ESTATE TAX

TRANSFER TAX

It is an excise tax on the previledge of

transferring property from a decedent to his
heirs or from a donor to a donee.

ESTATE TAX DONOR’S TAX

 ESTATE TAX

It is an excise ( priviledge) tax, not a property tax

It is the tax on the right of the deceased person to
transmit his estate to his lawful heirs or
benificiaries.
It is measured by the value of the property
It accrues as of the date of the death of decedent
 KINDS OF DEATH TAXES

1. ESTATE TAX
2. INHERITANCE TAX
ESTATE TAX RATE

EFFECTIVE JANUARY 1, 2018 TO PRESENT ( R.A 10963)

There shall be an imposed rate of six perfcent (6%) based on

the value of such NET ESTATE determined as of the time of
death of decedent composed of all properties, real or
personal, tangible or intangible less allowable deductions.
EFFECTIVE JANUARY 1, 1998 TO DECEMBER 31, 2017 ( R.A 8421)
FORMULA FOR COMPUTING THE TAX

Gross Estate xx
Less: Deduction xx
Net Taxable Estate xx
Multiply: Estate Tax Rate %
Estate Tax Due xx
Less: Tax Credit xx
Amount of Estate Tax Due xx
Take this situation for example:

Say you receive an inheritance worth ₱5 million with all the necessary
deductions worth ₱1.5 million. After subtracting all the liabilities from the
gross estate, you’re left with a net estate of ₱3.5 million.
Since estate tax is 6% of your net estate, multiply your ₱3.5 million by 0.06.
You’ll then get ₱210,000, which will be your estate tax.
DETERMINATION OF VALUE OF ESTATE

USUFRUCT
PROPERTIES
EXEMPTIONS FROM THE TAX

Merger of usufruct in the owner of the naked title

Payment of war damage
Benefits received by beneficiaries residing in the Philippines
under law administered by the U.S. Veterans Administration
Insurance proceeds from the GSIS
Bequest
Legacies or donation mortis cause to social welfare, cultural, or
charitable organizations
 FILING OF RETURN AND PAYMENT OF TAX

1. When - within 90 days from the decedent's death. The tax

shall be paid at the time the return is filed by the executor,
administrator, or the heirs, or within such extension as may be
granted by the Commissioner, but 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.
2. Where- Except in cases where the Commissioner of
Internal Revenue permits with the Revenue District
Officer, Collection Agent or duly authorized treasurer of
the city or municipally in which the decedent was
domiciled at the time of his death, or if there be no legal
residence in the Philippines, then with the Office of the
Commissioner of Internal Revenue.
3. Contents- The return must contain: a. The value of
gross estate of the decedent at the time of his death; b.
the deductions allowed therefrom; and c. such other
information as may be necessary to establish the
correct taxes.

4. Copies
 D. DONOR'S (GIFT) TAX

Donation is an act of liberality whereby a person

disposes gratuitous of a thing or right in favor of
another who accepts it.
 KINDS OF DONATIONS:

Inter vivos Mortis causa

if made between living person if made in the nature of a
to take effect during the lifetime testamentary disposition, that is,
of the donor. it shall take effect upon the death
of the donor.
 Donations not subject
to donor's tax
Only donations inter vivos
are subject to donor's tax.
Donations mortis causa are
subject to estate tax.
Gift tax
is tax imposed on the
transfer without
consideration of property
between two or more person
who are living at the time
the transfer is made
 KINDS OF GIFT TAXES

1. Donor's tax or tax levied on 2. Donee's tax or tax levied on

the act of receiving; it was
the act of giving; it
formerly the counterpart of
supplements the estate tax
the inheritance tax which has
been integrated into an estate
tax.
 NATURE OF GIFT TAX

It is an exercise (privilege) tax, i.e., a tax on the

privilege of the donee to receive. It is not a tax on
property as such because it's imposition does not rest
upon general ownership.
 PURPOSE OF GIFT TAX
1. The gift tax was enacted originally
to supplement the estate and
inheritance taxes by preventing their
avoidance by those who give away
property and money in anticipation
of death, through the taxation of
gifts inter vivos without which, the
property would be subjected to the
said taxes.
2. The donor's tax is also intended to
prevent the avoidance of income tax
through the device of splitting income
among numerous donees, with the donor
thereby escaping the effect of the
progressive rates of income taxation.
REQUISITES OF A TAXABLE GIFT

Capacity of the donor to make the donation;

Donative intent or intent on the part of the

donor to make gift;
Delivery, whether actual or constructive, of the gift;

Acceptance of the gift by the donee.

 TRANSFERS AND PERSONS SUBJECT TO
DONOR'S TAX

The donor's tax applies whether the transfer is in trust or otherwise, whether
the gift is direct or indirect, and whether the property is real or personal,
tangible or intangible. Where property is transfered for less than an adequate
and full consideration in money or money's worth, then the amount by which
the fair market value of the property exceeded the value of the consideration
shall, for the purpose of the tax be deemed a gift and shall be included in
computing the amount of gifts during the taxable year.
 NET GIFT

it is the total amount of gifts less the allowable deductions and

specific exemptions.

Tax imposed on net gift The donor's tax is computed upon the
basis of the total net gifts made during the calendar year.
FORMULA
Exemptions or deductions from gifts The following are also
deductible from the value of the property donated:

(1) encumbrance on the property donated if assumed by the

donee
(2) those specifically provided by the donor as a diminution
from the property donated
FILING IN RETURN AND PAYMENT OF TAX

1. When
2. Where
3. Contents
4. Copies
 REPORTERS

Roselyn Kitay Jane Cris Amposta Glaze Laurence

Manolong