Whether restitution of ownership due to termination of trust is subject to capital gains tax (negative)

The return of ownership due to the termination of trust does not correspond to the ‘the actual transfer of the asset under the Article 24 (3) of the Income Tax Act, which is the object of taxation of the transfer income tax.'

Article 4 (3) of the Income Tax Act

Supreme Court Decision 83Nu575 Decided February 14, 1984

Plaintiff

The Director of Gangnam District Office

Seoul High Court Decision 88Gu1270 delivered on June 29, 1989

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

The grounds of appeal by the defendant litigant are examined.

The restoration of ownership upon termination of a trust does not correspond to "the actual transfer of assets for consideration" under Article 4 (3) of the Income Tax Act (see, e.g., Supreme Court Decision 83Nu575, Feb. 14, 1984). According to the records, the court below did not have any evidence that the plaintiff actually purchased the land of this case and then transferred it for consideration as stated in the records. In light of the facts of recognition, the court below did not have any evidence that the plaintiff returned the real estate of this case under title trust to the plaintiff. Thus, the disposition of this case, which was issued on the premise that there was a transfer of property for consideration, subject to the transfer income tax, cannot be considered as a transfer of the property for consideration. Thus, the decision of this case is justified, and there is no error

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Lee Chang-chul (Presiding Justice)