ESTATE TAX

NIRC NIRC, as amended by TRAIN Law

SEC. 84. Rates of Estate Tax. - There
shall be levied, assessed, collected and
paid upon the transfer of the net estate
as determined in accordance with
Sections 85 and 86 of every decedent,
whether resident or nonresident of the
Philippines, a tax based on the value of
such net estate, as computed in
accordance with the following schedule:
SEC. 84. Rates of Estate Tax. - There
shall be levied, assessed, collected and
paid upon the transfer of the net estate
as determined in accordance with
Sections 85 and 86 of every decedent,
whether resident or nonresident of the
Philippines, a tax at the rate of 6% based
on the value of such net estate.

If the net estate is:

Over But Not The Plus Of

Over Tax Shall the Excess
Be Over
P 200,000 Exempt
P 200,000 500,000 0 5% P 200,000
500,000 2,000,000 P15,000 8% 500,000
2,000,000 5,000,000 135,000 11% 2,000,000
5,000,000 10,000,000 456,000 15% 5,000,000
10,000,000 And Over 1,215,000 20% 10,000,000

SEC. 85. Gross Estate. - the value of
the gross estate of the decedent shall be
determined by including the value at the
time of his death of all property, real or
personal, tangible or intangible,
wherever situated: Provided, however,
that in the case of a nonresident
decedent who at the time of his death
was not a citizen of the Philippines, only
that part of the entire gross estate which
is situated in the Philippines shall be
included in his taxable estate.
(A) Decedent's Interest. - To the extent (A) Decedent's Interest. - To the extent
of the interest therein of the decedent at of the interest therein of the decedent at
the time of his death;
(B) Transfer in Contemplation of
Death. - To the extent of any interest
therein of which the decedent has at any
time made a transfer, by trust or
otherwise, in contemplation of or
intended to take effect in possession or
enjoyment at or after death, or of which
he has at any time made a transfer, by
trust or otherwise, under which he has
retained for his life or for any period
which does not in fact end before his
death (1) the possession or enjoyment
of, or the right to the income from the
property, or (2) the right, either alone or
in conjunction with any person, to
designate the person who shall possess
or enjoy the property or the income
therefrom; except in case of a bona fide
sale for an adequate and full
consideration in money or money's
worth.
SEC. 85. Gross Estate. - the value of
the gross estate of the decedent shall be
determined by including the value at the
time of his death of all property, real or
personal, tangible or intangible,
wherever situated: Provided, however,
that in the case of a nonresident
decedent who at the time of his death
was not a citizen of the Philippines, only
that part of the entire gross estate which
is situated in the Philippines shall be
included in his taxable estate.
the time of his death;
(B) Transfer in Contemplation of
Death. - To the extent of any interest
therein of which the decedent has at any
time made a transfer, by trust or
otherwise, in contemplation of or
intended to take effect in possession or
enjoyment at or after death, or of which
he has at any time made a transfer, by
trust or otherwise, under which he has
retained for his life or for any period
which does not in fact end before his
death (1) the possession or enjoyment
of, or the right to the income from the
property, or (2) the right, either alone or
in conjunction with any person, to
designate the person who shall possess
or enjoy the property or the income
therefrom; except in case of a bona fide
sale for an adequate and full
consideration in money or money's
worth.
(C) Revocable Transfer. -
(1) To the extent of any interest therein,
of which the decedent has at any time
made a transfer (except in case of a bona
fide sale for an adequate and full
consideration in money or money's
worth) by trust or otherwise, where the
enjoyment thereof was subject at the
date of his death to any change through
the exercise of a power (in whatever
capacity exercisable) by the decedent
alone or by the decedent in conjunction
with any other person (without regard to
when or from what source the decedent
acquired such power), to alter, amend,
revoke, or terminate, or where any such
power is relinquished in contemplation
of the decedent's death.
(2) For the purpose of this Subsection,
the power to alter, amend or revoke
shall be considered to exist on the date
of the decedent's death even though the
exercise of the power is subject to a
precedent giving of notice or even
though the alteration, amendment or
revocation takes effect only on the
expiration of a stated period after the
exercise of the power, whether or not on
or before the date of the decedent's
death notice has been given or the
power has been exercised. In such cases,
proper adjustment shall be made
representing the interests which would
have been excluded from the power if
the decedent had lived, and for such
purpose if the notice has not been given
or the power has not been exercised on
or before the date of his death, such
notice shall be considered to have been
given, or the power exercised, on the
date of death.
(D) Property Passing Under General
Power of Appointment. - To the extent
of any property passing under a general
power of appointment exercised by the
decedent: (1) by will, or (2) by deed
executed in contemplation of, or
intended to take effect in possession or
enjoyment at, or after his death, or (3)
by deed under which he has retained for
his life or any period not ascertainable
without reference to his death or for any
period which does not in fact end before
his death (a) the possession or
enjoyment of, or the right to the income
from, the property, or (b) the right,
either alone or in conjunction with any
person, to designate the persons who
shall possess or enjoy the property or
(C) Revocable Transfer. -
(1) To the extent of any interest therein,
of which the decedent has at any time
made a transfer (except in case of a bona
fide sale for an adequate and full
consideration in money or money's
worth) by trust or otherwise, where the
