Whether a disposition imposing capital gains tax is legitimate by calculating the conversion acquisition value;

The Plaintiff’s assertion that the acquisition value of the instant real estate is the real payment value must be proved by the claimant, but the evidence proving the Plaintiff is difficult to accept such assertion. Therefore, the Defendant’s disposition imposing capital gains tax by applying the conversion acquisition value is legitimate, deeming that the acquisition value of the instant real estate is unclear.

2017Gudan74262 Revocation of Disposition of Imposing capital gains tax

AA

BB Director of the Tax Office

September 05, 2018

October 10, 2018

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The imposition of capital gains tax of KRW 00,000,000 (including additional tax) for the year 2014, which the Defendant rendered to the Plaintiff on October 00, 2017 is revoked.

1. Details of the disposition;

A. On January 24, 1985, the Plaintiff reported marriage with BB on January 24, 1985, but reported divorce on January 21, 1990.

B. On December 30, 2005, the Plaintiff, the mother of BB, acquired 49,587/10 of the 456,868 square meters of the 6-1 forest land of TTS-gun, Gyeonggi-do (hereinafter “DDD”). The said co-ownership became 48,851 square meters of DDsan 6-39 forest and 4851 square meters of land through the subdivision of the land and the division of the jointly-owned property (hereinafter “instant land for convenience”), and on December 12, 2014, the Plaintiff transferred the instant land to BB for KRW 600,000,000.

C. On October 0, 2015, the Plaintiff paid capital gains tax by scheduled return to the Defendant with the acquisition value of KRW 000,000,000, and the transfer value of KRW 000,000.

D. On January 2, 2017, the Defendant deemed that KRW 000,000,000 reported by the Plaintiff cannot be recognized as the actual transaction price at the time of acquisition of the instant land, and calculated capital gains by using the acquisition value as KRW 000,000,000, which is the conversion price, and subsequently, issued a notice of increase in capital gains tax of KRW 00,000 for the year 2014 to the Plaintiff (hereinafter “instant disposition”).

E. On April 4, 2017, the Plaintiff appealed to the Tax Tribunal, but the Tax Tribunal dismissed the Plaintiff’s request on October 0, 2017.

Each entry of evidence Nos. 1, 2, 3, 4, 10, 19, 20, 25, 30, 31, 32, 33, 35, and Eul evidence Nos. 1, 2, and 3 (including branch numbers; hereinafter the same shall apply), each entry of evidence Nos. 11, 22, 23, and 24, part of the evidence Nos. 1, 3, 4, 10, 19, 20, 25, 30, 31, 32,

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The Plaintiff acquired the instant land in accord and satisfaction amount of KRW 000,000,000 among the loan claims against CCC. It is unlawful that the Defendant did not recognize the above payment amount as the actual transaction price at the time of acquisition, and determined the acquisition price at the conversion price. Meanwhile, the details of the payment and satisfaction are as follows.

1) Around December 1995, CCC, which was the Plaintiff, requested the Plaintiff to lend money to purchase approximately KRW 4.1 billion, 536,130 of DD 6-1 forest land 539,833 square meters, and DD 614-1 prior to DD 614-1, and the remaining five parcels, other than DD 614-1 forest land 939 square meters (hereinafter referred to as “DD 614-1 et al.”).

2) The Plaintiff accepted the above request and lent the above money to CCC from October 0, 1995 to October 0, 1996 by means of depositing the sum of KRW 00,000,000 in the CCC’s WB bank account eight times.

3) From October 0, 1996 to October 0, 1996, the Plaintiff additionally lent the above money to CCC by depositing the amount of KRW 000,000,000 in the SS trust account of CCC four times.

4) As the Plaintiff did not receive a refund of the loan principal and interest even after a lapse of three years from the final lending date, the Plaintiff demanded CCC to pay even some of the loan principal and interest through her former husband BB.

5) On October 0, 199, the Plaintiff acquired DD 614-1 and four parcels from CCC as the principal payment for the principal amount of KRW 000,000,000, out of the principal amount of the loan and interest.

6) Thereafter, from October 0, 2003 to October 0, 2005, the Plaintiff additionally lent the said money to CCC by way of depositing the light bank account of CCC in total of KRW 000,000,000 on 13 occasions.

7) On October 0, 2005, the Plaintiff completed a provisional registration on DDsan 615-4 and four parcels owned by CCC for the purpose of securing the principal and interest of the loan.

8) On October 0, 2005, the Plaintiff received from CCC the transfer of land from DD 614-1, 615-5, 615-6, 616-1, and 616-2 as payment in lieu of payment for the total amount of KRW 0,00,000 among the principal balance of KRW 00,00,000.

9) On December 30, 2005, the Plaintiff: (a) from CCC on December 30, 2005, 49,587/456,868/8 of the leased principal amount of KRW 000,000,000,000,000 for the payment in kind; and (b) received payment in lieu of the leased principal amount of KRW 456,868/87 of the leased principal amount.

