Open Decision Ledger · Tax & international taxation
Burden of proof and tax-avoidance purpose in a deemed gift of trust property
Supreme Court, Oct. 25, 2018, 2013Du13655 (judgment)
Case name: 증여세부과처분취소
Official text on the National Law Information Center
Question
Under Article 45-2(1) of the former Inheritance and Gift Tax Act, who must prove that the parties agreed to create a trust so that the nominee of the property differs from its actual owner, and can a purpose of tax avoidance be found where the trust was made for another reason and only a minor tax relief followed it?
Holding
The tax authority must prove the agreement establishing the trust and that the nominee of the property differs from its actual owner. Where the trust was carried out for a reason other than tax avoidance and only a minor tax relief arises incidentally upon it, a purpose of tax avoidance under Article 45-2(1) of the former Inheritance and Gift Tax Act cannot be found. The Court reversed the appellate judgment, cancelled the surtax assessment part of the first-instance judgment and dismissed that part of the suit, and remanded the remaining assessments to the Seoul High Court.
Summary of the holding, verbatim
명의신탁이 조세회피 목적이 아닌 다른 이유에서 이루어졌음이 인정되고, 명의신탁에 부수하여 사소한 조세경감이 생기는 것에 불과한 경우에는 구 상속세 및 증여세법(2007. 12. 31. 법률 제8828호로 개정되기 전의 것) 제45조의2 제1항의 조세회피 목적이 있었다고 볼 수 없다.
Unofficial English translation
Where it is recognized that the entrustment of title under another's name was made for reasons other than the purpose of tax avoidance, and no more than a trivial tax reduction arose incidentally to such entrustment of title under another's name, it cannot be regarded that there existed the purpose of tax avoidance under Article 45-2, paragraph (1) of the former Inheritance Tax and Gift Tax Act (before amended by Act No. 8828 on December 31, 2007).
Disposition
Reversed and remanded Stated in the decision
원심판결을 파기한다. 제1심판결 중 가산세 부과처분 부분을 취소하고, 이 부분 소를 각하한다. 이 사건 중 가산세를 제외한 나머지 부과처분 부분을 서울고등법원에 환송한다.
Unofficial English translation
The judgment of the court below is reversed. The part of the judgment of the court of first instance concerning the imposition of the additional tax is canceled, and the action in this part is dismissed on procedural grounds. This Case, in the part concerning the assessment disposition other than the additional tax, is remanded to the Seoul High Court.
Form of the test
Elements stated Stated in the decision
구 상속세 및 증여세법(2007. 12. 31. 법률 제8828호로 개정되기 전의 것) 제45조의2 제1항의 명의신탁재산 증여의제규정은 권리의 이전이나 행사에 등기 등을 요하는 재산의 실제소유자와 명의자가 다른 경우에 적용되는 것이고
Unofficial English translation
The provision deeming a property held under entrusted title to be a gift under Article 45-2, paragraph (1) of the former Inheritance Tax and Gift Tax Act (before amended by Act No. 8828 on December 31, 2007) applies where the actual owner and the registered owner of a property whose transfer or exercise of rights requires registration or the like differ from each other, and
Factors
- 권리의 이전이나 행사에 등기 등을 요하는 재산의 실제소유자와 명의자가 다른 경우에 적용되는 것이고
- 당사자들 사이에 명의신탁 설정에 관한 합의가 존재하여 해당 재산의 명의자가 실제소유자와 다르다는 점은 과세관청이 증명하여야 한다
- 명의신탁이 조세회피 목적이 아닌 다른 이유에서 이루어졌음이 인정되고, 명의신탁에 부수하여 사소한 조세경감이 생기는 것에 불과한 경우에는
Unofficial English translation
• it applies where the actual owner and the registered owner of a property whose transfer or exercise of rights requires registration or the like differ from each other, and
• where an agreement to entrust the title under another's name exists between the parties and the registered owner of the relevant property differs from the actual owner, the tax authority must prove that fact
• where it is recognized that the entrustment of title under another's name was made for reasons other than the purpose of tax avoidance, and no more than a trivial tax reduction arose incidentally to such entrustment of title under another's name,
Relation to precedent
Follows earlier decisions Stated in the decision
대법원 2017. 5. 30. 선고 2017두31460 판결
Unofficial English translation
Supreme Court Decision 2017Du31460 decided May 30, 2017
Decisions referred to
[1] 대법원 2009. 9. 24. 선고 2009두5404 판결, 대법원 2017. 5. 30. 선고 2017두31460 판결(공2017하, 1410) / [2] 대법원 2006. 5. 12. 선고 2004두7733 판결(공2006상, 1063), 대법원 2009. 4. 9. 선고 2007두19331 판결(공2009상, 670), 대법원 2011. 3. 24. 선고 2010두24104 판결, 대법원 2017. 2. 21. 선고 2011두10232 판결(공2017상, 646), 대법원 2017. 6. 19. 선고 2016두51689 판결, 대법원 2017. 12. 13. 선고 2017두39419 판결(공2018상, 231)
Burden of proof
The party asserting Stated in the decision
이때 당사자들 사이에 명의신탁 설정에 관한 합의가 존재하여 해당 재산의 명의자가 실제소유자와 다르다는 점은 과세관청이 증명하여야 한다.