enjoyment thereof was subject at the
date of his death to any change through
the exercise of a power (in whatever
capacity exercisable) by the decedent
alone or by the decedent in conjunction
with any other person (without regard to
when or from what source the decedent
acquired such power), to alter, amend,
revoke, or terminate, or where any such
power is relinquished in contemplation
of the decedent's death.
(2) For the purpose of this Subsection,
the power to alter, amend or revoke
shall be considered to exist on the date
of the decedent's death even though the
exercise of the power is subject to a
precedent giving of notice or even
though the alteration, amendment or
revocation takes effect only on the
expiration of a stated period after the
exercise of the power, whether or not on
or before the date of the decedent's
death notice has been given or the
power has been exercised. In such cases,
proper adjustment shall be made
representing the interests which would
have been excluded from the power if
the decedent had lived, and for such
purpose if the notice has not been given
or the power has not been exercised on
or before the date of his death, such
notice shall be considered to have been
given, or the power exercised, on the
date of death.
(D) Property Passing Under General
Power of Appointment. - To the extent
of any property passing under a general
power of appointment exercised by the
decedent: (1) by will, or (2) by deed
executed in contemplation of, or
intended to take effect in possession or
enjoyment at, or after his death, or (3)
by deed under which he has retained for
his life or any period not ascertainable
without reference to his death or for any
period which does not in fact end before
his death (a) the possession or
enjoyment of, or the right to the income
from, the property, or (b) the right,
either alone or in conjunction with any
person, to designate the persons who
shall possess or enjoy the property or
the income therefrom; except in case of
a bona fide sale for an adequate and full
consideration in money or money's
worth.
(E) Proceeds of Life Insurance. - To
the extent of the amount receivable by
the estate of the deceased, his executor,
or administrator, as insurance under
policies taken out by the decedent upon
his own life, irrespective of whether or
not the insured retained the power of
revocation, or to the extent of the
amount receivable by any beneficiary
designated in the policy of insurance,
except when it is expressly stipulated
that the designation of the beneficiary is
irrevocable.
(F) Prior Interests. - Except as
otherwise specifically provided therein,
Subsections (B), (C) and (E) of this
Section shall apply to the transfers,
trusts, estates, interests, rights, powers
and relinquishment of powers, as
severally enumerated and described
therein, whether made, created, arising,
existing, exercised or relinquished
before or after the effectivity of this
Code.
(G) Transfers for Insufficient
Consideration. - If any one of the
transfers, trusts, interests, rights or
powers enumerated and described in
Subsections (B), (C) and (D) of this
Section is made, created, exercised or
relinquished for a consideration in
money or money's worth, but is not a
bona fide sale for an adequate and full
consideration in money or money's
worth, there shall be included in the
gross estate only the excess of the fair
market value, at the time of death, of the
property otherwise to be included on
account of such transaction, over the
value of the consideration received
therefor by the decedent.
(H) Capital of the Surviving Spouse. -
The capital of the surviving spouse of a
decedent shall not, for the purpose of
this Chapter, be deemed a part of his or
her gross estate.
SEC. 86. Computation of Net Estate. -
For the purpose of the tax imposed in
this Chapter, the value of the net estate
shall be determined:
(A) Deductions Allowed to the Estate (A) Deductions Allowed to the Estate
of Citizen or a Resident. - In the case of Citizen or a Resident. - In the case
the income therefrom; except in case of
a bona fide sale for an adequate and full
consideration in money or money's
worth.
(E) Proceeds of Life Insurance. - To
the extent of the amount receivable by
the estate of the deceased, his executor,
or administrator, as insurance under
policies taken out by the decedent upon
his own life, irrespective of whether or
not the insured retained the power of
revocation, or to the extent of the
amount receivable by any beneficiary
designated in the policy of insurance,
except when it is expressly stipulated
that the designation of the beneficiary is
irrevocable.
(F) Prior Interests. - Except as
otherwise specifically provided therein,
Subsections (B), (C) and (E) of this
Section shall apply to the transfers,
trusts, estates, interests, rights, powers
and relinquishment of powers, as
severally enumerated and described
therein, whether made, created, arising,
existing, exercised or relinquished
before or after the effectivity of this
Code.
(G) Transfers for Insufficient
Consideration. - If any one of the
transfers, trusts, interests, rights or
powers enumerated and described in
Subsections (B), (C) and (D) of this
Section is made, created, exercised or
relinquished for a consideration in
money or money's worth, but is not a
bona fide sale for an adequate and full
consideration in money or money's
worth, there shall be included in the
gross estate only the excess of the fair
market value, at the time of death, of the
property otherwise to be included on
account of such transaction, over the
value of the consideration received
therefor by the decedent.
(H) Capital of the Surviving Spouse. -
The capital of the surviving spouse of a
decedent shall not, for the purpose of
this Chapter, be deemed a part of his or
her gross estate.
SEC. 86. Computation of Net Estate. -
For the purpose of the tax imposed in
this Chapter, the value of the net estate
shall be determined:
of a citizen or resident of the of a citizen or resident of the
Philippines, by deducting from the value Philippines, by deducting from the value
of the gross estate - of the gross estate -