10) After that, the Plaintiff paid CCC KRW 00,000,000 to 10 times from October 0, 2006 to March 20, 2008 on the ground that the remaining principal exceeds KRW 73,300,000,000 of the remaining principal of the debt.

11) On December 30, 2005, the Plaintiff and CCC determined the above payment amount as KRW 000,000,000,000.

C. Determination

In a case where the transfer of assets is made by payment in kind, the original amount of debt constitutes the actual acquisition value of the relevant assets (see, e.g., Supreme Court Decision 97Nu19809, Mar. 10, 1998). However, the burden of proving the existence of the actual transaction value and the amount of the debt and the actual payment in kind accordingly ought to be borne by the party who asserts the payment in kind.

1) Facts as shown in the Plaintiff’s assertion

As to whether payment in kind was made by the Plaintiff as alleged by the Plaintiff, the following facts may be acknowledged according to each of the statements in evidence Nos. 10, 12, 13, 15, 16, 17, 18, 27, and 35.

A) From October 23, 1995 to January 6, 1996, KRW 000,000 was deposited eight times in the W Bank Account in the name of CCC.

B) From January 11, 1996 to July 29, 1996, KRW 000,000 was deposited four times in the SS Trust Account in the name of CCC.

C) From February 11, 2003 to October 10, 2005, the sum of KRW 000,000,000 was deposited in the PP Bank account in the name of CCC, as shown in the table of Section 2)(b)(3)(3).

D) The registration of ownership transfer was completed on July 19, 1999 with respect to DD 614-1 and four parcels owned by CCC (hereinafter “DD 614-1 and four parcels transfer registration”).

E) On December 5, 2005, the provisional registration of DDR 615-4 and four parcels owned by CCC was completed on December 5, 2005 (hereinafter “DDDsan 615-4 and 4 parcels”).

F) On December 27, 2005, the Plaintiff and CCC drafted a sales contract with the purchase price of KRW 600,000,000 for DD 615-4 and four parcels owned by CCC.

2) Dissenting Opinion

However, comprehensively taking account of the following opposing circumstances, Gap's evidence Nos. 12 through 15, 18, 26, 32, Eul's evidence Nos. 4, 13, 31, and 32, and the purport of Gap's evidence No. 11 as a whole, can be acknowledged.

A) In light of the relationship between the Plaintiff and CCC, it is difficult to accept the Plaintiff’s overall assertion that the Plaintiff did not acquire any security immediately at the time of lending money without any interest loan, and that the Plaintiff provided any monetary loan.

According to the plaintiff's assertion, the plaintiff lent 00 million won to CCC without preparing a loan certificate from October 23, 1995 to October 10, 2005. In other words, the plaintiff specifically lent cCC a sum of 00 million won from November 23, 1995 to January 9, 1996, with a total of 00,000,000 won from January 11, 1996 to July 29, 1996, with a total of 00,000,000,000 won for payment in kind after three years, and the amount of outstanding principal was collected from 1.0,000,000 won to 1.0,000,000 won.

However, as seen above, the Plaintiff was married with BB on January 24, 1985, but was divorced on January 21, 1990, and CCC was the mother of BB. In addition, at the time of divorce, the Plaintiff agreed to assume the responsibility for raising two children born between BB and BB. At the time of divorce, CCC had three children (including BB) and three married children. The relationship between the Plaintiff and CCC as seen above, the Plaintiff is assumed to bear the burden of child support, while CCC appears to be able to borrow money from six children, including BB, even without requesting the Plaintiff to borrow money, in light of the fact that the Plaintiff continued to lend large amount of money to CCC without any collateral and free loan.

B) It is difficult to view that the Plaintiff’s assertion as to individual monetary lending is reasonably acceptable.

(1) As to the assertion that the Plaintiff lent KRW 00,00,000 from October 23, 1995 to January 6, 1996, there is no objective evidence to directly prove that the deposit agent is the Plaintiff (the Plaintiff cannot be deemed to be the details of cash deposit made to the CCC on the ground that the Plaintiff did not have the name of the depositee or use the bank handling point at his domicile). However, as seen above, it is argued that the Plaintiff cannot be deemed to be the actual transaction price in the case where the Plaintiff acquired the asset as payment in kind and the amount of the debt is disputed whether it constitutes the actual acquisition price and the burden of proof on the amount of the debt payment is asserted to the party claiming the payment in kind).

