Estate Tax

Estate Tax

Succession - is the transfer of a thing, right or

obligations from one person to another by death
of the owner
Gross Estate – Properties of the Decedent (owner
who died)
Decedent – owner of the properties
Heir – person/s who will receive the gross estate
Legitime – property with legal heir/s
 Forms of Succession
1.Testamentary or Testate – transfer of property
by will
2.Legal or Intestate - transfer of property by
operation of law
3.Mixed – testamentary and operation of law
 
Objects of Succession
4.Thing
5.Right
6.Obligation
 Elements of Succession
1. Death of Decedent
2. Inheritance
3. Successors
4. Acceptance
Formula in computing Estate Tax

Gross Estate ……………………………… P XXX

Less: Allowable Deduction ……………… XXX
Net Taxable Estate …………………… P XXX
Estate Tax Rate ………………………… 6%
ESTATE TAX ………………………… P XXX
 
Gross Estate – Single Decedent
Decedent is:
1. Citizen or Resident Decedent
Regardless of Location
a. Real Properties
b. Personal Properties
• Tangible
• Intangible
2. Not a citizen and Non-resident
Only Located in the Philippines
a. Real Properties
b. Personal Properties
• Tangible
• Intangible (Subject to
reciprocity)
Gross Estate
Tangible Personal Intangible Personal
Decedent Real Property
Property Property
  Within Without Within Without Within Without
1) Citizen            
Resident ✔ ✔ ✔ ✔ ✔ ✔
Non-resident ✔ ✔ ✔ ✔ ✔ ✔
2) Alien            
Resident ✔ ✔ ✔ ✔ ✔ ✔
Non-resident Alien ✔ ✖ ✔ ✖ ✔ ✖
✖ (if there is
reciprocity)
Example A: Decedent died leaving the following properties:
Building in Hongkong ………………….. P7,000,000
Land in the Philippines …………………. 5,000,000

1) Gross Estate if decedent is a Filipino.

GE = P12,000,000

2) Gross estate if decedent is a Chinese living in Hongkong

GE = P5,000,000

3) Decedent is an Indian, living in the Philippines

GE = P12,000,000
 Example B: Decedent died with the following properties:
 
Building in the Philippines …………….. P 12,000,000
Shares of stocks in the Philippines …….. 2,000,000 (Intangible personal Property)
Condominium in the US ………………. 20,000,000

1) Gross estate if decedent is a Filipino living in the US.

GE = P34,000,000 (despite living in the US, but decedent is a Filipino)

2) Gross estate if decedent is an American living in the Philippines … P34,000,000

GE = P34,000,000 (despite an alien (American) but lives in the Phils.)

3) Gross estate if decedent is a non-resident alien (and there is reciprocity).

GE = P12,000,000 (shares of stocks being an intangible personal property but there is reciprocity is not
taxable).
4) Gross estate if decedent is a non-resident alien (and there is no reciprocity).
GE = P14,000,000 (shares of stocks being an intangible personal property but there is no reciprocity is
taxable).
 Thank You

Next to discuss: Allowable deductions from gross

estate of a single decedent