Unofficial English translation
In this regard, where an agreement to entrust the title under another's name exists between the parties and the registered owner of the relevant property differs from the actual owner, the tax authority must prove that fact.
Open question and revisit condition
Where a change of holding structure serves a clear non-tax reason and at the same time avoids a substantial withholding tax on dividends, at what point does the tax benefit cease to be incidental?
A later Supreme Court decision that reallocates the burden of proof under the deemed gift provision, or that attributes ownership of a foreign paper company's shares to its ultimate shareholder, would require this entry to be read again. An amendment to Article 45-2 of the Inheritance and Gift Tax Act would have the same effect.
Cross-family AI independent reading & axis check
6 of 8 axes matched GPT-6 Astra (OpenAI, codex CLI) · 2026-10-25
A reader from another model family (GPT-6 Astra), given the official text but not the primary reading, agreed on 6 of the 8 axes; the readings differed on axis 3 (disposition), axis 7 (burden of proof).
Axis 3 (Disposition): Primary “Reversed and remanded” vs Independent “Partly reversed and remanded”
The primary reads the order as a plain reversal and remand, while the independent reads it as a partial remand, since the order cancels and dismisses the surcharge part and remands only the rest.
원심판결을 파기한다. 제1심판결 중 가산세 부과처분 부분을 취소하고, 이 부분 소를 각하한다. 이 사건 중 가산세를 제외한 나머지 부과처분 부분을 서울고등법원에 환송한다.Axis 7 (Burden of proof): Primary “The party asserting” vs Independent “The opposing party”
The holding places the proof of the trust agreement and the nominee difference on the tax authority, so the burden follows the party asserting the trust, while the independent label names the opposing party; the two labels point the same way but frame the party differently.
당사자들 사이에 명의신탁 설정에 관한 합의가 존재하여 해당 재산의 명의자가 실제소유자와 다르다는 점은 과세관청이 증명하여야 한다.Raw responses and comparison record: Protocol · Blind readings (JSONL) · Axis comparison (JSONL) · SHA-256 (JSON)
Lower-court contrast & scope of application
Lower-court reading vs. Supreme Court holding
Lower-court context: The Seoul High Court, in its judgment of 5 June 2013 (2012Nu21415), held that in September 1999 Plaintiff 2 entrusted the Yolrim Technology shares to C.C.C. and, in December 2007, terminated that trust and entrusted the shares to Plaintiff 1, or alternatively that Plaintiff 2 held the shares through C.C.C., a mere paper company. It found that the entrustment served a purpose of tax avoidance, avoiding comprehensive income tax on dividend income and avoiding recapture of tax incentives for a foreign-invested enterprise, and rejected all the plaintiffs' arguments.
Supreme Court standard: The Supreme Court held that C.C.C. was a lawfully incorporated corporation with legal personality which acquired and held the shares in its own name, so the mere fact that Plaintiff 2 was the sole ultimate shareholder does not deny C.C.C.'s ownership, and there was no evidence of a trust agreement between them. The entrustment to Plaintiff 1 in December 2007 was made for the clear reason of passing the Kosdaq listing review, on the advice of the lead securities company; the shareholding ratio showed no avoidance of the deemed acquisition tax on quasi-shareholders, and the withholding tax on the KRW 300 million dividend, KRW 45 million withheld from Plaintiff 1, was of no great significance when compared with the tax that would have applied had C.C.C. received it in its own name. It found the court below had misapprehended the law on the trust relationship and the purpose of tax avoidance. It dealt with the surtax part on its own motion, since the defendant had cancelled that assessment ex officio around 6 December 2012 and the suit on it lacked interest.
