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Tax Form

BIR Form 1801 - Estate Tax Return


Documentary Requirements
1. Notice of Death duly received by the BIR, if gross estate exceeds P20,000 for deaths occurring on or after Jan. 1, 1998;
or if the gross estate exceeds P3,000 for deaths occurring prior to January 1, 1998
2. Certified true copy of the Death Certificate
3. Deed of Extra-Judicial Settlement of the Estate, if the estate is settled extra judicially
4. Court Orders/Decision, if the estate is settled judicially;
5. Affidavit of Self-Adjudication and Sworn Declaration of all properties of the Estate
6. A certified true copy of the schedule of partition of the estate and the order of the court approving the same, if
applicable
7. Certified true copy(ies) of the Transfer/Original/Condominium Certificate of Title(s) of real property(ies) (front and
back pages), if applicable
8. Certified true copy of the latest Tax Declaration of real properties at the time of death, if applicable
9. "Certificate of No Improvement" issued by the Assessor's Office declared properties have no declared improvement or
Sworn Declaration/Affidavit of No Improvement by at least one (1) of the transferees
10. Certificate of Deposit/Investment/Indebtedness owned by the decedent and the surviving spouse, if applicable
11. Photo copy of Certificate of Registration of vehicles and other proofs showing the correct value of the same, if
applicable
12. Photo copy of certificate of stocks, if applicable
13. Proof of valuation of shares of stocks at the time of death, if applicable

For listed stocks - newspaper clippings or certification from the Stock Exchange

For unlisted stocks - Audited Financial Statements duly certified by an independent certified public accountant
with computation of fair market value per share at the time of death

14. Proof of valuation of other types of personal property, if applicable


15. Proof of claimed tax credit, if applicable
16. CPA Statement on the itemized assets of the decedent, itemized deductions from gross estate and the amount due if the
gross value of the estate exceeds two million pesos, if applicable
17. Certification of Barangay Captain for claimed Family Home
18. Duly notarized Promissory Note for "Claims against the Estate" arising from Contract of Loan
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19. Accounting of the proceeds of loan contracted within three (3) years prior to death of the decedent
20. Proof of the claimed "Property Previously Taxed"
21. Proof of claimed "Transfer for Public Use"
22. Copy of Tax Debit Memo used as payment, if applicable
Additional requirements may be requested for presentation during audit of the tax case depending upon existing audit
procedures.

Tax Rates
Effective January 1, 1998 up to Present
If the Net Estate is
Over

But not Over

The Tax Shall be

Plus

Of the Excess Over

P 200,000.00

Exempt

P 200,000.00

500,000.00

5%

P 200,000.00

500,000.00

2,000,000.00

P 15,000.00

8%

500,000.00

2,000,000.00

5,000,000.00

135,000.00

11 %

2,000,000.00

5,000,000.00

10,000,000.00

465,000.00

15 %

5,000,000.00

1,215,000.00

20 %

10,000,000.00

10,000,000.00

Effective July 28, 1992 up to December 31, 1997 (Section 77 of the NIRC, as amended (Republic Act No. 7499)
If the Net Estate is
Over

But not Over


P 200,000.00

P 200,000.00

500,000.00

500,000.00

2,000,000.00

2,000,000.00
5,000,000.00

The Tax Shall be

Plus

Of the Excess Over

Exempt
5%

P 200,000.00

P 15,000.00

8%

500,000.00

5,000,000.00

135,000.00

12 %

2,000,000.00

10,000,000.00

495,000.00

21%

5,000,000.00

1,545,000.00

35 %

10,000,000.00

10,000,000.00

Effective January 1, 1973 to July 27, 1992 (Section 85 of the NIRC, as amended (Presidential Decree No. 69)
If the Net Estate is
Over