(1) Expenses, Losses, Indebtedness, (1) Standard Deduction. - An amount

and Taxes. - Such amounts - equivalent to P5,000,000.

(a) For actual funeral expenses or in an (2) For claims against the estate:
amount equal to five percent (5%) of the Provided, That at the time the
gross estate, whichever is lower, but in indebtedness was incurred the debt
no case to exceed Two hundred instrument was duly notarized and, if
thousand pesos (P200,000); the loan was contracted within three (3)
years before the death of the decedent,
(b) For judicial expenses of the the administrator or executor shall
testamentary or intestate proceedings; submit a statement showing the
disposition of the proceeds of the loan;
(c) For claims against the estate:
Provided, That at the time the (3) For claims of the deceased against
indebtedness was incurred the debt insolvent persons where the value of
instrument was duly notarized and, if decedent's interest therein is included in
the loan was contracted within three (3) the value of the gross estate; and
years before the death of the decedent,
the administrator or executor shall (4) For unpaid mortgages upon, or
submit a statement showing the any indebtedness in respect to,
disposition of the proceeds of the loan; property where the value of decedent's
interest therein, undiminished by such
(d) For claims of the deceased against mortgage or indebtedness, is included in
insolvent persons where the value of the value of the gross estate, but not
decedent's interest therein is included in including any income tax upon income
the value of the gross estate; and received after the death of the decedent,
or property taxes not accrued before his
(e) For unpaid mortgages upon, or any death, or any estate tax. The deduction
indebtedness in respect to, property herein allowed in the case of claims
where the value of decedent's interest against the estate, unpaid mortgages or
therein, undiminished by such mortgage any indebtedness shall, when founded
or indebtedness, is included in the value upon a promise or agreement, be limited
of the gross estate, but not including any to the extent that they were contracted
income tax upon income received after bona fide and for an adequate and full
the death of the decedent, or property consideration in money or money's
taxes not accrued before his death, or worth. There shall also be deducted
any estate tax. The deduction herein losses incurred during the settlement of
allowed in the case of claims against the the estate arising from fires, storms,
estate, unpaid mortgages or any shipwreck, or other casualties, or from
indebtedness shall, when founded upon robbery, theft or embezzlement, when
a promise or agreement, be limited to such losses are not compensated for by
the extent that they were contracted insurance or otherwise, and if at the time
bona fide and for an adequate and full of the filing of the return such losses
consideration in money or money's have not been claimed as a deduction
worth. There shall also be deducted for the income tax purposes in an
losses incurred during the settlement of income tax return, and provided that
the estate arising from fires, storms, such losses were incurred not later than
shipwreck, or other casualties, or from the last day for the payment of the estate
robbery, theft or embezzlement, when tax as prescribed in Subsection (A) of
such losses are not compensated for by Section 91.
insurance or otherwise, and if at the time
of the filing of the return such losses (5) Property Previously Taxed. - An
have not been claimed as a deduction amount equal to the value specified
for the income tax purposes in an below of any property forming a part of
income tax return, and provided that the gross estate situated in the
such losses were incurred not later than Philippines of any person who died
the last day for the payment of the estate within five (5) years prior to the death of
tax as prescribed in Subsection (A) of the decedent, or transferred to the
Section 91.
(2) Property Previously Taxed. - An
amount equal to the value specified
below of any property forming a part of
the gross estate situated in the
Philippines of any person who died
within five (5) years prior to the death of
the decedent, or transferred to the
decedent by gift within five (5) years
prior to his death, where such property
can be identified as having been
received by the decedent from the donor
by gift, or from such prior decedent by
gift, bequest, devise or inheritance, or
which can be identified as having been
acquired in exchange for property so
received:
One hundred percent (100%) of the
value, if the prior decedent died within
one (1) year prior to the death of the
decedent, or if the property was
transferred to him by gift within the
same period prior to his death;
Eighty percent (80%) of the value, if the
prior decedent died more than one (1)
year but not more than two (2) years
prior to the death of the decedent, or if
the property was transferred to him by
gift within the same period prior to his
death;
Sixty percent (60%) of the value, if the
prior decedent died more than two (2)
years but not more than three (3) years
prior to the death of the decedent, or if
the property was transferred to him by
gift within the same period prior to his
death;
Forty percent (40%) of the value, if the
prior decedent died more than three (3)
years but not more than four (4) years
prior to the death of the decedent, or if
the property was transferred to him by
gift within the same period prior to his
death;
Twenty percent (20%) of the value, if
the prior decedent died more than four
(4) years but not more than five (5)
years prior to the death of the decedent,
or if the property was transferred to him
by gift within the same period prior to
his death;
These deductions shall be allowed only
where a donor's tax or estate tax
imposed under this Title was finally
determined and paid by or on behalf of
decedent by gift within five (5) years
prior to his death, where such property
can be identified as having been
received by the decedent from the donor
by gift, or from such prior decedent by
gift, bequest, devise or inheritance, or
which can be identified as having been
acquired in exchange for property so
received:
One hundred percent (100%) of the
value, if the prior decedent died within
one (1) year prior to the death of the
decedent, or if the property was
transferred to him by gift within the
same period prior to his death;
Eighty percent (80%) of the value, if the
prior decedent died more than one (1)
year but not more than two (2) years
prior to the death of the decedent, or if
the property was transferred to him by
gift within the same period prior to his
death;
Sixty percent (60%) of the value, if the
prior decedent died more than two (2)
years but not more than three (3) years
prior to the death of the decedent, or if
the property was transferred to him by
gift within the same period prior to his
death;
Forty percent (40%) of the value, if the
prior decedent died more than three (3)
years but not more than four (4) years
prior to the death of the decedent, or if
the property was transferred to him by
gift within the same period prior to his
death;
Twenty percent (20%) of the value, if
the prior decedent died more than four
(4) years but not more than five (5)
years prior to the death of the decedent,
or if the property was transferred to him
by gift within the same period prior to
his death;
These deductions shall be allowed only
where a donor's tax or estate tax
imposed under this Title was finally
determined and paid by or on behalf of
such donor, or the estate of such prior
decedent, as the case may be, and only
in the amount finally determined as the
value of such property in determining
the value of the gift, or the gross estate
of such prior decedent, and only to the
extent that the value of such property is
included in the decedent's gross estate,
and only if in determining the value of
such donor, or the estate of such prior
decedent, as the case may be, and only
in the amount finally determined as the
value of such property in determining
the value of the gift, or the gross estate
of such prior decedent, and only to the
extent that the value of such property is
included in the decedent's gross estate,
and only if in determining the value of
the estate of the prior decedent, no
deduction was allowable under
paragraph (2) in respect of the property
or properties given in exchange therefor.
Where a deduction was allowed of any
mortgage or other lien in determining
the donor's tax, or the estate tax of the
prior decedent, which was paid in whole
or in part prior to the decedent's death,
then the deduction allowable under said
Subsection shall be reduced by the
amount so paid. Such deduction
allowable shall be reduced by an amount
which bears the same ratio to the
amounts allowed as deductions under
paragraphs (1) and (3) of this Subsection
as the amount otherwise deductible
under said paragraph (2) bears to the
value of the decedent's estate. Where the
property referred to consists of two or
more items, the aggregate value of such
items shall be used for the purpose of
computing the deduction.
(3) Transfers for Public Use. - The
amount of all the bequests, legacies,
devises or transfers to or for the use of
the Government of the Republic of the
Philippines, or any political subdivision
thereof, for exclusively public purposes.
(4) The Family Home. - An amount
equivalent to the current fair market
value of the decedent's family home:
Provided, however, That if the said
current fair market value exceeds One
million pesos (P1, 000,000), the excess
shall be subject to estate tax. As a sine
qua non condition for the exemption or
deduction, said family home must have
been the decedent's family home as
certified by the barangay captain of the
locality.
(5) Standard Deduction. - An amount
equivalent to One million pesos (P1,
000,000).
(6) Medical Expenses. - Medical
Expenses incurred by the decedent
within one (1) year prior to his death
which shall be duly substantiated with
receipts: Provided, That in no case shall
the estate of the prior decedent, no
deduction was allowable under
paragraph (5) in respect of the property
or properties given in exchange therefor.
Where a deduction was allowed of any
mortgage or other lien in determining
the donor's tax, or the estate tax of the
prior decedent, which was paid in whole
or in part prior to the decedent's death,
then the deduction allowable under said
Subsection shall be reduced by the
amount so paid. Such deduction
allowable shall be reduced by an amount
which bears the same ratio to the
amounts allowed as deductions under
paragraphs (2), (3), (4), and (6) of this
Subsection as the amount otherwise
deductible under said paragraph (5)
bears to the value of the decedent's
estate. Where the property referred to
consists of two or more items, the
aggregate value of such items shall be
used for the purpose of computing the
deduction.
(6) Transfers for Public Use. - The
amount of all the bequests, legacies,
devises or transfers to or for the use of
the Government of the Republic of the
Philippines, or any political subdivision
thereof, for exclusively public purposes.
(7) The Family Home. - An amount
equivalent to the current fair market
value of the decedent's family home:
Provided, however, That if the said
current fair market value exceeds P10,
000,000, the excess shall be subject to
estate tax.
(8) Amount Received by Heirs Under
Republic Act No. 4917. - Any amount
received by the heirs from the decedent
- employee as a consequence of the
death of the decedent-employee in
accordance with Republic Act No. 4917:
Provided, That such amount is included
in the gross estate of the decedent.
the deductible medical expenses exceed
Five Hundred Thousand Pesos (P500,
000).

