Supreme Court justice nominee Kim Seong-su on the 14th said he is proceeding with the payment procedure for gift tax in connection with allegations that his brother-in-law is letting him live in a "sublease" of the Dogok Rexle apartment in Dogok-dong, Gangnam-gu, Seoul, which the brother-in-law rented on a jeonse deposit, at a price far below market rates.
Kim answered this way at the National Assembly confirmation hearing to a question from lawmaker Chae Hyun-il of the Democratic Party of Korea regarding the apartment sublease and gift tax controversy.
According to People Power Party lawmaker Joo Jin-woo, Kim lived on a jeonse deposit beginning in Feb. 2011 in a 25-pyeong unit at Yeoksam e-Pyunhansesang in Yeoksam-dong, Gangnam-gu, Seoul, owned by his brother-in-law, and in June 2021 moved to a 43-pyeong unit at Dogok Rexle in Dogok-dong, Gangnam-gu.
For the Dogok Rexle apartment, the brother-in-law signed a jeonse contract with the owner in the 1.5 billion won range, and later gave Kim a sublease with a security deposit of 350 million won. Kim agreed to pay 800,000 won per month in the nature of rent, but from Nov. 2023 to on the 8th it was not paid. He also faced criticism that the difference from the market jeonse price is subject to gift tax.
Regarding the sublease contract of a 350 million won deposit with monthly payments of 800,000 won, Kim explained, "I held a portion of a claim against my brother-in-law for the deposit previously paid, and while I do not consider it rent, we had agreed to share the expense for financing costs."
He said, "At the time, I had no intention whatsoever of receiving a gift," and added, "In preparing for the recent hearing, I learned that it could be deemed a 'deemed gift.'" He continued, "As a legal professional, not knowing falls short of the public's expectations. Back then, I did not think that far."
Kim said, "Recently, through a tax accountant, I reviewed whether it is subject to gift tax," adding, "By this morning, for the portions subject to taxation, I am proceeding with the payment procedure. I am sorry."
Kim said that, regarding his failure to pay the monthly 800,000 won to his brother-in-law since Nov. 2023, he recently paid it in a lump sum.
Regarding living together with his brother-in-law in 2021, Kim said, "Around that time, the company in Pangyo where my brother-in-law worked was planning to relocate its headquarters to near Yeoksam-dong, where we lived," and added, "My mother-in-law suggested to him, 'That apartment is too small to live together, so how about renting a slightly larger apartment and living together with your older sister's family?' and after my spouse, my brother-in-law, and my mother-in-law discussed it, we sold the Yeoksam-dong apartment and came to live together."