TRANSFER TAXES value of the property transmitted at that time
regardless of its appreciation or depreciation
Taxes imposed upon the gratuitous
disposition of private property.
*Tax is upon transmission or the transfer or
devolution of property of a decedent, made
They are NOT taxes on property NOR effective by his death
capitation tax because their imposition does
not rest upon general ownership but on the *The right of the state to tax vests instantly and
transfer of the property is measured by the value of the state as it stood
at the time of the decedent’s death, regardless
Nature of transfer taxes: of any subsequent contingency affecting value
1. Privilege tax or any subsequent increase or decrease in
-imposed on the act of passing value.
ownership of property and not a direct
tax on the property itself I. Composition of gross estate
2. Excise tax Gross estate shall consist of the value of all
-the object is the shifting of economic property, real or personal, tangible or
benefits and enjoyment of property intangible, wherever situated, of the
from the dead to the living (in the case decedent (except non-resident aliens), to
of estate tax) the extent of the interest of the decedent at
-tax on the privilege of the donor to the time of his death
give or on the transfer of property by
way of gift inter vivos (in the case of Determination of Gross Estate
donor’s tax) a. RC/NRC/RA
All properties, real or personal, tangible or
General Classification of Transfer Taxes intangible, wherever situated, plus items
A. Estate Tax includible in the gross estate
B. Donor’s Tax
b. NRA
Only properties situated in the Philippines
Estate
provided that, intangible personal property
An estate is the totality of the assets and is subject to the rule of reciprocity provided
liabilities which a person holds at the time of his for under Section 104 of the NIRC
demise
II. Specific properties includible:
Estate Tax a. Dividends declared by a corporation
An estate tax is a tax on the right of the before death of stockholder although
deceased person to transmit his estate to his paid after death, if the decedent was
lawful heirs or beneficiaries. It is levied upon living on the record date
the total net value of property of a deceased b. Partnership profits even if paid ager
person. death of partner
c. Proceeds of life insurance policy
Lorenzo v. Posadas payable to a revocable beneficiary
*A transmission by inheritance is taxable at the d. Right of usufruct if transferable to the
time of the predecessor’s death, heirs
notwithstanding the postponement of the
actual possession or enjoyment of the estate by
the beneficiary, and the tax measured by the
III. Valuation rules (Sec 88 NIRC and Sec 5, RR
02-03) B. Non-resident Aliens
1. Expenses, losses, indebtedness, and
a. Real property Taxes or Ordinary Deductions
1. FMV as determined by the 2. Transfer for public use
Commissioner (Zonal Value); OR 3. Vanishing deduction on property in
the Philippines
2. FMW as shown in the schedule of
4. Conjugal share of the surviving
values fixed by the provincial or city
spouse
assessors
Except:
1. Family home
Note: WHICHEVER IS HIGHER
2. Standard deduction
3. Hospitalization expenses
b. Personal property
4. Retirement pay
Rule: FMV as of the time of death
Exception: Shares of Stock V. Rates of estate tax
1. Listed shares
2. Unlisted shares VI. Classification of decedents
c. Right to usufruct, use or habitation, VII. Property/interests not subject to estate
annuity tax
d. If there is an improvement a. The first P200, 000 of the gross estate
b. Retirement benefits of employees of
IV. Deductions from gross estate – private firms from private pension plan
classification approved by the BIR
c. Intangible personal property of non-
A. Citizens and Resident Aliens resident decedent under the Principle
1. Expenses, losses, indebtedness, and of Reciprocity
Taxes or Ordinary Deductions d. Amount received for war damages
a. Funeral expenses e. Amount received from the US Veterans
b. Judicial expenses Administration
c. Claims against the estate f. Proceeds of life insurance and benefits
d. Claims against insolvent received by members of the GSIS and
persons SSS
e. Unpaid mortgages
f. Unpaid taxes VIII. Procedure for settlement of estate
g. Losses A. Filing of Notice of Death
2. Vanishing Deductions 1. When the transfer is subject to tax;
3. Transfers for Public Use or
4. Family Home 2. Although exempt, the gross value of
5. Standard Deduction the estate exceeds P20,000
6. Medical expenses Period to File:
7. Amount received by heirs under RA 2 months after the decedent’s death or
4719 (Retirement Benefits) within a like period after qualifying as
8. Share of surviving spouse in the executor or administrator, the notice
conjugal partnership must be filed with the Commissioner
B. Filing of Estate Tax Return
Period to File:
Estate tax return must be filed within 6
months from the decedent’s death
EXCEPT in meritorious cases where the
Commissioner may grant reasonable
extension not exceeding 30 days
C. Payment of Tax
“Pay-as-you-file System” – the time for
paying the estate tax is at the time the
return is filed EXCEPT when the
commissioner grants an extension of
time