(7) Amount Received by Heirs Under

Republic Act No. 4917. - Any amount
received by the heirs from the decedent
- employee as a consequence of the
death of the decedent-employee in
accordance with Republic Act No. 4917:
Provided, That such amount is included
in the gross estate of the decedent.
(B) Deductions Allowed to
(B) Deductions Allowed to Nonresident Estates. - In the case of a
Nonresident Estates. - In the case of a nonresident not a citizen of the
nonresident not a citizen of the Philippines, by deducting from the value
Philippines, by deducting from the value of that part of his gross estate which at
of that part of his gross estate which at the time of his death is situated in the
the time of his death is situated in the Philippines:
Philippines:
(1) Standard Deduction. - An amount
(1) Expenses, Losses, Indebtedness equivalent to P500,000.
and Taxes. - That proportion of the
deductions specified in paragraph (1) of (2) Expenses, Losses, Indebtedness
Subsection (A) of this Section which the and Taxes. - That portion of the
value of such part bears to the value of deductions specified in paragraphs (2),
his entire gross estate wherever situated; (3), and (4) of Subsection (A) of this
Section which the value of such part
(2) Property Previously Taxed. - An bears to the value of his entire gross
amount equal to the value specified estate wherever situated;
below of any property forming part of
the gross estate situated in the (3) Property Previously Taxed. - An
Philippines of any person who died amount equal to the value specified
within five (5) years prior to the death of below of any property forming part of
the decedent, or transferred to the the gross estate situated in the
decedent by gift within five (5) years Philippines of any person who died
prior to his death, where such property within five (5) years prior to the death of
can be identified as having been the decedent, or transferred to the
received by the decedent from the donor decedent by gift within five (5) years
by gift, or from such prior decedent by prior to his death, where such property
gift, bequest, devise or inheritance, or can be identified as having been
which can be identified as having been received by the decedent from the donor
acquired in exchange for property so by gift, or from such prior decedent by
received: gift, bequest, devise or inheritance, or
which can be identified as having been
One hundred percent (100%) of the acquired in exchange for property so
value if the prior decedent died within received:
one (1) year prior to the death of the
decedent, or if the property was One hundred percent (100%) of the
transferred to him by gift, within the value if the prior decedent died within
same period prior to his death; one (1) year prior to the death of the
decedent, or if the property was
Eighty percent (80%) of the value, if the transferred to him by gift, within the
prior decedent died more than one (1) same period prior to his death;
year but not more than two (2) years
prior to the death of the decedent, or if Eighty percent (80%) of the value, if the
the property was transferred to him by prior decedent died more than one (1)
gift within the same period prior to his year but not more than two (2) years
death; prior to the death of the decedent, or if
the property was transferred to him by
Sixty percent (60%) of the value, if the gift within the same period prior to his
prior decedent died more than two (2)
years but not more than three (3) years death;
prior to the death of the decedent, or if
the property was transferred to him by Sixty percent (60%) of the value, if the
gift within the same period prior to his prior decedent died more than two (2)
death; years but not more than three (3) years
prior to the death of the decedent, or if
Forty percent (40%) of the value, if the the property was transferred to him by
prior decedent died more than three (3) gift within the same period prior to his
years but not more than four (4) years death;
prior to the death of the decedent, or if
the property was transferred to him by Forty percent (40%) of the value, if the
gift within the same period prior to his prior decedent died more than three (3)
death; and years but not more than four (4) years
prior to the death of the decedent, or if
Twenty percent (20%) of the value, if the property was transferred to him by
the prior decedent died more than four gift within the same period prior to his
(4) years but not more than five (5) death; and
years prior to the death of the decedent,
or if the property was transferred to him Twenty percent (20%) of the value, if
by gift within the same period prior to the prior decedent died more than four
his death. (4) years but not more than five (5)
years prior to the death of the decedent,
These deductions shall be allowed only or if the property was transferred to him
where a donor's tax, or estate tax by gift within the same period prior to
imposed under this Title is finally his death.
determined and paid by or on behalf of
such donor, or the estate of such prior These deductions shall be allowed only
decedent, as the case may be, and only where a donor's tax, or estate tax
in the amount finally determined as the imposed under this Title is finally
value of such property in determining determined and paid by or on behalf of
the value of the gift, or the gross estate such donor, or the estate of such prior
of such prior decedent, and only to the decedent, as the case may be, and only
extent that the value of such property is in the amount finally determined as the
included in that part of the decedent's value of such property in determining
gross estate which at the time of his the value of the gift, or the gross estate
death is situated in the Philippines; and of such prior decedent, and only to the
only if, in determining the value of the extent that the value of such property is
net estate of the prior decedent, no included in that part of the decedent's
deduction is allowable under paragraph gross estate which at the time of his
(2) of Subsection (B) of this Section, in death is situated in the Philippines; and
respect of the property or properties only if, in determining the value of the
given in exchange therefore. Where a net estate of the prior decedent, no
deduction was allowed of any mortgage deduction is allowable under paragraph
or other lien in determining the donor's (2) of Subsection (B) of this Section, in
tax, or the estate tax of the prior respect of the property or properties
decedent, which was paid in whole or in given in exchange therefore. Where a
part prior to the decedent's death, then deduction was allowed of any mortgage
the deduction allowable under said or other lien in determining the donor's
paragraph shall be reduced by the tax, or the estate tax of the prior
amount so paid. Such deduction decedent, which was paid in whole or in
allowable shall be reduced by an amount part prior to the decedent's death, then
which bears the same ratio to the the deduction allowable under said
amounts allowed as deductions under paragraph shall be reduced by the
paragraphs (1) and (3) of this Subsection amount so paid. Such deduction
as the amount otherwise deductible allowable shall be reduced by an amount
under paragraph (2) bears to the value of which bears the same ratio to the
that part of the decedent's gross estate amounts allowed as deductions under
which at the time of his death is situated paragraphs (1) and (3) of this Subsection
in the Philippines. Where the property as the amount otherwise deductible
referred to consists of two (2) or more under paragraph (2) bears to the value of
items, the aggregate value of such items that part of the decedent's gross estate
shall be used for the purpose of which at the time of his death is situated
computing the deduction. in the Philippines. Where the property
referred to consists of two (2) or more
(3) Transfers for Public Use. - The items, the aggregate value of such items
amount of all bequests, legacies, devises shall be used for the purpose of
or transfers to or for the use of the computing the deduction.
Government of the Republic of the
Philippines or any political subdivision (4) Transfers for Public Use. - The
thereof, for exclusively public purposes. amount of all bequests, legacies, devises
or transfers to or for the use of the
Government of the Republic of the
Philippines or any political subdivision
thereof, for exclusively public purposes.