But not Over

The Tax Shall be

Plus

Of the Excess Over


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P 10,000.00

Exempt

P 10,000.00

50,000.00

3%

P 10,000.00

50,000.00

75,000.00

P 1,200.00

4%

50,000.00

75,000.00

100,000.00

2,200.00

5%

75,000.00

100,000.00

150,000.00

3,450.00

10%

100,000.00

150,000.00

200,000.00

8,450.00

15 %

150,000.00

200,000.00

300,000.00

15,950.00

20%

200,000.00

300,000.00

400,000.00

35,950.00

25%

300,000.00

400,000.00

500,000.00

60,950.00

30%

400,000.00

500,000.00

625,000.00

90,950.00

35%

500,000.00

625,000.00

750,000.00

134,700.00

40%

625,000.00

750,000.00

875,000.00

184,700.00

45%

750,000.00

875,000.00

1,000,000.00

240,950.00

50%

875,000.00

1,000,000.00

2,000,000.00

303,450.00

53%

1,000,000.00

2,000,000.00

3,000,000.00

833,450.00

56%

2,000,000.00

3,000,000.00

1,393,450.00

60%

3,000,000.00

Effective September 15, 1950 to December 31, 1972 (Section 85 of the NIRC, as amended (Republic Act No. 579)
Estate and Inheritance Tax
If the Net Estate is
Over

But not Over

ESTATE

INHERITANCE

5,000.00

Exempt

Exempt

5,000.00

12,000.00

1.0%

2%

12,000.00

30,000.00

2.0%

4%

30,000.00

50,000.00

2.5%

6%

50,000.00

70,000.00

3.0%

8%

70,000.00

100,000.00

5.0%

12%

100,000.00

150,000.00

7.0%

14%

150,000.00

250,000.00

9.0%

16%

250,000.00

500,000.00

11.0%

18%

500,000.00

1,000,000.00

13%

20%

15%

22%

1,000,000.00

Effective July 1, 1939 to September 14, 1950 (Section 85 of the NIRC, as amended (Commonwealth Act No. 466)

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Estate and Inheritance Tax


If the Net Estate is
Over

But not Over

ESTATE

INHERITANCE

Exempt

1.0%

3000.00

3,000.00

10,000.00

1.0%

10,000.00

30,000.00

1.5%

2.0%

30,000.00

50,000.00

2.0%

3.0%

50,000.00

80,000.00

2.5%

4.0%

80,000.00

110,000.00

3.0%

5.0%

110,000.00

150,000.00

3.5%

6.0%

150,000.00

190,000.00

4.0%

7.0%

190,000.00

240,000.00

4.5%

8.0%

240,000.00

290,000.00

5.0%

9.0%

290,000.00

350,000.00

5.5%

10.0%

350,000.00

420,000.00

6.0%

11.0%

420,000.00

500,000.00

6.5%

12.0%

500,000.00

600,000.00

7.0%

13.0%

600,000.00

720,000.00

7.5%

14.0%

720,000.00

850,000.00

8.0%

15.0%

850,000.00

1,000,000.00

8.5%

16.0%

1,000,000.00

1,200,000.00

9.0%

17.0%

1,200,000.00

1,500,000.00

9.5%

17.0%

10.0%

17.0%

1,500,000.00

Procedures
The heirs/authorized representative/administrator/executor shall file the estate tax return (BIR Form 1801) and pay the
corresponding estate tax with the Authorized Agent Bank (AAB), Revenue Collection Officer (RCO) or duly authorized
Treasurer of the city or municipality in the Revenue District Office having jurisdiction over the place of domicile of the
decedent at the time of his death, pursuant to Section 90(D) of the Tax Code, as amended.
In case of a non-resident decedent, with executor or administrator in the Philippines, the estate tax return shall be filed
with the AAB of the RDO where such executor/administrator is registered or is domiciled, if not yet registered with the
BIR.
For non-resident decedent with no executor or administrator in the Philippines, the estate tax return shall be filed with the
AAB under the jurisdiction of RDO No. 39 South Quezon City.

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The heir/authorized representative/administrator/executor shall submit all the applicable documentary requirements as
prescribed in Annexes A-6 and A-6.1 of Revenue Memorandum Order (RMO) No. 15-2003 and proof of payment to the
RDO having jurisdiction over the place of residence of the decedent or the RDO where the executor or administrator is
registered, or RDO No. 39 South, Quezon City, whichever is applicable. (part II, par.(4)of RMC No. 34-2013)
Payment of Estate Tax by installment - In case the available cash of the estate is not sufficient to pay its total estate tax
liability, the estate may be allowed to pay the tax by installment and a clearance shall be released only with respect to the
property, the corresponding/computed tax on which has been paid. (Section 9(F) of RR 2-2003)
One-Time Transaction (ONETT) taxpayers shall mandatorily use the eBIRForms in filing all of their tax returns. They
may opt to submit their tax returns manually using the eBIRForms Offline Package in the Revenue District Office having
jurisdiction over the place of domicile of the decedent at the time of his death or electronically through the use of the
Online eBIRForms System. (Sec. 3(2) RR No. 6-2014)
Please note that the time of payment will vary depending on the law applicable at the time of the decedents death.

