Cho Jae-2016-China-2511 ( November 08, 2016)

Whether this case's real estate donation constitutes the real estate donation

On March 9, 2006, it is reasonable to view that the date when the Plaintiff received the right to acquire real estate in the instant land was changed in the name of the land supplier.

Article 31 (Scope of Donated Property)

Incheon District Court 2016Guhap54910 Revocation of Disposition of Imposing Gift Tax

○ ○

○○ Head of tax office

2017.21

November 23, 2017

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 imposing gift tax of KRW 125,219,840 (including additional tax; hereinafter the same shall apply) against the Plaintiff on April 6, 2016 shall be revoked.

1. Details of the disposition;

A. On April 9, 1995, the ○○ Metropolitan City Mayor decided to sell part of the reclaimed land within ○○ New City to the members of the fishing village fraternity in the area of a tideland which was subject to reclamation as a part of the occupational countermeasures due to the project for the creation of a new town site. The ○○ Metropolitan City Mayor completed reclamation of public waters and completed registration of preservation of ownership on July 11, 2005, and entered into a land supply contract with the Plaintiff’s father (the father) who was the fishing village fraternity on July 11, 2005 with respect to the 1/53 shares of ○○○○○○○-dong 22, 22-2, 8,795 square meters (hereinafter “instant land”). The ○○○○○ paid KRW 7,000,000 as a down payment.

B. On March 15, 2002, the Plaintiff drafted a contract under which the land of this case is donated from the largest ○○○○ (hereinafter “instant contract”). The main contents are as follows.

1. Indication of real estate: Land in this case;

2. Details of the contract;

Article 1 The donor shall grant free of charge the real estate indicated above to the donee, and the donee shall be entitled to do so. The delivery date of the donated real estate shall be the date of 00 o.e., change of name.

Where there are grounds to restrict the exercise of ownership, such as superficies, mortgages, leases, etc. established on the above real estate as of the date of delivery or there is any unpaid amount of tax, public charges, other charges, etc., the donor shall transfer full ownership to the donee by completely removing the defects, burdens, etc. of the rights by the date of delivery of the real estate: Provided, That this shall not apply

Article 3 The attribution of profits generated in relation to the above mentioned real estate and the burden of taxes, public charges, etc. shall be determined on the basis of the date of delivery of the above mentioned real estate, and the liability for local tax payment and liability for tax payment shall

Matters of special agreement

1. The price for the land to be supplied from the 00 free economic zone authority shall be paid by donee;

2. The price of land shall be l million won and l million won in total at the time of change of the title when the land is supplied.

C. On March 9, 2006, when the Plaintiff applied for a change in the name of a contractor to the above land supply, the ground for application was indicated as a sales contract, but the instant contract was accompanied by a supporting document. After changing the name of a contractor to the Plaintiff, the Plaintiff paid the remaining land price of KRW 62,88,230 (except for the down payment of KRW 7,00,000,000, total price paid by ○○○○ at KRW 69,88,230) and received the registration of ownership transfer from the ○○ Metropolitan City Mayor.

D. On April 6, 2016, the Defendant assessed the value of the instant land at the time of March 9, 2006 as KRW 418,072,50 and imposed an assessment and assessment of KRW 125,219,840 (hereinafter “instant disposition”) on the ground that the Plaintiff did not file a settlement report by the deadline for filing a return on the instant land donated on March 9, 2006.

E. On June 27, 2016, the Defendant appealed to the Tax Tribunal, but was subject to a dismissal ruling on November 8, 2016.

[Grounds for recognition] Facts without dispute, Gap 1-2, 4, Eul 1-3, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. Summary of the Plaintiff’s assertion

(1) On March 15, 2002, the Plaintiff donated the right to enter into a land supply contract amounting to KRW 30,000,000 to KRW 40,000 at the market price from the largest ○○○ on March 15, 2002, and the instant land was not donated on March 9, 2006. Thus, the instant disposition was erroneous for misapprehending the timing of donation and the property subject to donation.

