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Is an act of liberality
Is a contract
Is a tax imposed on the exercise of the donors right during lifetime (Excise Tax)

1. Capacity of the donor:
Capacity to contract
Capacity to dispose
2. Donative intent
Direct gift = intent is required
Indirect gift = intent is not required (ex. by way of sale)
3. Delivery
Perfected from the moment the donor knows of the acceptance by the
done. (FMV)
4. Acceptance
Must be made within the lifetime of the donor.

1. Donation of Movable Property
Oral or Writing
If it exceeds 5,000, donation must be in writing. Otherwise, it shall be
2. Donation of Immovable Property
Must be in public document. Otherwise, VOID.
Acceptance may be made in the same deed of donation or in a
separate public document and done during the lifetime of the donor.


FMV at the time the donation is perfected.

Resident or citizen = within and without
Nonresident alien = within

1. Transfer for insufficient consideration

Property except real property that is subjected to final tax
Transferred for less than an adequate and full consideration
Rule: FMV < Consideration
Value: FMV @ the time of the execution of the Contract to Sell or Deed of Sale which
is not preceded by a Contract to Sell)

2. Renunciation of inheritance
By the surviving spouse of his/her share in the conjugal or community
after the dissolution of the marriage in favor of any persons.
General renunciation by an heir is not subject to donors tax unless
done in favor of identified heirs to the disadvantage of other heirs.
3. Condonation of Indebtedness
Condonation in favor of its shareholders is not subject to donors tax.
Guaranty is gratuitous unless stated otherwise. If guarantor is
reimbursed by principal debtor, it is not a gratuitous act.

4. Special rules on Husband and Wife

They are co-owners of conjugal property
Separate taxpayers. Hence, they can claim separate exemption.
If only one of the husband/wife signed the deed of donation, theres
only one donor for donors tax purposes.
Donation of property (direct/indirect) between spouses during marriage
(includes live-in without valid marriage) shall be VOID, except
moderate gifts.

5. Contribution for election campaign

Not subject to donors tax

6. Splitting of gifts
Applicable if the donor makes two or more donations during different
calendar years.

Between persons guilty of adultery at the time of donation.
Between persons guilty of a criminal offense.
Made to a public officer or his wife, descendants and ascendants, by
reason of his office.

EXEMPT GIFTS (deductions)

1. Dowries
Up to the first P 10,000. Both parents
Requisites: a. The donation must be given on account of marriage
b. Given by the parent to his child
c. Child is legitimate or legally adopted
d. Given before its celebration or within one year