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  • Ellapadin

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    Ella Padin
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    1) The document illustrates the testamentary division of Billy Eng's estate with 50% going to his 5 children in 10% shares each, 10% to his spouse, 10% to another child, and the remaining 40% as the free portion. 2) If Billy Eng's company were to buy the land from him, they would have to pay 32% income tax of Php 63,808,000 and 12% VAT of Php 24,000,000, totaling Php 87,808,000 in taxes. 3) If Billy Eng were to donate the three parcels of land to the corporation, they would have to pay 6% donation tax of Php 12,000

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    1) The document illustrates the testamentary division of Billy Eng's estate with 50% going to his 5 children in 10% shares each, 10% to his spouse, 10% to another child, and the remaining 40% as the free portion. 2) If Billy Eng's company were to buy the land from him, they would have to pay 32% income tax of Php 63,808,000 and 12% VAT of Php 24,000,000, totaling Php 87,808,000 in taxes. 3) If Billy Eng were to donate the three parcels of land to the corporation, they would have to pay 6% donation tax of Php 12,000

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
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    52 views13 pages

    Ellapadin

    Uploaded by

    Ella Padin
    1) The document illustrates the testamentary division of Billy Eng's estate with 50% going to his 5 children in 10% shares each, 10% to his spouse, 10% to another child, and the remaining 40% as the free portion. 2) If Billy Eng's company were to buy the land from him, they would have to pay 32% income tax of Php 63,808,000 and 12% VAT of Php 24,000,000, totaling Php 87,808,000 in taxes. 3) If Billy Eng were to donate the three parcels of land to the corporation, they would have to pay 6% donation tax of Php 12,000

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
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    Download as pptx, pdf, or txt
    of 13

    Presented by / Date Internal / External

    Billy Eng
    Troo Lab – Education

    Billy Eng

    2
    Troo Lab – Education

    Billy Eng

    3
    Troo Lab – Education

    A. Illustrate the testamentary division of Billy Eng’s estate


    10%

    10%
    Free Portion

    40% Child 1
    Child 2
    10% Child 3
    Child 4
    Child 5
    Spouse
    10%

    10% 10%

    4
    Troo Lab - Education

    A. Illustrate the testamentary division of Billy Eng’s estate

    Rationale:
    • Rule 1 – Half is for the legitimate children
    • 50%/5 = 10% (for each child)

    • Rule 2 – The spouse is equivalent to one of the legitimate


    children
    • 10%

    • Rule 3 – The remaining becomes the Free Portion


    5
    Troo Lab – Education

    B. If his company were to buy the land from him, what tax would
    have to be paid, and how much?

    The properties are considered as ordinary assets, hence will


    be taxed 32% for income tax, and 12% VAT.

    6
    Troo Lab – Education

    B. If his company were to buy the land from him, what tax would
    have to be paid, and how much?

    Computation

    Given:
    Zonal Value: 200M
    Previous Value: 600M

    Income Tax:
    200M – 600K = 199,400,000 (Gains)
    199,400,000 x 32% = 63,808,000
    7
    Troo Lab – Education

    B. If his company were to buy the land from him, what tax would
    have to be paid, and how much?

    Computation

    VAT:
    200M x 12% = 24,000,000

    Total:
    63,808,000 + 24,000,000 = Php 87,808,000

    8
    Troo Lab - Education

    C. If he were to donate the three parcels of land to the


    corporation, what tax would to be paid, and how much?

    Donation made to a stranger is subject to 6% of the net gifts


    during the year.

    Computation:
    200M x 6% = Php 12,000,000

    9
    Troo Lab – Education

    D. Is there another mode of transfer that you can


    recommend? If so, what tax would have to be paid and how
    much?
    Succession

    10
    Troo Lab – Education

    D. Is there another mode of transfer that you can


    recommend? If so, what tax would have to be paid and how
    much? P5, 700, 000

    11
    Troo Lab – Education

    E. What instruments are necessary to put into effect your


    answer in letter D?

    Testamentary Will

    12
    Troo Lab – Education

    F. What other estate planning opportunities do you see?

    Insurance
    To cover for the taxes to be paid

    13

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