【Holding】
[1] Where, in imposing capital gains tax on the transfer of inherited property, the tax authority assessed the acquisition value of the asset at the individually assessed official land price on the ground that it was difficult to assess the market price of the asset at the time of inheritance and imposed tax accordingly, but the market price of the asset at the time of inheritance is proven by the close of pleadings in the fact-finding instance of the action for revocation of the tax assessment, the reference price for determining whether the tax amount of the assessment exceeds the legitimate tax amount (= market price) / Meaning of "market price" in this context / Whether this legal principle applies even where the tax authority imposed tax by applying the part in the second parentheses of Article 163(9) of the former Enforcement Decree of the Income Tax Act (where there is a value determined or corrected by the head of a tax office, etc.) on the ground that it had previously determined the value of the inherited property, unless that value is recognized as a market price with objectivity and reasonableness (affirmative)
[2] Legislative purpose of providing in Article 49(5) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act that the sale price of similar property, etc. shall be deemed the market price / Matters to be considered in determining whether property constitutes similar property, and whether property may constitute similar property where, even though one of the matters to be considered differs from that of the relevant property, it is evaluated as identical or similar to the relevant property as a whole when the other points are also considered (affirmative, in principle)
[3] In a case where, when A, who had inherited land, did not file an inheritance tax return, the competent head of the tax office assessed the value of the land according to the supplementary valuation method and determined both the tax base and the tax amount of inheritance tax as "zero"; seven years later, A transferred the land and made a preliminary return and payment of capital gains tax using as the acquisition value the value set by the former head of the tax office, and then filed a request for correction seeking to reflect as the acquisition value of the land the average of the appraised values obtained from two appraisal firms; and the competent head of the tax office refused it, the Court upheld the lower court's judgment that the disposition was unlawful
【Summary of Decision】
[1] In imposing capital gains tax on the transfer of inherited property, even where the tax authority assessed the acquisition value of the asset at the individually assessed official land price on the ground that it was difficult to assess the market price of the asset at the time of inheritance and imposed tax accordingly, if the market price of the asset at the time of inheritance is proven by the close of pleadings in the fact-finding instance of the action for revocation of the tax assessment, the legitimate transfer margin and tax amount must be calculated on the basis of that market price, and then it must be determined whether the tax amount of the assessment exceeds the legitimate tax amount. Here, "market price" in principle means the objective exchange price formed through normal transactions. This legal principle should be regarded as applying equally even where the tax authority imposed tax by applying the part in the second parentheses of Article 163(9) of the Enforcement Decree of the Income Tax Act (hereinafter the "above provision") on the ground that it had previously made a determination or correction of the value of the inherited property under Article 76 of the Inheritance Tax and Gift Tax Act (hereinafter the "Inheritance Tax and Gift Tax Act"), unless that value is recognized as a market price with objectivity and reasonableness. The specific reasons are as follows.
① Where the property received by an heir through inheritance exists but the inheritance tax payable is "zero" due to the application of inheritance deductions, etc., no tax burden arises for the heir for the time being, and whether and when the inherited property will be transferred and the amount of the capital gains tax burden are merely uncertain future circumstances; accordingly, in reality, heirs will not infrequently take no particular action regarding the determination of the inheritance tax base without considering the capital gains tax that may become an issue upon the future transfer of the inherited property. Nevertheless, if the above provision were interpreted to mean that "as long as a determination or correction of the value of inherited property by the head of a tax office, etc. under Article 76 of the Inheritance Tax and Gift Tax Act precedes in time, the value set by such determination or correction is unconditionally deemed to be the acquisition value of the asset at the capital gains tax stage," where the inheritance tax payable is "zero," the unjust result would follow that the taxpayer is effectively deprived, at both the inheritance tax and the capital gains tax stages, of the opportunity to judicially challenge the value of the inherited property set in the determination of the inheritance tax base. Therefore, in order to sufficiently guarantee the constitutional property rights and the right to trial of citizens who are taxpayers, the scope of application of the above provision should be interpreted restrictively, so that it may apply only where the value determined or corrected by the head of a tax office, etc. for the inherited property satisfies objectivity and reasonableness. In this way, the taxpayer is substantially afforded, at least at the capital gains tax stage, the opportunity to dispute the "market price at the time of acquisition" of the inherited property deducted from the transfer margin and can be relieved of the disadvantage of bearing an excessive capital gains tax burden, which is also consistent with the principle of taxation according to ability to pay under the Income Tax Act and the principle of guaranteeing property rights under the Constitution.
② The above provision was indeed introduced to correct, at the capital gains tax stage, the inconsistency between the standard for calculating the value of inherited property at the inheritance tax stage and the standard for calculating the acquisition value at the capital gains tax stage. However, even considering this legislative purpose, deeming the value of the inherited property determined or corrected by the head of a tax office, etc. at the time of the determination of the inheritance tax base to be the actual transaction value at the time of acquisition under the above provision should be understood as presupposing that the value satisfies objectivity and reasonableness. Beyond this, there is no basis for regarding the above provision as having been introduced to preclude the taxpayer from disputing, at the capital gains tax stage, errors in the previous determination of the inheritance tax base.
