Tax Tribunal Releases Key Decisions for Q2
[Sejong=Asia Economy Reporter Son Seonhee] A couple, Mr. A and Mrs. B, who have been running a store together and saving money, paid a jeonse deposit for a house to move. Although the jeonse contract was made with the deposit withdrawn from a savings account under Mr. A's name, the contract was signed under the name of his spouse, Mrs. B. However, Mr. A later passed away. In this case, is the already paid jeonse deposit subject to inheritance tax?
On the 30th, the Tax Tribunal under the Prime Minister's Office disclosed key decisions selected from tax appeal cases decided in the second quarter.
The inheritance tax case decided on April 27 focused on whether the "jeonse deposit paid from the deceased spouse's savings" could be considered joint property of the couple. The tax authority regarded the jeonse deposit withdrawn from the deceased Mr. A's savings account as "prior gift property" and imposed gift tax, notifying the heir, Mrs. B, to pay inheritance tax by adding it to the taxable inheritance amount. They concluded that it was not proven that the money withdrawn from Mr. A's account was income earned jointly by the couple.
In response, the heir Mrs. B filed a tax appeal, and the Tax Tribunal concluded that "half of the disputed amount should be excluded from the prior gift property (taxable amount) and inheritance tax should be corrected accordingly." They recognized the jeonse deposit as joint property of the couple and required inheritance tax payment only on half of the deposit.
The reason for this judgment was that Mr. A and Mrs. B had operated the store together for 29 years, and although the savings account was under the deceased Mr. A's name, it was confirmed that the couple shared the account number and password and managed the funds together. In other words, the jeonse deposit withdrawn from Mr. A's account was part of the couple's joint property earned through their joint business, and half of that amount was Mrs. B's separate property, so it could not be considered a "prior gift."
Meanwhile, the Tax Tribunal stated that this key decision was selected mainly from cases closely related to citizens' daily life, business activities, and economic life, regardless of the tax amount or complexity of the law. They plan to continue selecting and disclosing major decisions every quarter, and related information can be found on the Tax Tribunal's website.
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