CHAPTER 4: GROSS ESTATE (Residence & Citizenship

CITIZENS OF THE PH

The ff are considered citizens of the PH.

1. Those who are citizens of the Philippines at the time of the disposition of this CONSTITUTION.
2. Those ppl na ang parents are citizens of the PH.
3. Itong mga tao na pinangaki BAGO mag ’’JANUARY 17, 1973 kang saiyang Filipino MOM, who
elect Philippine citizenship upon attaining the age of majority.
4. Those who are naturalized by the law in the case of an alien.

RESIDENCE FOR ESTATE TAX PURPOSES

Ang term na ‘’residence’’ dae man kinakaipuhan na actual place kang saindang tg iistaran.

It refers to the ‘’PERMANENT HOME’’ ang lugar kung sain dawa na mayo ang saindang presence or
absent for business or pleasure mabalik ta mabalik sinda duman sa place na ito and naka depende sa
fact and circumstances, in a sense that they disclose intent.

PROPERTIES INCLUDED IN GROSS ESTATE

Ang properties na include sa gross estate is nakadepende sa CITIZENSHIP/RESIDENCE kang si

decedent.

NOTE: Filipino citizens are called ‘’citizens’’, while those who are not Filipino citizens are called ‘’aliens’’

Ang value kang gross estate of a RESIDENT/CITIZEN DECEDENT shall be determined sa

pamamagitan kang pag include kang VALUE OF ALL HIS/ OR HER PROPERTY AT THE TIME OF HIS DEATH
ang mapa real or personal property, tangible man or intangible dawa sain payan nakalaag. Provided,
however.

That is the case of the NON-RESIDENT DECEDENT (ALIEN), who, at the time of his death, was NOT a
citizen of the Philippines; ONLY ang magiging part lang kang saiya GROSS ESTATE ay si mga property na
situated in the Philippines and should be included in his taxable estate.

CLASSIFICATION INCLUDED IN HIS GROSS ESTATE

RESIDENT/CITIZEN DECEDENT ALL PROPERTY (REAL/PERSONAL)
NON-RESIDENT DECEDENT (ALIEN PROPERTY LOCATED IN THE PH.

If the decedent is a CITIZEN/RESIDENT ALIEN ang gross estate shall include the ff properties.

1. Real property within and without PH.

2. Tangible personal property within and without PH.
3. Intangible personal property within and without PH.

In the case of NON-RESIDENT ALIEN, ang gross estate should include ONLY THE FF:
 1. Real property within PH.
2. Tangible personal property within PH.
3. Intangible personal property within PH, unless EXEMPTED under the principle of
‘’RECIPROCITY’’.

TABLE 1: CLASSIFICATION RULE

CLASSIFICATION OF RESIDENT OR NON-RESIDENT ALIEN NON-RESIDENT ALIEN

PROPERTY CITIZEN (NO RECIPROCITY) WITH RECIPROCITY
REAL PROPERTY
Within PH YES YES YES
Without PH YES NO NO
PERSONAL PROPERTYV
Tangible within YES YES YES
Tangible without YES NO NO
Intangible within YES YES NO
Intangible without YES NO NO
YES – the property is included in the gross estate of the decedent.
NO- the property is NOT included in the gross estate of the decedent.

RULE ON RECIPROCITY

Ang rule on reciprocity applied ONLY TO NON-RESIDENT ALIENS(NRA) , particularly on the

‘’MORTIS CAUSA/ ESTATE TAX DONATION’’ kapag ang property are INTANGIBLE PERSONAL PROPERTY
which is located WITHIN TH PHILIPPINES.

NOTE: No estate tax shall be collected in respect of INTANGIBLE PERSONAL PROPERTY in the ff
circumstances:

1. If the decedent at the time of his death was a CITIZEN AND RESIDENT of a foreign country that
did NOT impose a transfer tax on the Intangible personal property of the citizens of the
Philippines NOT RESIDING in that foreign country.

2. If the law of the FOREIGN COUNTRY of which the decedent at the time of his death allows
similar exemption from transfer taxes of every character or description regarding INTANGIBLE
PERSONAL PROPERTY owned by citizens of the Philippines NOT residing in that foreign country.

If NO EXEMPTIONS is granted to Filipinos, the intangible personal property shall be subject to

estate tax in the Philippines.

REAL AND PERSONAL PROPERTIES

 Also known as ‘’IMMOVABLES’’ while the personal properties are known as ‘’MOVABLES’’.

REAL PROPERTY- enumerated in Article 415 of Civil code of the Philippines.

PERSONAL/ MOVABLE PROPERTIES – are those that are not real properties. The following test must be
applied in the SUCCESSIVE ORDER to determine whether an object is movable.

A. Whether the object can be transported from place to place.

B. Whether the change of location can occur without injury to the REAL PROPERTY to which it is
attached.
C. Whether it is not included in the enumeration found in Article 415 of the Civil code of the
Philippines.

NOTE: If the answers to the above questions are affirmative or can happen edi classified as
MOVABLE OR PERSONAL PROPERTY.
 The predominant criterion, however. In the difference of property into real and personal
property is the possibility na pwede maitransfer kang personal property or possibility na Mahiro
whether by itself as in the case of animals or by some external acts.

Real or Immovable property requires stability or the impossibility of transferring the property
from one place to another.

INTANGIBLE PROPERTY WITHIN

The ff INTANGIBLE PERSONAL PROPERTIES are considered situated WITHIN
PHILIPPINES.

1. Franchise which must be exercised WITHIN THE PH.

2. Shares, obligations, or bonds issued by any corporation or Sociedad anonima organized or
constituted in the PH by the PH LAW.
3. Shares, obligations, or bonds issued by any foreign corporation EIGHTY-FIVE PERCENTUM
(85%) of the business is in the Philippines.
4. Shares, obligations, or bonds issued by any foreign corporation if that shares, obligations, or
bonds have acquired a business located or situs in the Philippines.
5. Share or rights in any partnership, business or industry established in the Philippines.