ESTATE TAX

Ailyn B. Añano
 Estate Tax

The estate tax is imposed on the transfer of the decedent’s estate to his
lawful heirs and beneficiaries based on the fair market value of the net
estate at the time of the decedent’s death. It is not a tax on property. It is a
tax imposed on the privilege of transmitting property upon the death of the
owner. The estate tax is based on the laws in force at the time of death
notwithstanding the postponement of the actual possession or enjoyment of
the estate by the beneficiary.

The estate is the statutory taxpayer.

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Inclusions to Gross Estate
Property without
Decedent​ Property within the Philippines (outside) the
Philippines

Resident Citizen    

Non-Resident
   
Citizen

Resident Alien    

Non-Resident Alien
  X X
with Reciprocity

Non-Resident Alien
   x
without Reciprocity

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 Computation of the Net Estate
a. Gross Estate

Sec. 85 of the NIRC provides that the value of the gross estate of
the decedent includes the value at the time of his death of all
property, real or personal, tangible or intangible, wherever
situated.

In the case of a nonresident decedent who at the time of his

death was not a citizen of the Philippines, only that part of the
entire gross estate situated in the Philippines is included in the
taxable estate.

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 Inclusions Gross Estate (See Section 85 of the NIRC)

01 02 03 04 05 06 07 08
Decedent’s Transfers in Revocable Property passing Proceeds of life Prior Interests; Transfer for Capital of the
interest, to the contemplation of Transfers under general insurance; insufficient Surviving
extent of his death; power of consideration; Spouse.
interest therein at appointment; and
the time of his
death;

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Exclusions Gross Estate
Proceeds of life insurance
Proceeds of Life Insurance under a group insurance
GSIS Proceeds/Benefits
Accrual from SSS where the beneficiary is taken by employer (not take
Revocable Transfers
irrevocable appointed out upon the life of the
decedent

Transfer of property to the

National Government or to Transfer by way of bona fide Separate property of the
War damage payment
any of its political sales surviving spouse
subdivisions

Personal Equity and

Acquisition and/or transfer
Merger of usufruct in the Properties held in trust by the Retirement Account (PERA)
expressly declared as not
owner of the naked title decedent assets of the decedent-
taxable
contributor.

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 Computation of the Net Estate
b. Net Estate

Sec. 86 of the NIRC provides that the net estate is determined

by deducting from the value of gross estate the total amount
of allowable deductions.

Sec. 88(b) of the NIRC provides that;

“The computation for estate tax purposes of real properties

shall be based on the zonal value or the value as shown in the
schedule of market values prepared by the Provincial or City
Assessors whichever is higher.”

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 Deductions (See Section 86 of the NIRC.)
Deductions Allowed to the Estate of Citizen or a Resident.

(3) For claims of the (4) For unpaid

(1) Standard (2) For claims
deceased against the mortgages upon, or
Deduction; against the estate;
insolvent persons; any indebtedness;

(8) Amount Received

(5) Property (6) Transfers for (7) The Family by Heirs Under
Previously Taxed; Public Use; Home; and Republic Act No.
4917.

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 Deductions (See Section 86 of the NIRC.)
Deductions Allowed to Nonresident Estates.

(3) For claims of the

(1) Standard (2) For claims
deceased against the
Deduction; against the estate;
insolvent persons;

(4) For unpaid

(5) Property (6) Transfers for
mortgages upon, or
Previously Taxed; Public Use.
any indebtedness;

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Tax Rates

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Tax Rates

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Tax Rates

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Tax Rates

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Tax Rates

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 Thank you

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