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
Be
Excess
₱ -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
Property paragraphs:
Previously Taxed (1) Expeses, Losses,
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Repealed
Repealed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 Php10,000,000, the excess
shall 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
Medical Expenses Repealed
receipts; ProVIDEd, That in no
case shall the deductible
medical expenses exceed
 NIRC of 1997,
Section 86 (B) TRAIN
as
amended
Expenses, Losses, Indebtedness
and Taxes
That portion of the
deductions specified in
Subsection (A)(1)
paragraph (1) of
a) Funeral Expense
Subsection Repealed
b) Judicial Expense
(A) of this Section which the
c) Claims against estate
value of such part bears to
d) Claims of the deceased against
the value of his entire gross
insolvent person
estate wherever situated;
e) Unpaid mortgages
Standard Deduction None Php500,000

Same with Citizen Same with

Property Previously Taxed
or Resident Citizen or
 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 Provided, however, That estate Provided, however, That estate

information as tax returns showing a gross tax returns showing a gross
may at the time value exceeding P2,000,000 value exceeding P5,000,000
be ascertainable shall be supported with a shall be supported with a
& such statement duly certified to by a statement duly certified to by a
supplemental Certified Public Accountant Certified Public Accountant
data as may be containing the following: containing the following:
necessary to
establish the xxx xxx
correct taxes
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
Payment of Tax heirs can withdraw an allowed subject to 6% final
Antecedent to amount not exceeding withholding 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
Be
Excess
₱ -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,
TRAIN
as
amended
Transfer for The excess between the xxx…ProVIDEd, howeVER, That a
Less than FMV of the property sale, exchange, or other transfer
Adequate and and consideration of property made in the
Full received shall be ordinar y course of business (a
Consideration deemed a gift subject transaction which is a bona fide,
to Donor’s Tax at arm’s length, and free from
*Except any donative intent), will
Real be considered as made for
Property an adequate and full
consideration in money or
money’s worth.

Dowries or Gifts 1st P10,000 gifts by the

made on parent is exempt from
account of donor’s tax Repealed
marriage
“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,
TH
OPLAS & CO., CPAS
25 FLOOR PHILIPPINE AXA LIFE CENTRE,
SEN. GIL PUYAT COR. TINDALO ST. MAKATI CITY

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

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