(C) Share in the Conjugal Property. -
the net share of the surviving spouse in
the conjugal partnership property as
diminished by the obligations properly
chargeable to such property shall, for
the purpose of this Section, be deducted
from the net estate of the decedent.
(C) Share in the Conjugal Property. -
the net share of the surviving spouse in
the conjugal partnership property as
diminished by the obligations properly
chargeable to such property shall, for
the purpose of this Section, be deducted
from the net estate of the decedent.

(D) Miscellaneous Provisions. - No

deduction shall be allowed in the case of
a nonresident not a citizen of the
Philippines, unless the executor,
administrator, or anyone of the heirs, as
the case may be, includes in the return
required to be filed under Section 90 the
value at the time of his death of that part
of the gross estate of the nonresident not
situated in the Philippines.

(E) Tax Credit for Estate Taxes paid

to a Foreign Country. - (D) Tax Credit for Estate Taxes paid
to a Foreign Country. -
(1) In General. - The tax imposed by
this Title shall be credited with the (1) In General. - The tax imposed by
amounts of any estate tax imposed by this Title shall be credited with the
the authority of a foreign country. amounts of any estate tax imposed by
the authority of a foreign country.
(2) Limitations on Credit. - The
amount of the credit taken under this (2) Limitations on Credit. - The
Section shall be subject to each of the amount of the credit taken under this
following limitations: Section shall be subject to each of the
following limitations:
(a) The amount of the credit in respect
to the tax paid to any country shall not (a) The amount of the credit in respect
exceed the same proportion of the tax to the tax paid to any country shall not
against which such credit is taken, exceed the same proportion of the tax
which the decedent's net estate situated against which such credit is taken,
within such country taxable under this which the decedent's net estate situated
Title bears to his entire net estate; and within such country taxable under this
Title bears to his entire net estate; and
(b) The total amount of the credit shall
not exceed the same proportion of the (b) The total amount of the credit shall
tax against which such credit is taken, not exceed the same proportion of the
which the decedent's net estate situated tax against which such credit is taken,
outside the Philippines taxable under which the decedent's net estate situated
this Title bears to his entire net estate. outside the Philippines taxable under
this Title bears to his entire net estate.
SEC. 87 Exemption of Certain
Acquisitions and Transmissions. - The SEC. 87 Exemption of Certain
following shall not be taxed: Acquisitions and Transmissions. - The
following shall not be taxed:
(A) The merger of usufruct in the owner
of the naked title; (A) The merger of usufruct in the owner
of the naked title;
(B) The transmission or delivery of the
inheritance or legacy by the fiduciary (B) The transmission or delivery of the
heir or legatee to the fideicommissary; inheritance or legacy by the fiduciary
heir or legatee to the fideicommissary;
(C) The transmission from the first heir,
legatee or donee in favor of another (C) The transmission from the first heir,
beneficiary, in accordance with the legatee or donee in favor of another
desire of the predecessor; and beneficiary, in accordance with the
desire of the predecessor; and
(D) All bequests, devises, legacies or
transfers to social welfare, cultural and (D) All bequests, devises, legacies or
charitable institutions, no part of the net transfers to social welfare, cultural and
income of which inures to the benefit of charitable institutions, no part of the net
any individual: Provided, however, That income of which inures to the benefit of
not more than thirty percent (30%) of any individual: Provided, however, That
the said bequests, devises, legacies or not more than thirty percent (30%) of
transfers shall be used by such the said bequests, devises, legacies or
institutions for administration purposes. transfers shall be used by such
institutions for administration purposes.

