“Paid less than 100,000 won in annual comprehensive real estate holding tax, down from 10 million won” ... Corporate head who exploited nominee trusts

[Financial News] A corporate head who used a scheme involving a nominee trust to reduce the burden of the comprehensive real estate holding tax, then transferred the trustor’s position to a third party, was referred to prosecutors. Investigators found that the head used this scheme to reduce the annual tax burden, which had been close to 10 million won, to less than 100,000 won the following year.
According to police on the 23rd, the Seoul Dongdaemun Police Station referred Ms. A, a woman in her 40s, and B Corporation, which operates a real estate rental business, to prosecutors without detention on September 2 on suspicion of violating the Real Estate Real Name Act.
Investigators found that in 2022, Ms. A learned about the scheme through online searches because she feared that excessive comprehensive real estate holding tax would be levied on B Corporation, which she heads.
B Corporation entered into a trust agreement naming Ms. A as the trustee, but police determined that it amounted to a nominal trust arrangement in which only the name was lent, without any actual transfer of rights.
Ms. A was found to have taken advantage of the fact that the comprehensive real estate holding tax is calculated and levied based on the trustor, and transferred the trustor’s position to her acquaintance C, whose tax burden was relatively lower.
As a result, Ms. A paid close to 10 million won a year in comprehensive real estate holding tax through 2022, but investigators found that from the following year onward, the amount paid was less than 100,000 won.
Police also found B Corporation responsible for neglecting its duty of care and supervision, and referred it along with Ms. A under the joint penal provisions of the Real Estate Real Name Act.
A police official said, “We plan to continue cracking down on real-estate-related illegal activities, including tax evasion using irregular methods, under our special plan to crack down on real estate crimes,” and added, “Please be aware that you may be punished for avoiding tax burdens through improper means.”
[email protected] Seo Ji-yoon Reporter