Seoul Administrative Court Ruling: Overseas Real Estate Gifts Under Scrutiny

2023-08-06 22:00:38

Courtesy of Seoul Administrative Court
A court judgment came out that if you acquired overseas real estate by transferring cash from your mother, it should be regarded as a ‘gift’.

According to the legal community on the 7th, the 2nd administrative division of the Seoul Administrative Court (Chief Judge Shin Myung-hee) recently ruled once morest the plaintiff in a lawsuit for cancellation of the gift tax imposed by Mr. A once morest the head of the Seoul Gwanak Tax Office.

In June 2015, Mr. A received 700 million won in real estate sales from his mother and invested in real estate in Japan. In November of the same year and January of the following year, he received additional transfers of 47 million won and 1 billion won, respectively, and invested a total of 1.76 billion won in Japanese real estate.

The National Tax Service imposed a gift tax of 900 million won, reporting that Mr. A received the gift from his mother from the time he remitted the yen to Japan. Mr. A objected to this and applied for a judgment to the tax tribunal to cancel the imposition of her gift tax, and the tax tribunal partially accepted it and reduced her gift tax to around 636 million won.

Mr. A was dissatisfied with the result and headed to the court. Her mother had to acquire real estate for her nursing home business in Japan, and she was at risk of being forced out, giving her the reason she had no choice but to acquire it instead. In other words, it is argued that her mother only temporarily used her name, and there was no purpose of gifting her.

The court rejected A’s claim. The judge said, “As long as it is revealed that the deposit was withdrawn from the name of the person recognized as the donor and deposited into a savings account in the name of the taxpayer, the deposit is presumed to have been donated to the taxpayer.”

“The plaintiff claims that it was difficult to directly acquire real estate in the name of his mother, but the evidence submitted by the plaintiff is insufficient to admit that fact,” he said. It is difficult to say that it has not been proven.”

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