[1] Whether a person who lawfully renounced inheritance is included in the "heir" defined as a person who succeeds to a tax liability of the inheritee, such as national taxes (negative)

[2] Whether insurance money under Article 8 of the Inheritance Tax and Gift Tax Act is included in “property acquired by inheritance” under Article 24(1) of the Framework Act on National Taxes (negative)

[1] Article 1042 of the Civil Act and Article 3(1) of the Inheritance Tax and Gift Tax Act (hereinafter “Inheritance Tax Act”) provide that a person who has renounced inheritance shall be placed in the same position as the inheritor was not the inheritor from the time of the commencement of inheritance based on the retroactive effect of the renunciation of inheritance (see, e.g., Article 1042 of the Civil Act). However, in order to prevent the donor from being exempted from the liability to pay inheritance taxes by giving up inheritance, this is to prevent the donor from being exempted from the liability to pay inheritance taxes. There is no reason that the scope of the heir under Article 24(1) of the Framework Act on National Taxes and the taxpayer to pay inheritance taxes under Article 3(1) of the Inheritance Tax and Gift Tax Act should be clearly defined by the law, and the interpretation of the tax law should be interpreted by the law, and it is not permitted to expand or analogically without reasonable grounds.

[2] Article 8(1) of the Inheritance Tax and Gift Tax Act (hereinafter “Inheritance Tax Act”) provides that insurance money of life insurance or non-life insurance received due to the death of the inheritee by the inheritee, which is actually the same as the acquisition of property by inheritance or testamentary gift, shall be subject to inheritance tax by deeming that the insurance money received by the inheritee pursuant to the insurance contract that became the policyholder is substantially the same as the acquisition of property by inheritance or testamentary gift. However, in the case of insurance money under Article 8 of the Inheritance Tax and Gift Tax Act, the right to claim the payment of insurance money held by the beneficiary is not the original inherited property but the heir’s proprietary property. Therefore, the insurance money under Article

[1] Article 24(1) of the Framework Act on National Taxes, Article 3(1) of the Inheritance Tax and Gift Tax Act, Article 1042 of the Civil Act / [2] Article 24(1) of the Framework Act on National Taxes, Article 8(1) of the Inheritance Tax and

[Judgment of the court below]

the director of the tax office of Western

Seoul High Court Decision 2012Nu13377 decided December 6, 2012

The appeal is dismissed. The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

Article 24(1) of the Framework Act on National Taxes provides, “The heir (including testamentary donee at the time of commencement of inheritance) or administrator of inherited property under Article 1053 of the Civil Act shall be liable to pay national taxes, additional dues and expenses for disposition on default imposed on or to be paid by the predecessor to the extent of the inherited property.”

Article 1042 of the Civil Act) and Article 3(1) of the Inheritance Tax and Gift Tax Act (hereinafter “Inheritance Tax Act”) provide that a person who has renounced inheritance shall be placed in the same position as the inheritor was not the inheritor from the time of the commencement of inheritance by the retroactive effect of the renunciation of inheritance (Article 1042 of the Civil Act). However, in order to prevent a donor who has received prior inheritance from being exempted from liability for inheritance tax by the waiver of inheritance, this is to prevent a donor from being exempted from liability for inheritance tax. There is no reason to match the scope of a successor under Article 24(1) of the Framework Act on National Taxes and a taxpayer of inheritance under Article 3(1) of the Inheritance Tax and Gift Tax Act. Under the principle of no taxation without law, the elements for taxation should be clearly prescribed in the law, and the interpretation of tax laws should be expanded or analogical interpretation without reasonable grounds, and thus, a person who has lawfully renounced inheritance should not be included in insurance money under Article 24(1) of the Framework Act on National Taxes as an inheritor’s right to receive inheritance insurance money under the Inheritance Tax Act or insurance contract.

According to the reasoning of the judgment below, the court below determined as follows: (a) the deceased non-party (hereinafter “the deceased”) was unable to pay capital gains tax and died on June 12, 2010; (b) the Plaintiff, as a beneficiary on June 22, 2010, received KRW 300 million insurance money due to the death of the deceased; and (c) on August 31, 2010, reported inheritance tax on KRW 219 million equivalent to the insurance premium borne by the deceased as a policyholder (hereinafter “the insurance money of this case”); and (d) on the other hand, on July 7, 2010, the Plaintiff reported the renunciation of inheritance on July 15, 201, and received the adjudication on the acceptance of the report on the inheritance; and (d) the Defendant did not otherwise recognize that the transfer income tax of this case did not belong to the inheritor, including the Plaintiff, within the scope of 200 million inheritance; and (e) the Plaintiff did not otherwise recognize that the transfer income tax of this case was transferred to the deceased’s property.

In light of the above legal principles and records, such determination by the court below is just, and there is no error in the misapprehension of legal principles as to the succession of tax liability due to inheritance under Article 24(1) of the Framework Act on National Taxes, contrary to the allegations

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Sang-hoon (Presiding Justice)