff teaB and acquired the shares in XX shares with the proceeds from the sale of shares. The Defendant’s imposition of gift tax on the O industry shares acquired according to the UCC’s standards constitutes double taxation to impose gift tax again on the shares with the same source of taxable capacity by acquiring the O industry shares from the purchase price for the O industry.

B. Determination

1) As to the first argument

Article 45-2 of the former Inheritance Tax and Gift Tax Act provides that the title trust system shall be deemed a donation to the extent that it is intended to realize tax justice by preventing abuse of the title trust system as a means of tax avoidance as one of the exceptions to the substance over form principle, and thus, does not change whether the title trust property belongs to the title truster (see Supreme Court Decision 2004Du11220, Sept. 22, 2006).

Even if it is deemed that a donation was made to the OO industry and gift tax was imposed, it does not belong to the stock-basedCC. The sales price of the O industry shares belongs to the Plaintiff nextB, the title truster, and the Plaintiff nextB acquired the shares XX with the money borrowed from the name of the Commission and then the Plaintiff nextB acquired the shares in question. As such, the Plaintiff next B made a title trust on the said shares to the Plaintiff A. The deeming of the title trust as a donation does not violate the LL legal principle as stipulated in Article 45-2 of the former Inheritance Tax and Gift Tax Act. If a title trust is possible, each title trust is deemed to be a separate donation, and thus, each title trust is deemed to be a separate donation, and thus, it does not violate the tax equality principle, as the case of purchasing shares with the actual donation,

2) As to the second argument

The imposition of gift tax to the UCC is about the title trust of the O-industry shares made to the plaintiff nextB reasonsCC, and the imposition of gift tax to the plaintiff thisA is not a double taxation on the consignment of the shares in XX to the plaintiff nextB separately from the plaintiff nextB.

3. Conclusion

All appeals by the plaintiffs are dismissed.