Estate Tax is a tax on the right of the deceased person to transmit his/her estate to his/her

lawful heirs and beneficiaries at the time of death and on certain transfers, which are made by
law as equivalent to testamentary disposition. It is not a tax on property.

Notable changes were done on the estate taxation as the TRAIN Law was signed. These
changes shall be discussed below:

a. The graduated rates of 5% to 20% from P200,000 onwards are now repealed. In TRAIN
law, net taxable estate shall now be subject to a flat rate of 6%.
b. The TRAIN law removes funeral expenses, judicial expenses, and medical expenses as
allowable deductions. In lieu of this, the Standard Deduction available to citizens
(resident or nonresident) and resident aliens is increased to P5 million, which previously
was only P1 million. However, the law also provides a standard deduction up to
P500,000 available for nonresident aliens for their properties that are includible in the
calculation of their taxable estate.
The decedent may also claim a Family Home exemption worth up to P10 million.
Previously, a family home worth P1 million are only exempted.
c. The filing of Notice of Death is now repealed in TRAIN law. However, the TRAIN law has
also increased the period of filing estate tax returns from 6 months to one year from
decedent’s death. Estate tax return exceeding P5 million must be certified with a CPA. It
is now P3 million higher than of the old tax law, which provides that an estate tax return
exceeding P2 million requires a certification from a CPA. Installment payment has also
been simplified which requires to pay the full estate tax for two years.
d. TRAIN law has increased the allowable withdrawals from the decedent’s bank account
up to any amount for as long as it is subject to a 6% final withholding tax. Previously, the
law only allows withdrawals only up to P20,000.

References
BIR. (2018). Revenue Regulation 12-2018, 1-16.
Leon-Intal, D. P. (2018, February 20). The Essential Guide to Estate tax under TRAIN law.
Retrieved from My Finance MD: http://www.myfinancemd.com/essential-guide-estate-
tax-train-law/
Patajo-Kapunan, A. L. (2018, January 14). Estate-tax changes under TRAIN law. Retrieved
from Business Mirror: https://businessmirror.com.ph/estate-tax-changes-under-train-law/
Teves, A. J. (2018, January 25). TRAIN Law: Estate tax and possible implications. Retrieved
from Business Mirror: https://businessmirror.com.ph/train-law-estate-tax-and-possible-
implications/

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