(2) On August 16, 1996, the Plaintiff remitted 20,000,000 won to the largest ○○○, and 48,659,800 won on February 17, 1997, and this constitutes a donee’s liability under the gift agreement with respect to the land of this case, and thus, the above amount should also be deducted from the value of the property subject to donation.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

(1) Object of donation

㈎ 관련 법리

The term "right to acquire real estate" means a right to acquire real estate, the main purpose of which is to acquire real estate directly or at least, even if not, means the right to acquire real estate, if the main purpose of which is to acquire such right satisfies additional requirements in the acquisition of real estate itself in the future or goes through a certain procedure (see, e.g., Supreme Court Decision 98Du205, Sept. 29, 200). The termination date of the right to acquire real estate is the time of acquisition of ownership. Here, the acquisition of ownership includes not only cases of acquisition of ownership by registration but also cases of actual acquisition of ownership, such as cases where the compensatory benefit is to be deemed to have been fully implemented by social norms.

㈏ 검토

1) In light of the following circumstances acknowledged by the facts described in paragraph (1) and the purport of oral argument, namely, the subject of donation is indicated as the land in this case. However, Article 1 of the contents of the contract is the date of designation of change of the name of ○○○ City, which is not the transfer price of the land, the date of transfer of the land, namely, the date of change of the name of the land supplier. According to Paragraph (1) of the special agreement, the land price to be supplied is required to be paid by the Plaintiff. In fact, ○○○ succeeded to the status of the land supplier, and the Plaintiff paid the land price and received the registration of ownership transfer directly from the ○○ Metropolitan City Mayor. Since the Plaintiff paid the land price and received the registration of ownership transfer from the ○○○○ City Mayor, it is reasonable to view that the Plaintiff’s donation from the ○○○○ City was the right to acquire the land in this case’s case’s case’s case’s case’s case’s case’s case’s case where the Plaintiff did not acquire the right to acquire the real property in this case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s acquisition.

2) The Plaintiff appears to have received the registration of ownership transfer after changing the name of the land supplier on March 9, 2006 and paying the land price on the same day. However, at least at the time when the Plaintiff donated the right to acquire the instant land by changing the name of the land supplier, it is difficult to deem that the Plaintiff had reached the stage of actual acquisition of the ownership of the instant land at the time of donation, and there is no other evidence to acknowledge otherwise, the donation made by the Plaintiff should be deemed to be not itself the instant land but the right to acquire the instant land.

(2) The time of acquisition

㈎ 관련 법리

1) Article 23(1) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 20720 of Feb. 29, 2008; hereinafter "Enforcement Decree of the Inheritance Tax and Gift Tax Act") provides that any property which requires a registration or enrollment in the transfer or exercise of any right shall be registered (Article 1). Where a construction permit is issued or a report is filed in the name of a donee for the purpose of constructing a new building and then constructing a new building, the date of issuance of approval for use of the building (Article 2(2)) and the date of delivery or actual use (Article 23(1)1 and 2 shall be deemed the date of acquisition of each donated property. As seen above, so long as the Plaintiff’s donated property is considered as “the right to acquire real estate”, it shall not be deemed that the time of acquisition has been obtained or reported under the name of a donee for the purpose of constructing a new building in the name of a donee.

2) Therefore, Article 60(1) of the Inheritance Tax and Gift Tax Act provides that the value of donated property shall be assessed on the basis of the market price as of the date of donation with respect to the meaning of "the date of delivery of property or the date of de facto use" under Article 23(1)3 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act. In this context, "the date of donation" means the date on which the ownership of rights is determined. In addition, in applying Article 23(2) and (3) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act Article 23(1) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act, if donated property is stocks, equity shares, or bearer bonds, it shall be deemed to have been acquired on the date on which the delivery or acquisition of stocks, etc. is objectively confirmed by payment of dividends, exercise of shareholder's rights, etc.