Deadlines
File the return within six (6) months from decedent's death. However, the Commissioner may, in meritorious cases, grant
extension not exceeding thirty (30) days.
The Estate Tax imposed shall be paid at the time the return is filed by the executor or administrator or the heirs. However,
when the Commissioner finds that payment on the due date of the Estate Tax or of any part thereof would impose undue
hardship upon the estate or any of the heirs, he may extend the time for payment of such tax or any part thereof not to
exceed five (5) years, in case the estate is settled through the courts or two (2) years in case the estate is settled extrajudicially.
In all cases of transfers subject to tax, or where, though exempt from tax, the gross value of the estate exceeds Twenty
Thousand Pesos (P 20,000), Section 89 of the National Internal Revenue Code of 1997 (Tax Code), as amended, provides
that the executor, administrator or any of the legal heirs, shall send a written notice of death to the Commissioner within
two (2) months after the decedents death or within a like period after an executor or administrator qualify as such. (part
II, par.(1)of RMC No. 34-2013)
Please note that the time of filing will vary depending on the law applicable at the time of the decedents death.
Extension of Time of Filing:
When the Commissioner finds that the payment of the estate tax or of any part thereof would imposed undue hardship
upon the estate or any of the heirs, he may extend the time for payment of such tax or any part thereof not to exceed five
(5) years in case the estate is settled through the courts, or two (2) years in case it settled extra-judicially.
Where the request for extension is by reason of negligence, intentional disregard of rules and regulations, or fraud on the
part of the taxpayer, no extension will be granted by the Commissioner.
If an extension is granted, the Commissioner or his duly authorized representative may require the executor, or
administrator, or beneficiary, as the case may be, to furnish a bond in such amount, not exceeding double the amount, not
exceeding double the amount of tax and with such sureties as the Commissioner deems necessary, conditioned upon the
payment of the said tax in accordance in the terms of extension.
The request for extension shall be filed with the Revenue District Officer (RDO) where the estate is required to secure its
TIN and file the estate tax return. The application shall be approved by the Commissioner or his duly authorized
representative.
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Related Revenue Issuances


Revenue Regulations (RR) No. 2-2003, 6-2013, 6-2014
Revenue Memorandum Order (RMO) Nos. 26-82, 31-82, 15-2003
Revenue Memorandum Circular (RMC) Nos. 1-98, 34-2013
Related Laws
Commonwealth Act No. 466 effective July 1, 1939
Republic Act No. 579 effective September 15, 1950
Republic Act No. 6110 effective August 4, 1969
Presidential Decree No. 69 effective January 1, 1973
Presidential Decree No. 1773 effective January 16, 1981
Presidential Decree No. 1994 effective January 1, 1986
Republic Act No. 7499 effective July 28, 1992
Republic Act No. 8424 effective January 1, 1998

Codal Reference
Sec. 84 to Sec. 97 of the National Internal Revenue Code

Frequently Asked Questions


1. Who are required to file the Estate Tax return?
a) The executor or administrator or any of the legal heirs of the decedent or non-resident of the Philippines under any of
the following situation:
- In all cases of transfer subject to Estate Tax;
- Where though exempt from Estate Tax, the gross value of the estate exceeds two hundred thousand P
200,000.00; and
- Where regardless of the gross value, the estate consists of registered or registrable property such as real
property, motor vehicle, share of stocks or other similar property for which a clearance from the Bureau of
Internal Revenue (BIR) is required as a prerequisite for the transfer of ownership thereof in the name of the
transferee. (part II par.(1.#3) of RMC No. 34-2013)

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b) Where there is no executor or administrator appointed, qualified and acting within the Philippines, then any person in
actual or constructive possession of any property of the decedent must file the return.
c) The Estate Tax imposed under the Tax Code shall be paid by the executor or administrator before the delivery of the
distributive share in the inheritance to any heir or beneficiary. Where there are two or more executors or administrators, all
of them are severally liable for the payment of the tax. The estate tax clearance issued by the Commissioner or the
Revenue District Officer (RDO) having jurisdiction over the estate, will serve as the authority to distribute the
remaining/distributable properties/share in the inheritance to the heir or beneficiary.
d) The executor or administrator of an estate has the primary obligation to pay the estate tax but the heir or beneficiary has
subsidiary liability for the payment of that portion of the estate which his distributive share bears to the value of the total
net estate. The extent of his liability, however, shall in no case exceed the value of his share in the inheritance.
2. What are included in gross estate?