SEC. 88. Determination of the Value

SEC. 88. Determination of the Value of the Estate. -
of the Estate. -
(A) Usufruct. - To determine the value
(A) Usufruct. - To determine the value of the right of usufruct, use or
of the right of usufruct, use or habitation, as well as that of annuity,
habitation, as well as that of annuity, there shall be taken into account the
there shall be taken into account the probable life of the beneficiary in
probable life of the beneficiary in accordance with the latest Basic
accordance with the latest Basic Standard Mortality Table, to be
Standard Mortality Table, to be approved by the Secretary of Finance,
approved by the Secretary of Finance, upon recommendation of the Insurance
upon recommendation of the Insurance Commissioner.
Commissioner.
(B) Properties. - The estate shall be
(B) Properties. - The estate shall be appraised at its fair market value as of
appraised at its fair market value as of the time of death. However, the
the time of death. However, the appraised value of real property as of
appraised value of real property as of the time of death shall be, whichever is
the time of death shall be, whichever is higher of -
higher of -
(1) The fair market value as determined
(1) The fair market value as determined by the Commissioner; or
by the Commissioner; or
(2) The fair market value as shown in
(2) The fair market value as shown in the schedule of values fixed by the
the schedule of values fixed by the Provincial and City Assessors.
Provincial and City Assessors.
SEC. 89. Notice of Death to be Filed. –
SEC. 89. Notice of Death to be Filed. -
In all cases of transfers subject to tax, or
where, though exempt from tax, the
gross value of the estate exceeds Twenty
thousand pesos (P20,000),the executor,
administrator or any of the legal heirs,
as the case may be, within two (2)
months after the decedent's death, or
within a like period after qualifying as
such executor or administrator, shall
give a written notice thereof to the
Commissioner.
SEC. 90. Estate Tax Returns. -
SEC. 90. Estate Tax Returns. -
(A) Requirements. - In all cases of
(A) Requirements. - In all cases of transfers subject to the tax imposed
transfers subject to the tax imposed herein, or regardless of the gross value
herein, or where, though exempt from of the estate, where the said estate
tax, the gross value of the estate exceeds consists of registered or registrable
Two hundred thousand pesos property such as real property, motor
(P200,000), or regardless of the gross vehicle, shares of stock or other similar
value of the estate, where the said estate property for which a clearance from the
consists of registered or registrable Bureau of Internal Revenue is required
property such as real property, motor as a condition precedent for the transfer
vehicle, shares of stock or other similar of ownership thereof in the name of the
property for which a clearance from the transferee, the executor, or the
Bureau of Internal Revenue is required administrator, or any of the legal heirs,
as a condition precedent for the transfer as the case may be, shall file a return
of ownership thereof in the name of the under oath in duplicate, setting forth:
transferee, the executor, or the
administrator, or any of the legal heirs, (1) The value of the gross estate of the
as the case may be, shall file a return decedent at the time of his death, or in
under oath in duplicate, setting forth: case of a nonresident, not a citizen of
the Philippines, of that part of his gross
(1) The value of the gross estate of the estate situated in the Philippines;
decedent at the time of his death, or in
case of a nonresident, not a citizen of (2) The deductions allowed from gross
the Philippines, of that part of his gross estate in determining the estate as
estate situated in the Philippines; defined in Section 86; and

(2) The deductions allowed from gross (3) Such part of such information as
estate in determining the estate as may at the time be ascertainable and
defined in Section 86; and such supplemental data as may be
necessary to establish the correct taxes.
(3) Such part of such information as
may at the time be ascertainable and Provided, however, That estate tax
such supplemental data as may be returns showing a gross value exceeding
necessary to establish the correct taxes. P5,000,000 shall be supported with a
statement duly certified to by a Certified
Provided, however, That estate tax Public Accountant containing the
returns showing a gross value exceeding following:
Two million pesos (P2, 000,000) shall
be supported with a statement duly (a) Itemized assets of the decedent with
certified to by a Certified Public their corresponding gross value at the
Accountant containing the following: time of his death, or in the case of a
nonresident, not a citizen of the
(a) Itemized assets of the decedent with Philippines, of that part of his gross
their corresponding gross value at the estate situated in the Philippines;
time of his death, or in the case of a
nonresident, not a citizen of the (b) Itemized deductions from gross
Philippines, of that part of his gross estate allowed in Section 86; and
estate situated in the Philippines;
(c) The amount of tax due whether paid
(b) Itemized deductions from gross or still due and outstanding.
estate allowed in Section 86; and

(c) The amount of tax due whether paid

or still due and outstanding.

