ESTATE AND DONOR’S TAX

Tax Advisory Services

Academy of Quality Training
Alas, Oplas, & Co., CPAs
 TO KNOW AND UNDERSTAND THE TRAIN LAW, ITS EFFECTS
AND APPLICATION INCLUDING THE MOST RECENT BIR
ISSUANCES AND UPDATES REGARDING ITS IMLEMENTATION
 Comparison of Estate Tax Rate – OLD vs. NEW
 Deduction Allowed to the Estate of a Citizen or a Resident
 Deduction Allowed to Nonresident Estates
 Share in Conjugal Property
 Tax Credit for Estate Taxes Paid to a Foreign Country
 Estate Tax Returns
 The Tax Shall
Over But Not Over Plus Over Of the Excess
Be
₱ -0- ₱200,000 Exempt -0- -0-

₱200,000 ₱500,000 ₱ -0- 5% ₱200,000

₱500,000 ₱2,000,000 ₱15,000 8% ₱500,000

₱2,000,000 ₱5,000,000 ₱135,000 11% ₱2,000,000

₱5,000,000 ₱10,000,000 ₱465,000 15% ₱5,000,000

₱10,000,000 And Over ₱1,215,000 20% ₱10,000,000

 Imposition on the value of such net estate a:

ESTATE TAX RATE

6%
Section 86 (A) NIRC of 1997, as amended
Actual funeral expense or 5%
Funeral Expenses of the gross estate, whichever is
lower.
Deductible if arises from
Judicial Expenses testamentary or interstate
proceedings
Such deduction allowable shall
be reduced by an amount
which bears the same ratio to
the amounts allowed as
deduction under paragraphs:
Property (1) Expeses, Losses,
Previously Taxed Indebtedness, and Taxes
(3) Transfers for Public Use
TRAIN
Repealed
Repealed
Such deduction allowable shall
be reduced by an amount
which bears the same ratio to
the amounts allowed as
deduction under paragraphs:
(2) Claims against Estate
(3) Claims of the deceased
against insolvent person
(4) Unpaid Mortgages
(6) Transfers for Public Use
Section 86 (A) NIRC of 1997, as amended TRAIN
If the FMV exceeded If the FMV exceeded
The Family Home Php1,000,000, the excess shall Php10,000,000, the excess
be subject to estate tax. shall be subject to estate tax.
Standard
Php1,000,000 Php5,000,000
Deduction
If incurred within 1 year prior
to his death which shall be duly
substantiated with receipts;
Medical Expenses Repealed
Provided, That in no case shall
the deductible medical
expenses exceed Php500,000.
 NIRC of 1997, as
Section 86 (B) TRAIN
amended
Expenses, Losses, Indebtedness
and Taxes
That portion of the
deductions specified in
Subsection (A)(1)
paragraph (1) of Subsection
a) Funeral Expense
(A) of this Section which the Repealed
b) Judicial Expense
value of such part bears to
c) Claims against estate
the value of his entire gross
d) Claims of the deceased against
estate wherever situated;
insolvent person
e) Unpaid mortgages

Standard Deduction None Php500,000

Same with Citizen or Same with Citizen

Property Previously Taxed
Resident or Resident
 NIRC of 1997, as amended TRAIN
Section 90 (A) xxx…,or where, though
Requirements exempt from tax, the gross
Phrase was removed.
value of the estate exceeds
P200,000,…xxx
Section 90 (A) (3) xxx xxx

Part of information Provided, however, That estate Provided, however, That estate
as may at the time tax returns showing a gross tax returns showing a gross
be ascertainable value exceeding P2,000,000 value exceeding P5,000,000
& such shall be supported with a shall be supported with a
supplemental data statement duly certified to by a statement duly certified to by a
as may be Certified Public Accountant Certified Public Accountant
necessary to containing the following: containing the following:
establish the
correct taxes xxx xxx

Timing for Filing Shall be filed within 6 months Shall be filed within 1 year
from the decedent’s death. from the decedent’s death.
 NIRC of 1997, as amended TRAIN

Section 91 (C) In case the available cash of the

Payment by estate is insufficient to pay the
Installment total estate tax due, payment by
None installment shall be allowed
within 2 years from the statutory
date for its payment without civil
penalty and interest.

Section 97 Administrator or one of the Any withdrawal shall be allowed

Payment of Tax heirs can withdraw an subject to 6% final withholding
Antecedent to amount not exceeding tax.
Transfer of Shares, P20,000 upon authorization
Bonds or Rights of the Commissioner.
 NIRC of 1997, as
amended
Section 97 xxx…it shall not allow any
Payment of Tax withdrawal from the said
Antecedent to deposit account, unless the
Transfer of Shares, Commissioner has certified
Bonds or Rights that the taxes imposed
thereon by this Title have
been paid;…xxx
Heirs can also withdraw an
amount not exceeding
P20,000
TRAIN
xxx…it shall allow any withdrawal
from the said deposit account,
subject to a final withholding tax of
6%. For this purpose, all withdrawal
slips shall contain a statement to
the effect that all of the joint
depositors are still living at the
time of withdrawal by any one of
the joint depositors and such
statement shall be under oath by
the said depositor.
 Comparison of Donor’s Tax Rate – OLD vs. NEW
 Other donor’s tax provisions changed
 The Tax Shall
Over But Not Over Plus Over Of the Excess
Be
₱ -0- ₱100,000 Exempt -0- -0-
₱100,000 ₱200,000 ₱ -0- 2% ₱100,000
₱200,000 ₱500,000 ₱2,000 4% ₱200,000
₱5,000,000 ₱1,000,000 ₱14,000 6% ₱5,000,000
₱1,000,000 ₱3,000,000 ₱44,000 8% ₱1,000,000
₱3,000,000 ₱5,000,000 ₱204,000 10% ₱3,000,000
₱5,000,000 ₱10,000,000 ₱404,000 12% ₱5,000,000

₱10,000,000 And Over ₱1,004,000 15% ₱10,000,000

 Imposition on the value of total gifts in excess
of Php250,000 exempt gifts, including to a
stranger, a:

DONOR’S TAX RATE

6%
 NIRC of 1997, as
TRAIN
amended

Transfer for Less The excess between the xxx…Provided, however, That a
than Adequate FMV of the property and sale, exchange, or other transfer
and Full consideration received of property made in the
Consideration shall be deemed a gift ordinary course of business (a
subject to Donor’s Tax transaction which is a bona fide,
*Except Real at arm’s length, and free from
Property any donative intent), will be
considered as made for an
adequate and full
consideration in money or
money’s worth.

Dowries or Gifts 1st P10,000 gifts by the

made on account parent is exempt from
of marriage donor’s tax Repealed
“When it is obvious that the goals cannot be reached, don't
adjust the goals, adjust the action steps.” - Confucius
THANK YOU!!

TAX ADVISORY SERVICES

ALAS, OPLAS & CO., CPAS
25TH FLOOR PHILIPPINE AXA LIFE CENTRE,
SEN. GIL PUYAT COR. TINDALO ST. MAKATI CITY

Telephone: +63 (02) 759-5091 to 92

Email: aocheadoffice@alasoplascpas.com