What are excluded from gross estate?

 GSIS proceeds/ benefits

 Accruals from SSS
 Proceeds of life insurance where the beneficiary is irrevocably appointed
 Proceeds of life insurance under a group insurance taken by employer (not taken out upon his
life)
 War damage payments
 Transfer by way of bona fide sales
 Transfer of property to the National Government or to any of its political subdivisions
 Separate property of the surviving spouse
 Merger of usufruct in the owner of the naked title
 Properties held in trust by the decedent
 Acquisition and/or transfer expressly declared as not taxable
4. What will be used as basis in the valuation of property?

The properties subject to Estate Tax shall be appraised based on its fair market value at the time of the
decedent's death.

The appraised value of the real estate shall be whichever is higher of the fair market value, as determined
by the Commissioner (zonal value) or the fair market value, as shown in the schedule of values fixed by the
Provincial or City Assessor.

If there is no zonal value, the taxable base is the fair market value that appears in the latest tax declaration.

If there is an improvement, the value of improvement is the construction cost per building permit or the fair
market value per latest tax declaration.

5. What are the allowable deductions for Estate Tax Purposes?

Applicable for deaths occurring after the effectivity of RA 8424 which is January 1, 1998

For a citizen or resident alien 

A. Expenses, losses, indebtedness and taxes

(1) Actual funeral expenses (whether paid or unpaid) up to the time of interment, or an amount equal to five
percent (5%) of the gross estate, whichever is lower, but in no case to exceed P200,000.

(2) Judicial expenses of the testamentary or intestate proceedings.

(3) Claims against the estate.

(4) Claims of the deceased against insolvent persons where the value of the decedent’s interest therein is
included in the value of the gross estate; and,
(5) Unpaid mortgages, taxes and casualty losses

B. Property previously taxed (Vanishing Deduction) (Section 86(2) of the NIRC as amended by Republic Act
No. 8424)