(B) Time for Filing. - For the purpose (B) Time for Filing. - For the purpose
of determining the estate tax provided
for in Section 84 of this Code, the estate
tax return required under the preceding
Subsection (A) shall be filed within six
(6) months from the decedent's death.
A certified copy of the schedule of
partition and the order of the court
approving the same shall be furnished
the Commissioner within thirty (30)
days after the promulgation of such
order.
(C) Extension of Time. - The
Commissioner shall have authority to
grant, in meritorious cases, a reasonable
extension not exceeding thirty (30) days
for filing the return.
(D) Place of Filing. - Except in cases
where the Commissioner otherwise
permits, the return required under
Subsection (A) shall be filed with an
authorized agent bank, or Revenue
District Officer, Collection Officer, or
duly authorized Treasurer of the city or
municipality in which the decedent was
domiciled at the time of his death or if
there be no legal residence in the
Philippines, with the Office of the
Commissioner.
SEC. 91. Payment of Tax. -
(A) Time of Payment. - The estate tax
imposed by Section 84 shall be paid at
the time the return is filed by the
executor, administrator or the heirs.
(B) Extension of Time. - When the
Commissioner finds that the payment on
the due date of the estate tax or of any
part thereof would impose undue
hardship upon the estate or any of the
heirs, he may extend the time for
payment of such tax or any part thereof
not to exceed five (5) years, in case the
estate is settled through the courts, or
two (2) years in case the estate is settled
extrajudicially.
In such case, the amount in respect of
which the extension is granted shall be
paid on or before the date of the
expiration of the period of the extension,
and the running of the Statute of
Limitations for assessment as provided
in Section 203 of this Code shall be
suspended for the period of any such
extension.
Where the taxes are assessed by reason Where the taxes are assessed by reason
of determining the estate tax provided
for in Section 84 of this Code, the estate
tax return required under the preceding
Subsection (A) shall be filed within 1
year from the decedent's death.
A certified copy of the schedule of
partition and the order of the court
approving the same shall be furnished
the Commissioner within thirty (30)
days after the promulgation of such
order.
(C) Extension of Time. - The
Commissioner shall have authority to
grant, in meritorious cases, a reasonable
extension not exceeding thirty (30) days
for filing the return.
(D) Place of Filing. - Except in cases
where the Commissioner otherwise
permits, the return required under
Subsection (A) shall be filed with an
authorized agent bank, or Revenue
District Officer, Collection Officer, or
duly authorized Treasurer of the city or
municipality in which the decedent was
domiciled at the time of his death or if
there be no legal residence in the
Philippines, with the Office of the
Commissioner.
SEC. 91. Payment of Tax. -
(A) Time of Payment. - The estate tax
imposed by Section 84 shall be paid at
the time the return is filed by the
executor, administrator or the heirs.
(B) Extension of Time. - When the
Commissioner finds that the payment on
the due date of the estate tax or of any
part thereof would impose undue
hardship upon the estate or any of the
heirs, he may extend the time for
payment of such tax or any part thereof
not to exceed five (5) years, in case the
estate is settled through the courts, or
two (2) years in case the estate is settled
extrajudicially.
In such case, the amount in respect of
which the extension is granted shall be
paid on or before the date of the
expiration of the period of the extension,
and the running of the Statute of
Limitations for assessment as provided
in Section 203 of this Code shall be
suspended for the period of any such
extension.
of negligence, intentional disregard of
rules and regulations, or fraud on the
part of the taxpayer, no extension will
be granted by the Commissioner.
If an extension is granted, the
Commissioner may require the executor,
or administrator, or beneficiary, as the
case may be, to furnish a bond in such
amount, not exceeding double the
amount of the tax and with such sureties
as the Commissioner deems necessary,
conditioned upon the payment of the
said tax in accordance with the terms of
the extension.
(C) Liability for Payment. - The estate
tax imposed by Section 84 shall be paid
by the executor or administrator before
delivery to any beneficiary of his
distributive share of the estate. Such
beneficiary shall to the extent of his
distributive share of the estate, be
subsidiarily liable for the payment of
such portion of the estate tax as his
distributive share bears to the value of
the total net estate.
For the purpose of this Chapter, the term
'executor' or 'administrator' means the
executor or administrator of the
decedent, or if there is no executor or
administrator appointed, qualified, and
acting within the Philippines, then any
person in actual or constructive
possession of any property of the
decedent.
SEC. 92. Discharge of Executor or
Administrator from Personal
Liability. - If the executor or
administrator makes a written
application to the Commissioner for
determination of the amount of the
estate tax and discharge from personal
liability therefore, the Commissioner (as
soon as possible, and in any event
within one (1) year after the making of
such application, or if the application is
made before the return is filed, then
within one (1) year after the return is
filed, but not after the expiration of the
period prescribed for the assessment of
the tax in Section 203 shall not notify
of negligence, intentional disregard of
rules and regulations, or fraud on the
part of the taxpayer, no extension will
be granted by the Commissioner.
If an extension is granted, the
Commissioner may require the executor,
or administrator, or beneficiary, as the
case may be, to furnish a bond in such
amount, not exceeding double the
amount of the tax and with such sureties
as the Commissioner deems necessary,
conditioned upon the payment of the
said tax in accordance with the terms of
the extension.
(C) Payment by Installment. – In case
the available cash of the estate is
insufficient to pay the total estate tax
due, payment by installment shall be
allowed within 2 years from the
statutory date for its payment without
civil penalty and interest.
(D) Liability for Payment. - The estate
tax imposed by Section 84 shall be paid
by the executor or administrator before
delivery to any beneficiary of his
distributive share of the estate. Such
beneficiary shall to the extent of his
distributive share of the estate, be
subsidiarily liable for the payment of
such portion of the estate tax as his
distributive share bears to the value of
the total net estate.
For the purpose of this Chapter, the term
'executor' or 'administrator' means the
executor or administrator of the
decedent, or if there is no executor or
administrator appointed, qualified, and
acting within the Philippines, then any
person in actual or constructive
possession of any property of the
decedent.
SEC. 92. Discharge of Executor or
Administrator from Personal
Liability. - If the executor or
administrator makes a written
application to the Commissioner for
determination of the amount of the
estate tax and discharge from personal
liability therefore, the Commissioner (as
soon as possible, and in any event
within one (1) year after the making of
such application, or if the application is
made before the return is filed, then
within one (1) year after the return is
filed, but not after the expiration of the
period prescribed for the assessment of
the tax in Section 203 shall not notify
the executor or administrator of the
amount of the tax. The executor or
administrator, upon payment of the
amount of which he is notified, shall be
discharged from personal liability for
any deficiency in the tax thereafter
found to be due and shall be entitled to a
receipt or writing showing such
discharge.
SEC. 93. Definition of Deficiency. - As SEC. 93. Definition of Deficiency. - As
used in this Chapter, the term used in this Chapter, the term
'deficiency' means: 'deficiency' means:
(a) The amount by which the tax
imposed by this Chapter exceeds the
amount shown as the tax by the
executor, administrator or any of the
heirs upon his return; but the amounts so
