Where a transferee receives delivery of farmland for at least eight years until the time when a transfer contract is concluded and makes it into a site before the intermediate payment or the balance payment, the transfer income tax is imposed (negative)

Article 5 subparagraph 6 (d) of the former Income Tax Act (amended by Act No. 4019 of Dec. 26, 198) and Article 14 (3) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 12564 of Dec. 31, 198) shall be interpreted to the effect that the term “farmland as of the date of transfer” is farmland at the time of conclusion of a transfer contract, and the term “farmland as of the date of transfer” shall be interpreted to the effect that it is farmland at the time of conclusion of the transfer contract, and even if the transferee transferred the land under the contents of the contract and transferred the land before the intermediate payment or the remainder payment, the transfer income tax shall not be levied if the land is self-owned for at least eight years until the time of conclusion of the transfer

Article 5 subparagraph 6 (d) of the former Income Tax Act (amended by Act No. 4019 of Dec. 26, 198), Article 14 (3) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 12564 of Dec. 31, 1988)

[Plaintiff-Appellant] Plaintiff 1 and 1 other (Law Firm Gyeong, Attorneys Park Jae-soo et al., Counsel for plaintiff-appellant)

Park Sung-hwan

Head of Dong Daegu Tax Office

Daegu High Court Decision 89Gu658 delivered on May 9, 1990

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

We examine the grounds of appeal.

Article 5 subparagraph 6 (d) of the former Income Tax Act (amended by Act No. 4019 of Dec. 26, 198) and Article 14 (3) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 12564 of Dec. 31, 1988) interpreted to the effect that the term "farmland as of the date of transfer" as the land cultivated by oneself for not less than eight years until the transfer is not subject to capital gains tax, is required to be farmland at the time of the conclusion of the transfer contract. Even if the transferee transferred the land pursuant to the contents of the contract after the conclusion of the transfer contract and transferred the land before the intermediate payment or the remainder payment is made, the capital gains tax may not be imposed if the land is self-owned for not less than eight years (see Supreme Court Decision 84Nu164 of Apr. 10, 1984).

The court below held that the land category of this case was transferred to or maintained, but in fact, the plaintiff continued to stop rice farming until November 13, 1987, which was the date of the contract for the sale and purchase of the original land after acquiring it on April 17, 197, and the non-party Jong Young-si, the purchaser of the above land, obtained the plaintiff's understanding, changed the land into the actual site in order to create the site, from December 10, 1987, the intermediate payment and the balance payment before the intermediate payment were made, and the income resulting from the plaintiff's transfer of the above land was determined as non-taxable income. Accordingly, the court below's fact-finding and decision are just and there is no violation of the rules of evidence or misapprehension of legal principles as to the lawsuit. The arguments are groundless.

Therefore, the appeal is dismissed and all 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.