For resident alien decedents/citizens:


a) Real or immovable property, wherever located
b) Tangible personal property, wherever located
c) Intangible personal property, wherever located
For non-resident decedent/non-citizens:
a) Real or immovable property located in the Philippines
b) Tangible personal property located in the Philippines
c) Intangible personal property - with a situs in the Philippines such as:
Franchise
which
must
be
exercised
in
the
Philippines
- Shares, obligations or bonds issued by corporations organized or constituted in the Philippines
- Shares, obligations or bonds issued by a foreign corporation 85% of the business of which is located in
the
Philippines
- Shares, obligations or bonds issued by a foreign corporation if such shares, obligations or bonds have
acquired a business situs in the Philippines ( i. e. they are used in the furtherance of its business in the
Philippines)
- Shares, rights in any partnership, business or industry established in the Philippines
3. 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


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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 decedents 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)
An amount equal to the value specified below of any property forming a part of the gross estate situated in the
Philippines of any person who died within five (5) years prior to the death of the decedent, or transferred to the
decedent by gift within five (5) years prior to his death, where such property can be identified as having been
received by the decedent from the donor by gift, or from such prior decedent by gift, bequest, devise or
inheritance, or which can be identified as having been acquired in exchange for property so received:
One hundred percent (100%) of the value, if the prior decedent died within one (1) year prior to the death
of the decedent, or if the property was transferred to him by gift within the same period prior to his death;
Eighty percent (80%) of the value, if the prior decedent died more than one (1) year but not more than
two (2) years prior to the death of the decedent, or if the property was transferred to him by gift within
the same period prior to his death;
Sixty percent (60%) of the value, if the prior decedent died more than two (2) years but not more than
three (3) years prior to the death of the decedent, or if the property was transferred to him by gift within
the same period prior to his death;

