The appeal is dismissed.

The costs of appeal are assessed against the Plaintiff.

The grounds of appeal are examined.

1. Article 41-3(1) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 9916, Jan. 1, 2010; hereinafter “former Inheritance Tax Act”) provides that where a person having a special relationship with the largest shareholder, etc. receives a donation of stocks of the relevant corporation from the largest shareholder, etc. or acquires them for a fee, the value of the relevant stocks, etc. increased as the stocks, etc. are listed on the securities market or the KOSDAQ within five years from the date of donation or acquisition, and where a person who received a donation of, or acquired a fee for, the relevant stocks, etc. gains a certain amount of profit in excess of the original taxable amount of gift taxes or the acquisition value of, the value of the relevant stocks, etc. shall be deemed to be the value of the property donated to the person who acquired the profits, and Paragraph (6)

The legislative intent of Article 41-3(1) of the former Inheritance and Gift Tax Act is to promote tax equality by imposing gift tax on listed profits of unlisted stocks and imposing tax on the transferred stocks expected to be realized at the time of donation or transfer. As such, “new stocks” under Article 41-3(6) of the former Inheritance and Gift Tax Act shall be deemed to include not only free new stocks based on the originally donated or acquired stocks, but also paid new stocks, and the portion of “new stocks acquired and allocated by a floating taxpayer” under Article 41-3(6) of the former Inheritance and Gift Tax Act does not violate the Constitution.

Article 47-2 of the former Framework Act on National Taxes (amended by Act No. 9911, Jan. 1, 2010; hereinafter the same shall apply) (see, e.g., Constitutional Court Order 2012Hun-Ga5, Sept. 24, 2015).