[2] The purpose of providing in Article 49(5) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (before being amended by Presidential Decree No. 26960, Feb. 5, 2016; hereinafter the "former Enforcement Decree of the Inheritance Tax and Gift Tax Act") that the sale price of similar property, etc. shall be deemed the market price is to achieve fair taxation according to the ability to bear taxes by correcting the unreasonableness of being unable to recognize as the market price the sale price of other property identical or similar to the relevant property in area, location, use, and type even though such sale price exists.
In light of the purport, wording, and structure of Articles 94(1), 96(1), and 97(1)1 and (5) of the Income Tax Act, Article 163(9) of the Enforcement Decree of the Income Tax Act, Article 60(2) of the Inheritance Tax and Gift Tax Act, and Article 49(1) and (5) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act, where the transaction price, etc. of similar property is deemed the market price of the relevant property under Article 49(5) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act, whether property constitutes similar property should be determined by focusing on whether the similar property can be regarded as appropriately reflecting the objective exchange value of the relevant property formed through general and normal transactions, while comprehensively considering the various circumstances set forth in Article 49(5) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act, such as the area, location, use, type, and standard market price of the similar property. Therefore, absent special circumstances such as other statutory provisions, even if one of the above matters to be considered differs from that of the relevant property, the property may constitute similar property where it is evaluated as identical or similar to the relevant property as a whole when the other points are also considered.
[3] In a case where, when A, who had inherited land, did not file an inheritance tax return, the competent head of the tax office assessed the value of the land according to the supplementary valuation method and determined both the tax base and the tax amount of inheritance tax as "zero"; seven years later, A transferred the land and made a preliminary return and payment of capital gains tax using as the acquisition value the value set by the former head of the tax office, and then filed a request for correction seeking to reflect as the acquisition value of the land the average of the appraised values obtained from two appraisal firms; and the competent head of the tax office refused it, the Court upheld the lower court's judgment that the entire disposition was unlawful, which reasoned as follows: ① if a taxpayer who was not afforded an opportunity to challenge the determination of the inheritance tax base in the first place were unable to dispute at all whether the value set in that determination is lawful and appropriate even at the stage of seeking revocation of the tax authority's imposition of capital gains tax or refusal of a request for correction, the taxpayer would be seriously deprived of the opportunity for remedy; for these and other reasons, A may assert, as a ground for the unlawfulness of the disposition, the market price of the land at the time of commencement of inheritance, which takes precedence over the above value determination; and ② on the premise that where actual transaction examples exist and the transaction price constitutes a price formed through normal transactions appropriately reflecting the objective exchange value of the inherited property, it cannot be regarded as a case where it is difficult to calculate the market price in the first place, so that the value cannot be calculated according to the supplementary valuation method, although the area of the comparable land for which A asserted the existence of a comparable sale price in seeking revocation of the disposition differs somewhat from that of the land in question, there are no circumstances indicating that the area itself was an important factor in the process of calculating the value of each parcel; for these and other reasons, the value of the land calculated on the basis of the transaction price of the comparable land has objectivity and reasonableness and is properly regarded as the acquisition value for calculating capital gains tax on the land, and when the legitimate tax amount payable by A is calculated on the basis of that value, the tax amount to be refunded by the head of the tax office exceeds the tax amount for which A requested correction.
【Referenced Statutes】
[1] Article 97(1)1(a) of the Income Tax Act; Article 163(9) of the Enforcement Decree of the Income Tax Act; Articles 60 and 76 of the Inheritance Tax and Gift Tax Act [2] Articles 96(1) and 97(1)1 and (5) of the Income Tax Act; Article 163(9) of the Enforcement Decree of the Income Tax Act; Article 60(2) of the Inheritance Tax and Gift Tax Act; Article 49(1) and (5) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (before being amended by Presidential Decree No. 26960, Feb. 5, 2016) [3] Articles 94(1)1 and 97(1)1 and (5) of the former Income Tax Act (before being amended by Act No. 20615, Dec. 31, 2024); Article 163(9) of the Enforcement Decree of the Income Tax Act; Articles 60, 61(1), 67, and 76 of the former Inheritance Tax and Gift Tax Act (before being amended by Act No. 13557, Dec. 15, 2015); Article 49(1) and (5) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (before being amended by Presidential Decree No. 26960, Feb. 5, 2016)
【Referenced Precedents】
[1] Supreme Court Decision 2010Du8751, September 30, 2010 (Gong2010Ha, 2022)
(Source: Supreme Court Decision 2025Du32147, August 12, 2026 | Judicial Information Disclosure Portal, Precedents)
2026. 10. 14. · By Attorney Dongwoo Shin
Call
KakaoTalk
E-mail