"또한 원고는 위 금전 대여 경위에 관하여, CCC이 DDD 614-1 외 4필지를 매수하는 데 0,000,000,000원이 필요하다며 매수 자금의 대여를 요청하여 '평소 보유하던 현금'으로 000,000,000원을 대여하게 되었다고 설명하였는데, 위 기간 중 원고의 주민등록상 주소지는 '부산 QQ구 HH동 573-1'였는바, 위와 같은 금전 대여 경위에 관한 설명과 원고의 주소지 등을 고려하면, 원고는 위 주소지 부근의 금융기관에서 평소 보유하던 금원을 일시에 계좌 이체 방식으로 CCC에게 대여하고, CCC도 원고로부터 지급받은 금원을 일시에 출금하여 매수자금으로 사용하는 것이 자연스럽다고 할 것이다. 그런데 WWW은행 계좌 입ㆍ출금은 여러 차례로 나누어 순차적으로 이루어졌고, 그 입금 장소도 서울 동작구 SS동 지점, 서울 강서구 UU동 지점, 서울 강남구 XX지점, 서울 강남구 ZZ지점, 서울 영등포구 VVV지점으로 모두 서울인 것으로 나타날 뿐이다.",그리고 DDD 614-1 외 4필지의 1996. 1. 1. 기준 개별공시지가 합계액은 약 000,000,000원에 불과한바, CCC이 이를 0,000,000,000원에 매수하려고 하였다는 것 역시 쉽게 이해되지 아니한다.

(2) As seen earlier, regarding the assertion that the Plaintiff lent KRW 00,000,000 from January 11, 1996 to July 29, 1996, according to the SS trust account transaction statement in the name of CCC, the amount deposited during the above period is not in accord with KRW 00,000,000,000, which the Plaintiff asserts. Moreover, there was no objective material proving that the Plaintiff is the Plaintiff.

(3) With respect to the assertion that the Plaintiff lent KRW 00,000,000 from February 11, 2003 to October 10, 2005, the Plaintiff did not provide any specific explanation as to the motive or circumstance of the lending in relation to the assertion of the lending of money. In addition, the Plaintiff deposited KRW 1,00,000 (hereinafter referred to as “one gold”) with the light bank account in the name of CCC as listed below, but there was no objective document proving that the principal of the payment was the Plaintiff in relation to KRW 2,3,4,7,00,00. As to KRW 1,5,60,00 which is confirmed to have been deposited by the Plaintiff, there was no objective document proving that the principal of the payment was the Plaintiff, and the other party agreed to transfer the ownership of other substituted goods to the other party and returned it to the other party in such kind, quality, and quantity as well as the deposit of money in accordance with Article 598 of the Civil Act.

C) The Plaintiff’s assertion that the registration of ownership transfer of DD 614-1 and four parcels of land was made due to payment in substitutes, or that the provisional registration of DD 615-4 and four parcels of land constitutes the provisional registration of collateral security. It is difficult to reasonably accept the Plaintiff’s assertion.

(1) Regarding the transfer registration of ownership

On July 15, 1995, with respect to DD 614-1 and four parcels, the Plaintiff and CCC drafted a sales contract with the seller as CCC and the buyer as the Plaintiff, and with the sales price of KRW 000,000,000,000 (payment date: the date of concluding a contract) and the remainder of KRW 00,000,000 (payment date: July 19, 1999). However, if the Plaintiff acquired DD 614-1 and four parcels from CCC as a substitute payment for payment in kind, it is difficult to obtain the sales contract with the content that the sales price is paid in installments on two occasions.

(2) Regarding provisional registration

Whether a provisional registration is a provisional registration for security shall not be determined formally by the type of documents sent and received when indicating or registering the registration record, but shall be determined by the substance of the transaction and the interpretation of the intent of the parties concerned (see, e.g., Supreme Court Decisions 91Da36932, Feb. 11, 1992; 96Da6974, Jul. 30, 1996). In light of the aforementioned various circumstances, it is difficult to readily conclude that a provisional registration for a provisional registration, which was completed on the ground of a pre-sale for sale, was a provisional registration for the Plaintiff’s future, on December 5, 2005.

D) It seems that CCC made the appearance such as transfer of ownership to BB by means of “trade” through the Plaintiff in order to reduce the burden of BB’s gift tax while making the instant land donated to BB.

In addition to the instant land, the 17 attached Table 2, which is owned by CCC, was transferred from CCC to BB via the Plaintiff. It seems that CCC formally sells land to the Plaintiff in order to ensure that BB does not pay gift tax while it donated land owned by itself to BB, and that the Plaintiff made the appearance such as selling the land again to BB.

3) Sub-decisions

In light of the above opposing circumstances, it is difficult to view that the facts acknowledged in the above 1 alone are proven in accord with the Plaintiff’s assertion, and there is no other evidence to acknowledge otherwise. Therefore, it cannot be deemed that the Defendant erred by calculating the acquisition value at the conversion price by deeming that the actual acquisition value of the instant land acquisition cannot be confirmed by documentary evidence, such as a sales contract. The instant disposition is lawful.

3. Conclusion

The plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.