2007년도 「상속세 및 증여세법」 판례 회고

The Supreme Court cases in 2007 regarding the Inheritance Tax and Gift Tax Act(the “Inheritance Tax Act") were mostly confirming the existing Supreme Court's position except a few cases that have value as precedents as discussed below. First, the Article 8 of the Inheritance Tax Act regards insurance proceeds received on a life insurance policy or accident insurance policy where the inheritee was a beneficiary of such insurance policies to be included in the estate of a deceased. The Supreme Court found that the Article 8 of the Inheritance Tax Act is not unconstitutional(2005du5529) as the provision is to accomplish the substance over form principle and equity of taxation since such receipt of insurance proceeds has the effect of inheriting a property, which I agree with the Supreme Court's position. Second, the Supreme Court held that the proceeds from sale of entrusted shares returned by a trustee to the actual owner can not be regarded as a return of property deemed donated. However, considering that the legal rationale for treating the entrusted property as a donated property under the Inheritance Tax Act is to prevent the title trust system from being used as a tool for tax avoidance, it is doubtful whether the Supreme Court's judgment is appropriate even in cases where the return of sales proceeds does not change the tax burden of a title owner. Third, the Supreme Court held that desired price of publicly offered shares or the price of publicly offered shares cannot be considered to be the market price at the time of transfer taking into account how the price or anticipated price is determined and a difference between the time the price is determined and the time the share are transferred(2005du2841). I agree with the Supreme Court's position since the initial price of publicly offered shares does not properly reflect the market price when only a limited number of persons participate in the subscription of such publicly offered shares. In addition, there are also other noteworthy Supreme Court cases；(1) the decision that the provisions regarding the time of transfer or time of acquisition under the Income Tax Act also apply to the inherited properties；(2) the decision that the value of deemed donated property of forfeited stocks should be calculated using a supplementary method prescribed by the Inheritance Tax Act ；and (3) the decision that when the inherited properties are executed through negotiated contracts because such inherited properties are not sold in an auction, the auction price is regarded to be a market price.