Plaintiff 1 and one other (Law Firm Ilung, Attorneys Kim Jong-soo et al., Counsel for the plaintiff-appellant)

The director of the tax office.

July 7, 2015

Seoul Administrative Court Decision 2014Guhap14709 decided February 26, 2015

1. Revocation of the first instance judgment.

2. Each of the plaintiffs' claims is dismissed.

3. The costs of the lawsuit are assessed against the Plaintiffs.

1. Purport of claim

On August 20, 2013, the Defendant rendered a decision that the imposition of gift tax of KRW 38,590,810 against each of the Plaintiffs is revoked.

2. Purport of appeal

The judgment of the first instance is revoked and the plaintiffs' claims are dismissed.

1. Quotation of the first instance judgment

The reasoning of this court's explanation concerning this case is as follows, except for the case's explanation below 2. D. of the reasoning of the judgment of the court of first instance and below 2. D. of the judgment of the court of first instance. Thus, this court's explanation is based on Article 8 (2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act.

2. Parts to be dried;

D. Determination

The Defendant’s mother, who is an insured under each of the instant insurance contracts, changed its policyholder, pension beneficiary, and maturity beneficiary to the Plaintiffs, and the Plaintiffs’ donated property received from the Nonparty’s mother from the Nonparty is a legal or de facto right or economic benefit that comes to belong to the Plaintiffs due to the change in the terms of such insurance contracts. First, the status as a policyholder is granted the right under an insurance contract, such as the termination right, and this refers to the status that can receive a refund for termination along with the right to dispose of whether the insurance contract remains in existence. However, from the perspective of an insurance contract in existence where the contract is voluntarily terminated, the primary factor of donated property is an exceptional phenomenon. Therefore, the Plaintiffs’ main factor of donated property is the right to life pension, death insurance money, and maturity insurance money that are to be received

Meanwhile, Articles 60(1) and 60(2) of the Inheritance and Gift Tax Act provides that “The value of property on which gift tax is levied under this Act shall be based on the market price as of the date of donation (Paragraph (1). The market price refers to the value generally recognized to be constituted when transactions are made freely between many and unspecified persons (Paragraph (2)). However, in light of the following: (a) the Plaintiffs’ rights acquired through the donation of this case are incompatible with the rights to receive termination refunds and the rights to receive insurance money; (b) the rights to receive death insurance money among the rights to receive insurance money; and (c) the right to receive death insurance money; and (d) the time of occurrence of insurance accidents within the insurance period; and (e) the time of occurrence of insurance accidents within the insurance period; (b) the status of each insurance contract of this case is deemed a kind of conditional right; (c) thus, it is difficult to calculate the value recognized to be normally established. Therefore, the status of each insurance contract of this case is based on the value of each right at the present market price based on other terms and conditions.

In the case of this case, the first issue is whether the original value of the right as a beneficiary under each of the insurance contracts of this case is much much or more. In light of the fact that the non-party, upon entering into each of the insurance contracts of this case, donated the status of the insurance contract to the plaintiffs immediately before the right to receive a survivors' pension was created, and the insurance premium paid is in a quid pro quo relationship with the beneficiary's status, barring any special circumstance, it is reasonable to view that the original value of the right of the beneficiary under each of the insurance contracts of this case is equivalent to the amount of the insurance premium paid at the time of entering into the insurance contract of this case. The non-party, even though one month has not passed since the non-party entered into the insurance contract of this case and paid the insurance premium at the time, provided that the non-party, without any change in the status or condition of the non-party, who is the insured, donated each of the above insurance premium paid in lump sum to the plaintiffs, it is reasonable to view that the amount of each of the insurance contracts of this case at the time of this case is terminated.

Therefore, each of the dispositions of this case based on the premise that the amount equivalent to the insurance premium paid by the Nonparty is the market price under each of the insurance contracts of this case is legitimate, and thus, the prior plaintiffs' assertion cannot be accepted on different premise.

3. Conclusion

Therefore, the plaintiffs' claims are dismissed. Since the judgment of the court of first instance is unfair with different conclusions, the defendant's appeal is accepted, and the judgment of the court of first instance is revoked and the plaintiffs' claims are dismissed. It is so decided as per Disposition.

Judges Jan Jin-hun (Presiding Judge)