Whether the appraised price for compensation for expropriation can be considered as the market price under the Inheritance Tax and Gift Tax Act or

In the case of expropriation, no reasonable ground exists to regard the appraisal value as the market price, and on the sole ground that the appraisal value of the instant case was assessed on the condition that it would be the next expropriation, it cannot be deemed inappropriate to recognize the market price as the market price.

Article 60 of the former Inheritance Tax and Gift Tax Act (Amended by Act No. 13557, Dec. 15, 2015)

2016Guhap67043 Revocation of Disposition of Levying Inheritance Tax

CHAPTER A

*The Director of the Tax Office

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The Defendant’s disposition of imposition of KRW 405,962,620 against the Plaintiff on February 11, 2016 is revoked.

1. Details of the disposition;

A. A. On October 21, 2014, NewB (hereinafter referred to as “the decedent”) died on or before October 21, 2014, and the heir, such as NewCC, NewD, New EE, NewF, and NewGG (hereinafter referred to as “heirs, such as the Plaintiff, etc.”) who is his spouse, inherited the property of the decedent, such as the sum of the inheritance tax base return on April 30, 2015 by the heir, 1,784m2, Dongo-si, 268m2, Dongo-do, 46m2, Dongo-do, Dongo-do, 813m2, Dongo-do, Dongo-do, and Dongo-do, 1,415m2, Dongo-do, and 4,31m2 (hereinafter collectively referred to as “the inheritance property,” and the aggregate of the inheritance tax base return on April 30, 2015, the heir’s inherited property as the heir’s inherited property.

B. On the other hand, as the project approval of an urban development project of the Doo District was announced on September 11, 2014, the appraisal corporation, which received a request from the head of the Korea Appraisal Board for appraisal to calculate the compensation amount (hereinafter referred to as the "SY Appraisal Board"), the YY appraisal corporation (hereinafter referred to as the "YY appraisal corporation"), the ZZ appraisal corporation (hereinafter referred to as the "ZZ appraisal corporation") and the ZZ appraisal corporation (hereinafter referred to as the "ZZ appraisal corporation") were assessed and assessed on March 31, 2015 at the time of the price, and on March 18, 2015, the issue of inherited property as of March 18, 2015 as the enforcement date.

C. On November 19, 2015, the Director of the Korea Appraisal Board requested the change of the appraisal value based on the unit price assessment method on the ground of the change in the area of the inheritance housing at issue among the inherited property at issue. On November 23, 2015, the Z Appraisal Board sent reply to the change in the appraisal value of the inheritance housing at issue, and on November 24, 2015, the Z Appraisal Board notified the Plaintiff of the compensation amount (hereinafter “instant compensation amount”). On November 24, 2015, each of the appraisal values of the ZZ Appraisal Board, YY Appraisal Board, and ZZ Appraisal Board were calculated as KRW 4,14,607,823 (hereinafter “instant appraisal value”). Accordingly, on November 24, 2015, the Director notified the Plaintiff of the compensation amount on the issue of inherited property at issue (hereinafter “instant compensation amount”).

D. From October 22, 2015 to January 9, 2016, the director of the Central Regional Tax Office: (a) conducted an inheritance tax investigation of the decedent with respect to the issue of inherited property; (b) confirmed the existence of the instant appraised value within six months from October 21, 2014, which was the date of commencing the inheritance; and (c) notified the Defendant of the taxation data added to inherited property, the difference between the standard market price and the standard market price of the outstanding inherited property; and (d) on February 11, 2016, the Defendant determined and notified the Plaintiff of the determination of KRW 405,962,62,620 of the inheritance tax calculated by deducting the paid tax from the determined tax amount pursuant to the above taxation data (hereinafter “instant disposition”).

E. The Plaintiff dissatisfied with the instant disposition and filed a request for examination on March 21, 2016, but the Commissioner of the National Tax Service rendered a decision to dismiss the said request on June 10, 2016.

[Ground of recognition] Facts without dispute, Gap evidence 1, 2, Eul evidence 1 to 3, 5, 6, Eul evidence 4-1 to 3, the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

As to the subject matter of inheritance at issue, since there is no compensation or appraisal value recognized as the market price for the following reasons, it is difficult to calculate the market price, the standard market price shall be deemed as the market price according to the Plaintiff’s tax base return. However, the instant disposition that recognized the appraisal value

① Since the pertinent inherited property falls under expropriation, the appraised value cannot be deemed the market price, and only the amount of compensation should be deemed the market price. The instant compensation amount regarding the pertinent inherited property is determined around November 24, 2015, which was six months from the date the inheritance commences, and thus, it cannot be deemed as the market price, since it does not fall under the amount confirmed within the period of appraisal.

② Even if the appraisal value can be deemed as the market price, the instant appraisal value of the outstanding inherited property does not constitute the amount confirmed within the period of appraisal, as it was determined around November 24, 2015, and also does not constitute the amount confirmed within the period of appraisal. Moreover, it is not appropriate for the payment purpose by evaluating the appraisal value on the condition that it would be accepted in the future. Since there was a price fluctuation between the inheritance date and the appraisal date, it cannot be deemed as the market

(b) Related statutes;

It is as shown in the attached Table related statutes.

C. Determination

1) Determination as to the allegation No. A. 1

Article 60(2) of the former Inheritance Tax and Gift Tax Act lists the expropriation price, appraisal price, etc. at the market price recognized as the market price. Article 49(1) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act provides that the appraisal price, appraisal price, etc. shall be officially listed in cases where the above price is confirmed, and the compensation price, etc. shall be determined in cases where there are at least two values to be deemed the market price pursuant to Article 49(2) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act, while Article 60(2) of the same Act provides that "in cases where there are at least two values to be deemed the market price before and after the base date for appraisal, the priority order according to the type of values shall be determined." Thus, there is no reasonable ground to regard the expropriation as the market price prior to the price recognized as the market price based on only the compensation price or the appraisal price, etc.

2) Determination as to the allegation No. A-2

As seen earlier, the appraisal value of the instant case is calculated on March 31, 2015 with the date of the appraisal as the date of entry into force of March 18, 2015. The result of the instant reply reflected in the said calculation is not changed at the time of the price or the date of entry into force, but it is merely a re-calculated by applying the rate of the appraised value per unit area to the area corrected from 298.16 square meters to 232.22 square meters with respect to the pertinent inherited house. As such, the above time of reply cannot be a standard for determining whether it falls within the period of appraisal. Moreover, the market value under the language and text of Article 60(2) of the former Inheritance Tax and Gift Tax Act is not limited to those recognized as the market value under the conditions as prescribed by the Presidential Decree, such as the expropriation price, appraisal price, etc., and Article 49(1) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act with delegation from the foregoing provision is merely a case where the market value of inherited property can be seen as the market value.

3. Conclusion

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