SEC.

84 - 6% based on value of such NET estate

SEC. 85 - VALUE OF GROSS ESTATE = value at the time of his death of all property, real or
personal, tangible or intangible (only situated in the PH)
a) Decedent’s interest - extent of the interest at the time of his death
b) Transfer in contemplation of death - 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
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
2) 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
d) Property passing under general power of appointment - by will, by deed executed in
contemplation, or by deed under which he has retained for his life or any period not
ascertainable without reference to his death
e) Proceeds of life insurance - 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
g) Transfers for insufficient consideration - If any subsections mentioned in F 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
h) Capital of the surviving spouse - shall not be deemed a part of his or her gross estate

SEC. 86 - Computation of Net Estate

a) Deductions Allowed to the Estate of Citizen or a Resident

 1. Standard Deduction - P5,000,000
2. For claims against the estate - at the time of indebtedness was incurred that debt
instrument was duly notarized and, if the loan was contracted within three (3)
years before the death of the decedent, the administrator or executor shall
submit a statement showing the disposition of the proceeds of the loan.
3. For claims of the deceased against the insolvent persons - interest is included in
the value of the gross estate
4. For unpaid mortgages - undiminished by such mortgage or indebtedness, is
included in the value of the gross estate, but not including any income tax upon
income received after the death of the decedent, or property taxes not accrued
before his death, or any estate tax; deduction herein allowed in the case of
claims against the estate, unpaid mortgages or any indebtedness shall, when
founded upon a promise or agreement, be limited to the extent that they were
contracted bona fide and for an adequate and full consideration in money or
money’s worth; shall also de deducted losses incurred during the settlement of
the estate arising from fires, storms, shipwreck, or other casualties, or from
robbery, theft, or embezzlement, when such losses are not compensated for by
insurance
5. Property previously taxed - amount equal to the value specified below of any
property forming 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:
● 100% of the value if within 1 year prior to the death or if the
property was transferred to him by gift, within the same period
prior to his death
● 80% of the value if decedent died more than 1 year but no more
than 2 years or if the…..death
● 60% of the value if decedent died more than 2 years but no more
than 3 years or if the….death
● 40% of the value if decedent died more than 3 years but not more
than 4 years or if the….death
● 20% of the value if decedent died more than 4 years but not more
than 5 years or if the….death
-only allowed where the title was finally determined and paid 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 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 (5) in respect of the property or
properties given in exchange therefor.

6. Transfers for public use - for exclusively public purposes

7. The family home - current FMV, that if the said current FMV exceeds P10 million,
excess shall be subject to estate tax
 8. Amount received by heirs under R.A. No. 4917 - included in the gross estate of
the decedent

b) Deductions Allowed to Nonresident Estates:

1. Standard deduction - P500,000

2. The proportion of the deductions specified in paragraphs (2), (3), (4) of Subsection (A)
3. Property previously taxed (same with resident)
4. Transfers for Public Use

c) Share in the conjugal property - net share of the surviving spouse shall be deducted from the
net estate of the decedent

d) Tax credit for estate taxes paid to a foreign country

1. In general - shall be credited with the amounts of any estate tax imposed by the authority
of a foreign country
2. Limitations on credit - amount of the credit in respect to the tax paid to any country shall
not exceed the same proportion of the tax against which such credit is taken and the
total amount of the credit shall not exceed the same proportion of the tax against which
such credit is taken

SEC. 87 - Exemption of Certain Acquisitions and Transmissions

a) Merger of usufruct in the owner of a naked title

b) Transmission or delivery of the inheritance or legacy by heir or legatee to the
fideicommissary
c) Transmission from the first heir, legatee, or donee in favor of another beneficiary
d) All bequests, devises, legacies or transfers to social welfare, cultural and charitable
institutions, no part of the net income of which inures to the benefit of any individual:
Provided, however, That not more than thirty percent (30%) of the said bequests,
devises, legacies or transfers shall be used by such institutions for administration
purposes

SEC. 88 - Determination of the value of the estate

a) Usufruct - probable life of the beneficiary in accordance with the latest Basic Standard
Mortality Table, to be approved by the Secretary of Finance, upon recommendation of
the Insurance Commissioner
b) Properties - shall be appraised at its FMV; or whichever is higher of FMV as determined
by the Commissioner or FMV as shown in the schedule of values fixed by the Provincial
and City Assessors
SEC. 90 - Estate Tax Returns
a) Requirements
i) Value of the gross estate of the decedent at the time of his death is situated in
the country
ii) Deductions allowed from gross estate in determining the estate as per Sec. 86
iii) Such part of such info may be necessary to establish the the correct taxes

Provided, however, That estate tax returns showing a gross value exceeding P5,000,000 shall
be supported with a statement duly certified to by a Certified Public Accountant containing the
following:

a) Itemized assets with their corresponding gross value at the time of his death
b) Itemized deductions from gross estate allowed in Sec. 86
c) Amount of tax due whether paid or still due and outstanding

b) Time for filing - within 1 year from the decedent’s death

c) Extension of time - not exceeding 30 days for filing the return

d) Place of filing - with an authorized agent bank, Revenue District Officier, Collection Officer, or
duly authorized Treasurer or if there be no legal residence in the country, Office of the
Commissioner

SEC. 91 - Payment of Tax

a) Time of payment - the time the return is filed by the executor, administrator, or the heirs
b) Extension of time - not to exceed 5 years, or 2 years in case the estate is settled
extrajudicially
c) 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 - 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

Sec. 92 - Discharge of Executor or Administrator from Personal Liability.

If the executor makes a written application to the Commissioner for determination of the amount
of the estate tax and discharge from personal liability therefore, the Commissioner shall not
notify the executor or administrator of the amount of the tax (within 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). Upon payment of the amount, the executor which he is notified shall be
discharged from personal liability for any deficiency in the tax and shall be entitled to a receipt or
writing showing such discharge.
SEC. 93. Definition of Deficiency.

Deficiency means:
(1) The amount by which the tax imposed exceeds the amount shown as the tax by the
executor, upon his return: ut the amounts shown on the return shall first be increased by
the amounts previously assessed as a deficiency and decreased by the amount
previously repaid in respect of such tax
(2) f no return is made by the executor, administrator, or any heir, then the amount by which
the tax exceeds the amounts previously assessed as a deficiency; but (same as number

SEC. 94. Payment before Delivery by Executor or Administrator.

No judge shall authorize the executor 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 by way of gifts inter vivos or mortis causa, legacy
or inheritance, unless a certification from the Commissioner that the tax had been paid is
show, and they shall immediately notify the Commissioner,.
● Any lawyer, notary public, or any government officer who, intervenes in the preparation
of documents regarding partition or disposal of donation shall have the duty of furnishing
the Commissioner, 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, 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 knows a dead 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
6% fwt
● For this purpose, all withdrawal slips shall contain a statement 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.