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Forty percent (40%) of the value, if the prior decedent died more than three (3) years but not more than
four (4) years prior to the death of the decedent, or if the property was transferred to him by gift within
the same period prior to his death; and
Twenty percent (20%) of the value, if the prior decedent died more than four (4) years but not more than
five (5) years prior to the death of the decedent, or if the property was transferred to him by gift within
the same period prior to his death;
These deductions shall be allowed only where a donors tax or estate tax imposed was finally determined and paid
by or on behalf of such donor, or the estate of such prior decedent, as the case may be, and only in the amount
finally determined as the value of such property in determining the value of the gift, or the gross estate of such
prior decedent, and only to the extent that the value of such property is included in the decedents gross estate,
and only if in determining the value of the estate of the prior decedent, no Property Previously Taxed or Vanishing
Deduction was allowable in respect of the property or properties given in exchange therefor. (Section 6 & 7 of RR
2-2003)
C. Transfers for public use
D. The family home - fair market value but not to exceed P1,000,000.00
The family home refers to the dwelling house, including the land on which it is situated, where the husband and
wife, or a head of the family, and members of their family reside, as certified to by the Barangay Captain of the
locality. The family home is deemed constituted on the house and lot from the time it is actually occupied as a
family residence and is considered as such for as long as any of its beneficiaries actually resides therein. (Arts.
152 and 153, Family Code)
E. Standard deduction A deduction in the amount of One Million Pesos (P1,000,000.00) shall be allowed as an
additional deduction without need of substantiation.
F. Medical expenses All medical expenses (cost of medicines, hospital bills, doctors fees, etc.) incurred (whether paid
or unpaid) within one (1) year before the death of the decedent shall be allowed as a deduction provided that the same are
duly substantiated with official receipts. For services rendered by the decedents attending physicians, invoices, statements
of account duly certified by the hospital, and such other documents in support thereof and provided, further, that the total
amount thereof, whether paid or unpaid, does not exceed Five Hundred Thousand Pesos (P500,000).
G. Amount received by heirs under Republic Act No. 4917-Any amount received by the heirs from the decedents
employer as a consequence of the death of the decedent-employee in accordance with Republic Act No. 4917 is allowed
as a deduction provided that the amount of the separation benefit is included as part of the gross estate of the decedent.
H. Net share of the surviving spouse in the conjugal partnership or community property
For a non-resident alien
A. Expenses, losses, indebtedness and taxes
B. Property previously taxed
C. Transfers for public use
D. Net share of the surviving spouse in the conjugal partnership or community property
No deduction shall be allowed in the case of a non-resident decedent not a citizen of the Philippines, unless the
executor, administrator, or anyone of the heirs, as the case may be, includes in the return required to be filed in
the Section 90 of the Code the value at the time of the decedents death of that part of his gross estate not situated
in the Philippines.
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Please note that the allowable deductions will vary depending on the law applicable at the time of the decedents
death.
6. What does the term "Funeral Expenses" include? (Sec 6 (A)(1) of RR 2-2003)
The term "FUNERAL EXPENSES" is not confined to its ordinary or usual meaning. They include:
(a) The mourning apparel of the surviving spouse and unmarried minor children of the deceased bought and used
on the occasion of the burial;
(b) Expenses for the deceaseds wake, including food and drinks;
(c) Publication charges for death notices;
(d) Telecommunication expenses incurred in informing relatives of the deceased;
(e) Cost of burial plot, tombstones, monument or mausoleum but not their upkeep. In case the deceased owns a
family estate or several burial lots, only the value corresponding to the plot where he is buried is deductible;
(f) Interment and/or cremation fees and charges; and
(g) All other expenses incurred for the performance of the rites and ceremonies incident to interment.
Expenses incurred after the interment, such as for prayers, masses, entertainment, or the like are not deductible.
Any portion of the funeral and burial expenses borne or defrayed by relatives and friends of the deceased are not
deductible. Actual funeral expenses shall mean those which are actually incurred in connection with the interment
or burial of the deceased. The expenses must be duly supported by official receipts or invoices or other evidence
to show that they were actually incurred.
7. What does the term "Judicial Expenses" include? (Sec 6 (A)(2) of RR 2-2003)
Expenses allowed as deduction under this category are those incurred in the inventory-taking of a assets comprising the
gross estate, their administration, the payment of debts of the estate, as well as the distribution of the estate among the
heirs. In short, these deductible items are expenses incurred during the settlement of the estate but not beyond the last day
prescribed by law, or the extension thereof, for the filing of the estate tax return. Judicial expenses may include:
(a) Fees of executor or administrator;

(f) Clerk hire;

(b) Attorneys fees;

(g) Costs of preserving and distributing the


estate;

(c) Court fees;


(d) Accountants fees;
(e) Appraisers fees;

(h) Costs of storing or maintaining property of


the estate; and
(i) Brokerage fees for selling property of the
estate.

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Any unpaid amount for the aforementioned cost and expenses claimed under Judicial Expenses should be supported by
a sworn statement of account issued and signed by the creditor.
8. What are the requisites for deductibility of claims against the Estate? (Sec 6(A)(3) of RR 2-2003)
(a) The liability represents a personal obligation of the deceased existing at the time of his death except unpaid obligations
incurred incident to his death such as unpaid funeral expenses (i.e., expenses incurred up to the time of interment) and
unpaid medical expenses which are classified under a different category of deductions pursuant to these Regulations;
(b) The liability was contracted in good faith and for adequate and full consideration in money or moneys worth;
(c) The claim must be a debt or claim which is valid in law and enforceable in court;
(d) The indebtedness must not have been condoned by the creditor or the action to collect from the decedent must not
have prescribed.
9. How do we determine the fair market value of the unlisted stocks? (RR NO. 6-2013) (Annex U)
In determining the value of the shares, the Adjusted Net Asset Method shall be used whereby all assets and liabilities are
adjusted to fair market values. The net of adjusted asset minus the adjusted liability value is the indicated value of the
equity.
For purposes of this item, the appraised value of real property at the time of sale shall be the highest among the following:
(a) The fair market value as determined by the Commissioner, or
(b) The fair market value as shown in the schedule of values fixed by the Provincial and City Assessors, or
(c) The fair market value as determined by Independent Appraiser.