It constitutes a fraudulent act to avoid capital gains tax if the cash donation of large amount of money is made in excess of debt.

Transfer of real property and donation of a large amount of cash to the Defendants, who are the Defendants in excess of debt, constitutes a fraudulent act committed for the purpose of evading a large amount of transfer income tax by expectationing that the transfer income tax will be imposed later.

2011 Gohap 10815 Revocation of Fraudulent Act

Korea

ParkA et al.

January 11, 2013

January 25, 2013

1. The contract of donation between Nonparty B and Defendant LA on November 10, 2008 with respect to KRW 000,000 which was concluded on November 10, 2008 and the contract of donation with respect to KRW 000,000, which was concluded on November 10, 2008 between Defendant LA and Defendant LA.

2. The Plaintiff shall pay to the Plaintiff the amount of KRW 000, Defendant Park Jong-A, and the amount of KRW 000 and 5% interest per annum from the day following the day when the judgment of this case became final and conclusive to the day of full payment.

3. The costs of lawsuit shall be borne by the Defendants.

The same shall apply to the order.

1. Indication of claim;

The reasons for the attached Form shall be as shown in the attached Form.

2. Applicable provisions;

Article 208(3)3 of the Civil Procedure Act (Judgment by Service of Public Notice)

Grounds of Claim

1. Relationship between the parties;

The defendant Park A and the defendant Park E-E have the honor of Park Jae-B (000, O00 at the court of Pakistan in Gyeonggi-do) of the non-party in arrears. (Evidence A 1 - a certified copy of the book of removal)

2. Formation of preserved claims;

(a) Circumstances of taxation;

On November 13, 2008, Non-party ParkB transferred non-party 4 parcels of non-party 1, 200, O2, 000, and 000,000 won, and filed a global income tax by classifying transfer margin as real estate trading business, but the head of ○○ Tax Office under the Plaintiff-affiliated Tax Office confirmed that transfer income tax is subject to assessment and notified as of August 31, 2010, but the amount of arrears was partially paid as of the filing date of the lawsuit. (The specific content of No. 2 No. 1-2, referring to the table below)

(A) Details of preserved claims (necessary to repreparation the details of changes upon receipt of the complaint) shall be omitted.

B. Establishment of preserved claims

The date of establishment of the preserved claim is that the national tax in this case may be the preserved claim against the right to cancel the fraudulent act in accordance with the following legal principles.

“The claim protected by the obligee’s right of revocation is, in principle, arising prior to the commission of an act that can be deemed a fraudulent act. However, there is high probability that at the time of a fraudulent act, the legal relationship, which serves as the basis of the establishment of the claim, has already occurred in the near future, and that the establishment of the claim would be based on such legal relationship in the near future. In the event that a claim is established in the near future and its probability has been realized, the claim may also become a preserved claim, and the legal relationship, which is the basis of the establishment of the claim, shall not be limited to the legal relationship between the parties, but shall be deemed to include the quasi-legal relationship, fact-finding, etc. with the probability of the establishment of the claim.”

According to the above legal principles, the transferee paid KRW 000 as down payment on August 6, 2008 and KRW 0000 on September 30, 2008 in order to purchase the instant real estate. Considering that part of the remainder was paid on November 6, 2008, it is deemed that the legal relationship had already been formed, which is the taxation requirement for the collection of tax, prior to November 10, 2008, the date of the instant fraudulent act, which is the date of the instant fraudulent act, was likely to cause the instant national tax, and the notice of national tax was issued in reality. Thus, there is no defect that the instant national tax becomes the preserved claim (No. 3-4).

3. Occurrence of a fraudulent act;

Nonparty B, a delinquent taxpayer, transferred to KRW 000,000, and KRW 4,000,000,000 OOdong-dong, Young-gu, Seoyang-gu, Gyeonggi-do. On November 10, 2008, he deposited KRW 000 out of the transfer proceeds in Defendant LbA’s OO Nong account with KRW 000,000, and donated cash by depositing KRW 000 in Defendant LbE’s OO account with KRW 000. (No. 4, 1,000)

4. Reduction and excess of liability property;

On November 10, 2008, at the time of the fraudulent act in this case, the active property of Nonparty ParkB is the sum of KRW 000 of real estate in Table 2, KRW 000 of credit (the balance of the transfer price) and KRW 0000 of the OOO Nong’s account, KRW 0000 of the balance of KRW 0000, and KRW 0000 of the OOO Nong’s account, which is the sum of KRW 000 of national tax preserved credit amount, KRW 00 of loans of the Korean community credit cooperatives, KRW 000 of loans of the No.5, KRW 000, and KRW 000 of national bank loans of the Korean bank (No. 5-3).

Table 2: Pursuant to the real estate details held as of November 10, 2008, ParkB, who had already been in excess of its obligation, donated part of the transfer price of real estate to the Defendants, the gift contract of this case, which was partially donated to the Defendants, has the possibility of preventing the satisfaction of the Plaintiff’s claim, which is the taxation right holder by reducing

5. The intention of an injury.

The act of ParkB, who is a delinquent taxpayer, transferred real estate, and donated a total of 000 won of a large amount of cash to the Defendants, who were on November 10, 2008 from debt excess status, was known to the effect that it would harm the Plaintiff, who is a tax claim, due to an act conducted for the purpose of evading a high amount of capital gains tax.

6. Bad faith of the defendant

Since Defendant LA and Defendant LAE had been in excess of the obligation of ParkB as of the date of the fraudulent act with the children of Nonparty LB, the Defendants should be deemed to have known the fact that the act of donation was a fraudulent act at the time of the instant donation contract and the intention of ParkB’s deliberation.

7. The date on which he becomes aware of a fraudulent act;

As such, the fact that ParkB donated cash to the Defendants was known to the Defendants during the review of the relevant content on July 27, 201, by receiving replies to the provision of financial transaction information from Nonghyup to arrange national taxes in arrears (No. 4-1-2).

8. Value compensation.

In light of the above facts, the gift contract of this case between ParkBB and the Defendants was known to the Defendant that was aware that it would prejudice the taxation right holder in order to be exempted from the disposition of default on national taxes due to default on national taxes, and thus, the Defendant also sought revocation of the objection pursuant to Article 30 of the National Tax Collection Act and Article 406 of the Civil Act, and the Defendants are obligated to return to the Plaintiff KRW 000,000,000, which was donated by Nonparty ParkB. However, as the Defendants used and consumed the money donated, it is impossible for the Plaintiff to return the actual originals as a result of the use and consumption of the money donated by the Defendants, and thus, the Plaintiff seeks to seek compensation as