TRANSFER TAXATION: Estate Tax

REX BANGGAVVAN, CPA MBA

ESTATE TAXATION
 Taxation of mortis causa transfer or succession
Succession — a mode of transmission of the ownership, rights, interests and obligations
over property by reason of death of the owner in favor of certain persons designated by
the owner himself or by operation of law.
Elements:
1. Decedent — the person who died whose properties, rights and obligations are
transmitted
2. Successor — the person to whom the property, rights and obligations of the
decedent will pass
3. Estate — the properties, rights and obligations of the decedent (inheritance)
Kinds of succession:
1. Testate (Voluntary) — succession is carried out according to the wishes of the
testator expressed in a will executed in the form prescribed by law
2. Intestate (Involuntary) — succession without a will or with one invalid, succession
will took effect by operation of law
Estate Tax — tax on the privilege of the decedent to transmit his estate at death to his lawful
heirs or beneficiaries
GROSS ESTATE General Principles
1. The properties of citizens and resident aliens located within or outside the Philippines
shall be included in gross estate
2. The properties of non-resident alien located within the Philippines shall be included in
gross estate; however, intangible properties within the Philippines shall be subject to
reciprocity.