Cho-2017-China-4253 (2018.08)

The Plaintiff cannot become a taxpayer of capital gains tax because the Plaintiff is not in a position to substantially control, manage, or dispose of capital gains of the instant shares.

Inasmuch as a title trustee voluntarily set up a mortgage on the instant shares, and the instant shares were returned to the Plaintiff in its entirety due to the enforcement of the right to collateral security, the Plaintiff was not in a position to de facto control, manage, and dispose of the amount equivalent to the secured claim out of the transfer income of the instant shares.

Article 14 of the Framework Act on National Taxes

2018Gudan6465 Revocation of Disposition of Imposing Transfer Income Tax

○ Of species ○

Head of △ District Office

April 24, 2019

May 22, 2019

1. The Defendant’s disposition imposing capital gains tax of KRW 41,557,790 on the Plaintiff on December 1, 2016 shall be revoked.

2. The costs of the lawsuit are assessed against the defendant.

Cheong-gu Office

The same shall apply to the order.

1. Details of the disposition;

A. On October 15, 1970, the Plaintiff acquired a title trust agreement with KimB, KimB, KimAA, KimCC, KimDD, KimE, KimF, and KimG, and completed the registration of ownership transfer under their names (1/7 of each share), while acquiring * Dong ** Dong ****-dong 19,190 square meters (hereinafter “instant land”).

B. On August 3, 2006, KimA of the above title trustee completed the registration of ownership transfer on the ground of donation with respect to 1/7 of his share in the instant land to Kim △△△ (hereinafter “instant share”). The plaintiff, who became aware of the above donation, was awarded a favorable judgment against the Suwon District Court 200************* by filing a lawsuit claiming ownership transfer, which was due to the termination of title trust on January 5, 2009, and the above judgment became final and conclusive at that time.

C. On the other hand, on July 20, 2009, Kim △△△ rendered the instant share to Kim Mandong Co., Ltd. by setting up a collateral (hereinafter “mortgage”) with respect to the instant share of KRW 340 million with the maximum debt amount.

D. After that, the Plaintiff completed the registration of ownership transfer on the instant land, including the instant share, by the foregoing judgment on May 4, 2010. However, Kim Man-kil applied for voluntary auction as the Suwon District Court 201***** on the instant share on the ground of the nonperformance of Kim △△△△△, the mortgagee of the instant case, and the instant share was awarded at KRW 250 million on January 27, 2016. The instant share was awarded at KRW 245,757,388, excluding the execution cost on January 15, 2016, the total amount of KRW 245,757,38, to which the secured claim of the instant share was transferred from Kim Man-kn-kon and the Plaintiff did not receive any payment for the transfer of the instant share at all.

E. Accordingly, on December 1, 2016, the Plaintiff did not report the transfer income tax on the transfer of the instant shares. On December 1, 2016, the Defendant calculated the transfer value of the instant shares of KRW 250 million, the acquisition value of KRW 51,128,282, the necessary expenses as KRW 1,289,117, and calculated the special long-term holding deduction amounting to KRW 59,274,780, and determined and notified the transfer income tax of KRW 41,57,790 (including additional tax) for the transfer income tax of KRW 59,274,780 (hereinafter “instant disposition”).

F. On March 15, 2017, the Plaintiff filed an objection with the commissioner of the △△ Regional Tax Office, but received a decision of dismissal on June 23, 2017, and filed an appeal with the Tax Tribunal on September 8, 2017, but received a ruling of dismissal on December 7, 2017.

[Ground of recognition] Facts without dispute, Gap 1, 2, 3, 5, 7, 8, Eul evidence Nos. 1 and 2, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. Summary of the plaintiff's assertion

In contrast to the purport of the trust in the name of Kim △△△, it set up the instant right to collateral security with respect to the instant shares, and embezzled them by receiving KRW 340 million from Kim Ban, and there was no money reverted to the Plaintiff out of the successful bid price of the instant shares. As such, the actual income accrued from the successful bid of the instant shares was attributed to Kim △△△△. The Plaintiff’s damage claim equivalent to the Plaintiff’s embezzlement of Kim △△△△△△ was objectively apparent that there was no possibility of realizing future income due to the impossibility of recovery in light of the Plaintiff’s financial status and payment ability of Kim △△△△△△△, and thus, the instant disposition imposing capital gains tax on the Plaintiff by taking the transfer income from the successful bid

B. Determination

1) Relevant legal principles

A) If a title truster transfers a title trust property at his/her own will, he/she shall be deemed to be in a position to de facto control, manage, and dispose of capital gains, and thus, he/she is liable to pay capital gains tax. However, if a title truster arbitrarily transfers a title trust property without the delegation or consent of the title truster, the transferor is not the title truster but the title truster is not in a position to de facto control, manage, and dispose of capital gains unless the capital gains are returned to the title truster. Therefore, the title truster cannot be deemed to be a person liable to pay capital gains tax.

In order for a title trustee to have returned capital gains accruing from the trust property in the name of the title trustee who arbitrarily disposed of without the delegation or consent of the title truster to the title truster, it should be deemed that the title trustee is in a position to substantially control, manage, and dispose of capital gains as he/she performs the delegated affairs, such as voluntarily transferring the full amount to the title truster immediately upon receipt of the transfer consideration. Barring any special circumstance, the title truster cannot be deemed to have returned capital gains on the ground that the title truster recovered the amount equivalent to the transfer consideration after a considerable period of time has elapsed through a lawsuit against the title trustee (Supreme Court Decision 2012Du10710 Decided September 4, 2014).

B) If the title trustee created the right to collateral security on the property held in title without the delegation or consent of the title truster, and the above title trust property was returned to the title truster in its entirety, and if the above title trust property was transferred due to the execution of the right to collateral security established by the title trustee, the above legal doctrine applies to the part that affects the effect of the right to collateral security among the property held in

2) According to the facts seen earlier, Kim △△, a title trustee, voluntarily set up the instant mortgage on the instant shares, and in its entirety, the instant shares were returned to the Plaintiff, resulting in the enforcement of the instant mortgage. Therefore, it is reasonable to deem that the Plaintiff was not in a position to de facto control, manage, and dispose of the amount equivalent to the instant secured claim out of the transfer income of the instant shares, and the amount equivalent to the instant secured claim out of the transfer income of the instant shares exceeds the transfer income of the instant shares.

In addition, in light of the overall purport of the argument in Gap evidence No. 5, it is recognized that Kim △△△ established the right to collateral security of this case to the plaintiff, and it did not voluntarily transfer the loan money received from Kim Madon to the plaintiff, and thereafter, it did not pay the plaintiff a reasonable amount of embezzlement to the plaintiff on May 19, 2010, which was sentenced to imprisonment with prison labor for 10 months and 2 years of suspended execution in the case of embezzlement** In this case, it cannot be deemed that the amount equivalent to the secured claim of the right to collateral of this case was returned to the plaintiff.

3) Sub-decisions

Therefore, the Plaintiff cannot be deemed to have been in a position to substantially control, manage, and dispose of the transfer income at the time of transfer of the instant shares due to a successful bid. Therefore, the Plaintiff cannot be a taxpayer of the transfer income tax, and the Plaintiff’s assertion is based on the grounds

3. Conclusion

Therefore, the plaintiff's claim is based, and it is so accepted and decided as per Disposition.