Distinguishing conditions
- A case in which the shares were not acquired and owned by a lawfully incorporated corporation with legal personality, or in which evidence shows that the controlling shareholder reserved ownership against that company.
- A trust made to avoid a substantial tax, such as the deemed acquisition tax on quasi-shareholders and the second-order tax liability, or the withholding tax on dividends on a large scale.
- Property for which registration and the like are not required in the transfer or exercise of rights, since the presumption provision applies only to such property.
Record verification notes
Establish from the file which entity concluded the share purchase contract, paid the price and was entered as shareholder, and whether the tax authority proved an agreement establishing a trust between that entity and the controlling shareholder, since that proof is on the tax authority. Then weigh the tax benefit actually obtained, here the withholding tax difference on one dividend, against the stated non-tax reason, and check whether the entrustment preceded the amendment of 31 December 2007 (Act No. 8828), as the decision applies the pre-amendment Article 45-2(1).
From the official text
Points at issue
[1] 구 상속세 및 증여세법 제45조의2 제1항의 명의신탁재산 증여의제규정이 적용되는 경우인 명의신탁 설정에 관한 합의가 존재하여 해당 재산의 명의자가 실제소유자와 다르다는 점에 관한 증명책임의 소재(=과세관청) [2] 명의신탁이 조세회피 목적이 아닌 다른 이유에서 이루어지고 명의신탁에 부수하여 사소한 조세경감이 생긴 것에 불과한 경우, 구 상속세 및 증여세법 제45조의2 제1항에서 정한 ‘조세회피의 목적’이 있었다고 볼 수 있는지 여부(소극)
Unofficial English translation
[1] The location of the burden of proof (= the tax authority) as to the existence of an agreement to entrust title under another's name and the fact that the registered owner of the relevant property differs from the actual owner, which constitutes a case where the provision deeming a property held under entrusted title to be a gift under Article 45-2, paragraph (1) of the former Inheritance Tax and Gift Tax Act applies [2] Whether the "purpose of tax avoidance" provided in Article 45-2, paragraph (1) of the former Inheritance Tax and Gift Tax Act can be regarded as having existed, where the entrustment of title under another's name was made for reasons other than the purpose of tax avoidance and no more than a trivial tax reduction arose incidentally to the entrustment of title under another's name (negative)
Summary of the holding
[1] 구 상속세 및 증여세법(2007. 12. 31. 법률 제8828호로 개정되기 전의 것) 제45조의2 제1항의 명의신탁재산 증여의제규정은 권리의 이전이나 행사에 등기 등을 요하는 재산의 실제소유자와 명의자가 다른 경우에 적용되는 것이고, 이때 당사자들 사이에 명의신탁 설정에 관한 합의가 존재하여 해당 재산의 명의자가 실제소유자와 다르다는 점은 과세관청이 증명하여야 한다. [2] 명의신탁이 조세회피 목적이 아닌 다른 이유에서 이루어졌음이 인정되고, 명의신탁에 부수하여 사소한 조세경감이 생기는 것에 불과한 경우에는 구 상속세 및 증여세법(2007. 12. 31. 법률 제8828호로 개정되기 전의 것) 제45조의2 제1항의 조세회피 목적이 있었다고 볼 수 없다.
Order
원심판결을 파기한다. 제1심판결 중 가산세 부과처분 부분을 취소하고, 이 부분 소를 각하한다. 이 사건 중 가산세를 제외한 나머지 부과처분 부분을 서울고등법원에 환송한다.
Unofficial English translation
The judgment of the court below is reversed. The part of the judgment of the court of first instance concerning the imposition of the additional tax is canceled, and the action in this part is dismissed on procedural grounds. This Case, in the part concerning the assessment disposition other than the additional tax, is remanded to the Seoul High Court.
Provisions referred to
[1] 구 상속세 및 증여세법(2007. 12. 31. 법률 제8828호로 개정되기 전의 것) 제45조의2 제1항 [2] 구 상속세 및 증여세법(2007. 12. 31. 법률 제8828호로 개정되기 전의 것) 제45조의2 제1항
Read 2026-10-25 · Cross-read 2026-10-25. All quotes matched against the official text. The Chinese-character placeholders the court used for anonymised parties are given in their Korean readings, and parenthetical Chinese-character glosses are omitted.
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