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property
(if
conjugal
property)
of
the
heirs
shall
be
divided
amongst
the
heirs.
if
there
is
personal
property
involved.
published in a newspaper of general circulation once a
It must be noted that the Deed of Extrajudicial Settlement must be published in a newspaper
of general circulation once a week for 3 consecutive weeks. Kindly consult with the Register
of Deeds where the property is located for the listing of these newspapers.
Before filing the Deed of Extrajudicial Settlement with the Register of Deeds where the land
is located, it is necessary that the estate taxes be paid first. Under Philippine laws, estate
tax is defined as a tax on the right of the deceased person to transmit his estate to his
lawful heirs and beneficiaries at the time of death and on certain transfers, which are made
by law as equivalent to testamentary disposition. According to the Bureau of Internal
Revenue, estate tax is not a tax on property but rather imposed on the privilege of
transmitting property upon the death of the owner.
It bears great emphasis that the Estate Tax Return must be filed within six (6) months from
the decedents death. The deadline may be extended by the Commissioner of the BIR, in
meritorious cases, not exceeding thirty (30) days. It must be noted that the estate itself is
assigned its own Tax Identification Number (TIN). The Estate Tax Return is filed with Revenue
District Office (RDO) having jurisdiction over the place of residence of the decedent at the
time of his death. If the decedent has no legal residence in the Philippines, then the return
can be filed with:
1. The Office of the Revenue District Officer, Revenue District Office No. 39, South Quezon
City; or
2. The Philippine Embassy or Consulate in the country where decedent is residing at the time
of his death.
Furthermore, the estate tax shall be paid at the time the return is filed. However, upon
request and if the Commissioner of the BIR 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 extra-judicially. If an extension is granted, the BIR Commissioner may require a bond
in such amount, not exceeding double the amount of tax, as it deems necessary.
The estate tax is based on the value of the net estate as follows:
1.
If
not
over
P200,000,
it
is
exempt
2. If over P200,000 but not over P500,000, then tax is 5% of the excess over P200,000
3. If over P500,000 but not over P2,000,000, then tax is P15,000 PLUS 8% of the excess over
P500,000
4. If over P2,000,000 but not over P5,000,000, then tax is P135,000 PLUS 11% of the excess
over
P2,000,000
5. If over P5,000,000 but not over P10,000,000, then tax is P465,000 PLUS 15% of the
excess
over
P5,000,000
6. If over P10,000,000, then tax is P1,215,000 PLUS 20% of the excess over P10,000,000
The basis shall be the net estate. That means that there are allowable deductions on the
estate. These deductions include funeral expenses, share of the surviving spouse, medical
expenses incurred by the decedent within 1 year prior to his death, family home deduction
of not more than P1,000,000.00, standard deduction of P1,000,000.00, among others. It is
best to consult with an accountant on this matter to determine the accurate estate tax.
For extrajudicial settlement of estate, the following documents must be submitted with the
BIR:
1.NoticeofDeath
2.CertifiedtruecopyoftheDeathCertificate
3.DeedofExtra-JudicialSettlementoftheEstate
4.Certifiedtruecopyofthelandtitlesinvolved
5. Certified true copy of the latest Tax Declaration of real properties at the time of death
6. Photo copy of Certificate of Registration of vehicles and other proofs showing their correct
value
7.Photocopyofcertificateofstocks
8.Proofofvaluationofsharesofstocksatthetimeofdeath
a.ForlistedstocksnewspaperclippingsorcertificationfromtheStockExchange
b. For unlisted stocks latest audited Financial Statement of issuing corporation with
computation
of
book
value
pershare
9.Proofofvaluationofothertypesofpersonalproperty
10. CPA Statement on the itemized assets of the decedent, itemized deductions from gross
estate
and
the
amount
dueifthegrossvalueoftheestateexceedstwomillionpesos
11. Certification of Barangay Captain for claimed Family Home