- is an excise tax on the right of

transmitting property at the time of

death and on the privilege that a person
is given in controlling to a certain
extent the disposition of his property to
take effect upon death. A tax imposes
on gratuitous transfer mortis causa.
 It is a transfer tax
 It is an excise tax
 It is a progressive tax
 It is a national tax
 It is a direct tax
 Benefit Received Theory
 State Partnership Theory
 Ability to Pay Theory
 Redistribution of wealth theory
-
Gross Estate xxx

Less: Allowable Deductions (xxx)

Net Taxable Estate xxx

Multiply to Estate Tax Rate 6%

Estate Tax Due xxx

 Tangible Intangible
Decedent Real Property Personal Personal Property
Property
Within Without Within Without Within Without
Citizen √ √ √ √ √ √
Resident Alien √ √ √ √ √ √

Non-Resident √ X √ X X (if X
Alien there
is
recipro
city)
 means incorporeal property which
do not have physical form but
represents rights and privileges.
 INTANGIBLE ASSET SITUS
Receivable (promissory note) Residence of the debtor
Bank deposits Location of the bank
Other intangible properties
a. Franchises, patents, copyrights, Where the property is used
trademarks or exercised
a. Investment in partnership Where the partnership is
established
a. Shares of stocks (including
corporate bonds)
i. Domestic corporation Within the Philippines
ii.Foreign corporation Without the Philippines
Except:
i. If ≥85% of business is in Within the Philippines
the Philippines
ii. If shares have acquired a Within the Philippines
business situs in the
Philippines
1. Lot in Singapore, P50M.
2. Apartment in San Francisco, Camotes, P15M.
3. Cash in Metrobank, P2M.
4. Stocks of SMC, P25M.
5. Car in Alaska, Mambaling – P1.5M.
6. Agricultural farm in Siquijor, P10M.
7. Cash deposit in Shanghai Bank, China, P5M.
8. PLDT’s stock safely deposited in Paris, P30M.
9. Personal properties in Belgium, Pasil, P3M.
10. Cash in China Bank, P4M.
- Basically properties are valued at fair
market value at time of death of
decedent.

What is the FMV?

PROPERTY VALUATION
1. Real Property Fair Market Value
a. As determined by the Commissioner or
b. As shown in the schedule of values fixed
by the provincial and city assessors

WHICHEVER IS HIGHER
1. Shares of Stocks
UNLISTED
Common Shares Book Value, appraisal surplus shall not be
considered as well as the value assigned to
preferred shares

Preferred Shares Par Value

LISTED Arithmetic Mean between the highest and

the lowest quotation at a date nearest the
date of death, if none is available on the
date of death itself
1. Personal Property Whether tangible or intangible, appraised at
Fair Market Value. Sentimental value is
1. Properties owned by the decedent and
physically present in his estate at the time
of death.
2. Interest (whether legal or beneficial) in
property owned or possessed by the
decedent at the time of death.
3. Claims against insolvent person.
4. Conjugal properties if married decedent.
5. Taxable Transfers - Made during lifetime, but are in
nature of testamentary dispositions (mortis causa in substance).
 Transfers in contemplation of
death
 Revocable transfers – life
insurance
 Transfer under general power of
appointment
 Transfer with insufficient
consideration