㈏ 검토

As seen earlier, in full view of the circumstances such as the date of delivery set by ○○ City’s land supplier’s name change date, and the Plaintiff’s right to acquire real estate by changing the name of the land supplier on March 9, 2006 can be objectively confirmed, it is reasonable to deem that the date on which the Plaintiff received the right to acquire real estate on the instant land was transferred is March 9, 2006, when the change of the name of the land supplier was made.

(3) Value of donated property

㈎ 관련 법리

According to Article 60(1) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 9269, Dec. 26, 2008; hereinafter “Inheritance Tax and Gift Tax Act”) Article 60(1) of the same Act, the value of property on which inheritance tax or gift tax is imposed shall be the market value as of the date of commencing the inheritance or the date of donation (hereinafter “date of appraisal”), and pursuant to Article 60(2) of the same Act, its market value shall include the value deemed ordinarily established when free transactions are conducted between many and unspecified persons, and shall be recognized as the market value under the conditions as prescribed by the Presidential Decree, such as the expropriation, public sale price, and appraisal price. Article 49(1)2 of the Enforcement Decree of the same Act delegated by Article 60(2) of the Inheritance Tax and Gift Tax Act provides that, in principle, the average value of the appraised value of the relevant property may be recognized as the market value by the method of appraisal prescribed by the Presidential Decree within three months before or after the date of appraisal. Furthermore, Article 60(3) of the Inheritance Tax and Gift Tax Act provides that the market value may be determined as the remaining value.

㈏ 검토

1) The fact that the Plaintiff received the right to acquire the instant land on March 9, 2006 and completed the change of the contractor’s name and paid the remainder of the land price on the same day, and subsequently received the registration of ownership transfer of the instant land as seen earlier. In this case, it appears that there is no transaction example concerning the value of the right to acquire the instant land, which reflects an objective exchange value at an appropriate level during the evaluation period (within three months before or after March 9, 2006, which is the evaluation base date). In light of the relevant legal principles as seen above, the value of the right to acquire the instant land as of the evaluation base date is KRW 7 million paid by the date the Plaintiff’s additional assessment base date and the frame [the value assessed by two or more appraisal agencies as of March 9, 2006 by deducting the amount paid by the Plaintiff from KRW 618,072,500) as of March 9, 2006). As a result, the Defendant’s disposal of the instant land as the tax base and value of gift can not be assessed as the Defendant (the Defendant.

2) The value of the right to acquire the land of this case under the premise that March 15, 2002, which is the date of the donation contract of this case, is the basic frame as of the evaluation base date as of March 15, 202.

1) Although it appears to be an appraisal of the instant land itself, in light of the characteristics of the instant land (a reclaimed land without a ground building due to its reclamation condition), there seems to be no special difference from the appraisal of the right to acquire the instant land, barring any special circumstance.

Although it is alleged that it is merely KRW 30,000,000 to KRW 40,000,000, this is not acceptable as it differs from the subject of the instant donation and the lawful date of donation (date of appraisal) and its premise.

3) The Plaintiff asserts that KRW 68,659,800, which was lent to ○○○, should be additionally deducted as it constitutes the donee’s burden under the gift agreement. First of all, according to the purport of each of the entries and arguments as to Gap 5 (including virtual numbers), the Plaintiff appears to have remitted KRW 68,659,80 to the account in the name of ○○○○○○ on August 16, 1996, and KRW 48,659,80 on February 17, 1997. However, in light of the following circumstances acknowledged by the purport of each of the entries and arguments and arguments and the whole purport of each of Gap 2 and Eul 2, i.e., there were no documents such as a written contract, receipt, payment of interest, etc. to recognize that the above amount is a loan to ○○○○○, the Plaintiff and ○○○○ is difficult to readily conclude the type of transaction merely by means of simple remittance, and there is no evidence to acknowledge the Plaintiff’s burden on the above donation.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.