Man refuses tax on brother's inheritance, claims it was a loan paid back by sick sibling

According to reports from South Korean news outlets, a man identified only as "Kim" and his wife have lost an administrative case regarding their refusal to pay inheritance tax on 65 million won ($47,500) they received from Kim's deceased brother. The incident took place in Seoul, South Korea.

The controversy began when Kim and his wife received the 65 million won from Kim's brother before his death in 2018. The siblings had reportedly maintained a close relationship, with Kim providing financial assistance to his brother during his illness in the past. However, when the time came for the deceased brother's estate to be distributed, the tax authorities deemed the 65 million won as part of the deceased's inheritance and demanded that Kim and his wife pay inheritance tax on that amount.

Kim and his wife, however, argued that the money they received from Kim's brother was not an inheritance but rather a repayment of a loan. They claimed that they had lent the money to Kim's brother during his illness and that he had promised to repay it before his death. The plaintiffs further argued that they had already repaid the principal amount of the loan to Kim's brother before he passed away.

Despite these arguments, the Seoul Administrative Court ruled against Kim and his wife, stating that the state's tax authorities were justified in taxing the 65 million won as part of the deceased brother's inheritance. The court reasoned that there was no evidence presented to prove that the transaction between Kim and his brother was indeed a loan, and that the plaintiffs had failed to provide sufficient documentation to support their claim.

The court order also stated that even if the transaction had been a loan, it would not have exempted Kim and his wife from paying inheritance tax since the deceased brother had not fully repaid the loan at the time of his death. The court further noted that Kim and his wife had not reported the receipt of the 65 million won as income in their tax filings for that year, which could have resulted in additional penalties if they were found to be in violation of tax laws.

The ruling is significant as it sets a precedent for similar cases involving the transfer of assets between family members in South Korea. It also highlights the importance of maintaining proper documentation and reporting such transactions to the relevant authorities to avoid potential legal issues and financial penalties.

In conclusion, Kim and his wife have lost an administrative case in which they argued that 65 million won they received from Kim's deceased brother before his death was not subject to inheritance tax as it was a repayment of a loan. However, the Seoul Administrative Court ruled against them, stating that there was insufficient evidence to prove that the transaction was indeed a loan, and that Kim and his wife had failed to report the receipt of the funds as income. The ruling sets a precedent for similar cases involving family transfers of assets in South Korea.