shown on the return shall first be
increased by the amounts previously
assessed (or collected without
assessment) as a deficiency and
decreased by the amount previously
abated, refunded or otherwise repaid in
respect of such tax; or
(b) If no amount is shown as the tax by
the executor, administrator or any of the
heirs upon his return, or if no return is
made by the executor, administrator, or
any heir, then the amount by which the
tax exceeds the amounts previously
assessed (or collected without
assessment) as a deficiency; but such
amounts previously assessed or
collected without assessment shall first
be decreased by the amounts previously
abated, refunded or otherwise repaid in
respect of such tax.
SEC. 94. Payment before Delivery by
Executor or Administrator. - No judge
shall authorize the executor or judicial
administrator to deliver a distributive
share to any party interested in the estate
unless a certification from the
Commissioner that the estate tax has
been paid is shown.
SEC. 95. Duties of Certain Officers
and Debtors. - Registers of Deeds shall
not register in the Registry of Property
any document transferring real property
or real rights therein or any chattel
mortgage, by way of gifts inter vivos or
mortis causa, legacy or inheritance,
unless a certification from the
Commissioner that the tax fixed in this
Title and actually due thereon had been
paid is show, and they shall immediately
notify the Commissioner, Regional
the executor or administrator of the
amount of the tax. The executor or
administrator, upon payment of the
amount of which he is notified, shall be
discharged from personal liability for
any deficiency in the tax thereafter
found to be due and shall be entitled to a
receipt or writing showing such
discharge.
(a) The amount by which the tax
imposed by this Chapter exceeds the
amount shown as the tax by the
executor, administrator or any of the
heirs upon his return; but the amounts so
shown on the return shall first be
increased by the amounts previously
assessed (or collected without
assessment) as a deficiency and
decreased by the amount previously
abated, refunded or otherwise repaid in
respect of such tax; or
(b) If no amount is shown as the tax by
the executor, administrator or any of the
heirs upon his return, or if no return is
made by the executor, administrator, or
any heir, then the amount by which the
tax exceeds the amounts previously
assessed (or collected without
assessment) as a deficiency; but such
amounts previously assessed or
collected without assessment shall first
be decreased by the amounts previously
abated, refunded or otherwise repaid in
respect of such tax.
SEC. 94. Payment before Delivery by
Executor or Administrator. - No judge
shall authorize the executor or judicial
administrator to deliver a distributive
share to any party interested in the estate
unless a certification from the
Commissioner that the estate tax has
been paid is shown.
SEC. 95. Duties of Certain Officers
and Debtors. - Registers of Deeds shall
not register in the Registry of Property
any document transferring real property
or real rights therein or any chattel
mortgage, by way of gifts inter vivos or
mortis causa, legacy or inheritance,
unless a certification from the
Commissioner that the tax fixed in this
Title and actually due thereon had been
paid is show, and they shall immediately
notify the Commissioner, Regional
Director, Revenue District Officer, or
Revenue Collection Officer or Treasurer
of the city or municipality where their
offices are located, of the nonpayment
of the tax discovered by them. Any
lawyer, notary public, or any
government officer who, by reason of
his official duties, intervenes in the
preparation or acknowledgment of
documents regarding partition or
disposal of donation inter vivos or
mortis causa, legacy or inheritance, shall
have the duty of furnishing the
Commissioner, Regional Director,
Revenue District Officer or Revenue
Collection Officer of the place where he
may have his principal office, with
copies of such documents and any
information whatsoever which may
facilitate the collection of the
aforementioned tax. Neither shall a
debtor of the deceased pay his debts to
the heirs, legatee, executor or
administrator of his creditor, unless the
certification of the Commissioner that
the tax fixed in this Chapter had been
paid is shown; but he may pay the
executor or judicial administrator
without said certification if the credit is
included in the inventory of the estate of
the deceased.
SEC. 96. Restitution of Tax Upon
Satisfaction of Outstanding
Obligations. - If after the payment of
the estate tax, new obligations of the
decedent shall appear, and the persons
interested shall have satisfied them by
order of the court, they shall have a right
to the restitution of the proportional part
of the tax paid.
SEC. 97. Payment of Tax Antecedent
to the Transfer of Shares, Bonds or
Rights. - There shall not be transferred
to any new owner in the books of any
corporation, sociedad anonima,
partnership, business, or industry
organized or established in the
Philippines any share, obligation, bond
or right by way of gift inter vivos or
mortis causa, legacy or inheritance,
unless a certification from the
Commissioner that the taxes fixed in
this Title and due thereon have been
paid is shown.
If a bank has knowledge of the death of
a person, who maintained a bank deposit
account alone, or jointly with another, it
shall not allow any withdrawal from the
said deposit account, unless the
Director, Revenue District Officer, or
Revenue Collection Officer or Treasurer
of the city or municipality where their
offices are located, of the nonpayment
of the tax discovered by them. Any
lawyer, notary public, or any
government officer who, by reason of
his official duties, intervenes in the
preparation or acknowledgment of
documents regarding partition or
disposal of donation inter vivos or
mortis causa, legacy or inheritance, shall
have the duty of furnishing the
Commissioner, Regional Director,
Revenue District Officer or Revenue
Collection Officer of the place where he
may have his principal office, with
copies of such documents and any
information whatsoever which may
facilitate the collection of the
aforementioned tax. Neither shall a
debtor of the deceased pay his debts to
the heirs, legatee, executor or
administrator of his creditor, unless the
certification of the Commissioner that
the tax fixed in this Chapter had been
paid is shown; but he may pay the
executor or judicial administrator
without said certification if the credit is
included in the inventory of the estate of
the deceased.
SEC. 96. Restitution of Tax Upon
Satisfaction of Outstanding
Obligations. - If after the payment of
the estate tax, new obligations of the
decedent shall appear, and the persons
interested shall have satisfied them by
order of the court, they shall have a right
to the restitution of the proportional part
of the tax paid.
SEC. 97. Payment of Tax Antecedent
to the Transfer of Shares, Bonds or
Rights. - There shall not be transferred
to any new owner in the books of any
corporation, sociedad anonima,
partnership, business, or industry
organized or established in the
Philippines any share, obligation, bond
or right by way of gift inter vivos or
mortis causa, legacy or inheritance,
unless a certification from the
Commissioner that the taxes fixed in
this Title and due thereon have been
paid is shown.
If a bank has knowledge of the death of
a person, who maintained a bank deposit
account alone, or jointly with another, it
shall allow any withdrawal from the said
deposit account, subject to a final
Commissioner has certified that the withholding tax of 6%. For this purpose,
taxes imposed thereon by this Title have all withdrawal slips shall contain a
been paid: Provided, however, That the statement to the effect that all of the
administrator of the estate or any one (1) joint depositors are still living at the
of the heirs of the decedent may, upon time of withdrawal by any one of the
authorization by the Commissioner, joint depositors and such statement shall
withdraw an amount not exceeding be under oath by the said depositors.
Twenty thousand pesos (P20,000)
without the said certification. For this
purpose, all withdrawal slips shall
contain a statement to the effect that all
of the joint depositors are still living at
the time of withdrawal by any one of the
joint depositors and such statement shall
be under oath by the said depositors.