Hanjin Group Family Finally Loses Lawsuit Over Transfer Tax of 600 Million Won

[Image source=Yonhap News]

[Asia Economy Reporter Kim Hyung-min] The Hanjin Group's founding family has ultimately lost a lawsuit challenging the capital gains tax of over 600 million KRW imposed on real estate transactions conducted during the lifetime of former Chairman Cho Yang-ho.

According to the legal community on the 27th, the Supreme Court's First Division (Presiding Justice Park Jeong-hwa) upheld the lower court's ruling dismissing the appeal filed by Lee Myung-hee, advisor of Jeongseok Enterprise, Cho Won-tae, Chairman of Hanjin Group, former Korean Air Vice President Cho Hyun-ah, and Hanjin Executive Director Cho Hyun-min against the Jongno Tax Office regarding the cancellation of the capital gains tax imposition. The dismissal without oral argument means the appeal was rejected without substantive review due to the absence of significant legal errors in the lower court's decision.

Former Chairman Cho inherited approximately 1,700 square meters of land in Gyeonggi Province from his father, Cho Jung-hoon, the founder of Hanjin Group, who passed away in 2002. However, it was later discovered that the land was held in name trust by a third party. In 2005, Cho entered into a contract to sell the land to the trustee for about 720 million KRW and received the payment in eight installments around April 2009.

The tax authorities concluded that Cho evaded capital gains tax by selling the land to the trustee without transferring ownership registration and issued a capital gains tax notice of approximately 680 million KRW in 2018. After Cho's passing, his family filed an administrative lawsuit in July 2020 against the tax authorities, claiming the tax imposition was invalid as it was made after the statute of limitations for capital gains tax had expired.

The court ruled that the land transfer occurred in April 2009 and that Cho's actions constituted fraudulent behavior intended to evade capital gains tax, dismissing all claims made by the family.