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PLEASE SHUTOFF YOUR CELL PHONES

OPENING PRAYERS Our Father Hail Mary Glory Be

TRANSFER TAXES

BASIC CONCEPTS

TRANSFER TAXES
Tax

on sale of shares Estate taxes Donors taxes

SALES OF SHARES Sale, barter, exchange Not securities dealer Listed and traded in stock exchange

TAX RATE
1/2

of 1% of value Exemption
- IPO

GROSS ESTATE
Filipino or

resident

alien Non-resident alien

FILIPINO OR RESIDENT ALIEN Real property whereever situated Personal property wherever situated

Continuation .

To the extent of the decedents interest existing at the time of death

NON RESIDENT ALIEN Real property situated in Phil. Personal property situated in Phil.

Continuation .

To the extent of the decedents interest existing at the time of death

INCLUDED INTANGIBLE NONRESIDENT ALIEN


Franchise Share, obligations, bonds Shares or rights

RECIPROCITY REGARDING INTANGIBLES

NO INTEREST AT DEATH BUT PART OF ESTATE


Transfer

in contemplation of death

Continuation .

Revocable transfers Property passing under general power of appointment

Continuation .

Transfer for insufficient consideration

TRANSFER IN CONTEMPLATION OF DEATH

Transfer intended to - Take effect in possession or enjoyment - at or after death

Continuation .

Decedent retained for his life or any period not ascertainable w/o reference to death

Continuation .

- The possession or
enjoyment of, the right to income from the property

Continuation .

- The right alone or with


any person to designate the person who shall
o possess, or
o enjoy the prprty/incme

Continuation .

Exception
- Bona fide sale - adequate - full consideration

REVOCABLE TRANSFER Transfer subject to any change at death By decedent alone or with any person

Continuation .

To alter, amend , revoke, or terminate Power relinquished in contemplation of death

Continuation .

Exception
- Bona fide sale - adequate - full consideration

PASSING UNDER GENERAL POWER OF APPOINTMENT General power of appt Exercised by decedent

Continuation ..

In

contemplation of or intended to
- Take effect in possession or enjoyment - at or after death

Continuation .

By deed retained for his life or any period not ascertainable w/o reference to death

Continuation .

- The possession or enjoyment of, the right to income from the property

Continuation .

- The right alone or with


any person to designate the person who shall
o possess, or o enjoy the prprty/incme

Continuation .

Exception
- Bona fide sale - adequate - full consideration

TRANSFERS FOR INSUFFICIENT CONSIDERATION


The

insufficient consideration

EXCLUSIONS
Capital

Exempt acquisitions and transmissions Life insurance

EXEMPT ACQUISITIONS AND TRANSMISSIONS


Merger

of usufruct with naked title

Continuation .

From legatee or fiduciary

heir to fideicommissary From first heir, legatee, donee to another beneficiary

Continuation .

Bequests, devices, legacies or transfers to social welfare, cultural and charitable institutions

LIFE INSURANCE INCLUDED


Decedent took insurance

Beneficiary
- Estate, exectr, admtr, - NOTA, revocable

LIFE INSURANCE EXCLUDED


Others took insurance

Beneficiary not estate, executor, administrator


Decedent took-others

DEDUCTIONS
Filipino

or resident

alien Non-resident alien

DEDUCTIONS: Filipino or resident alien


Expenses, losses, claims, indebtedness and taxes Property previously taxed Transfers for public use

Continuation .

The Family Home Standard deduction Medical expenses Amount received by heirs under R.A. No. 4917 Share in conjugal property

DEDUCTIONS: non-resident alien


Expenses, losses, claims, indebtedness and taxes Property previously taxed Transfers for public use

Continuation .

Share in conjugal property

DEDUCTIBILTY
Non-resident alien - Include in estate return - Value of gross estate not situated in the Philippines

EXPENSES
Funeral expenses Judicial expenses of the testamentary or intestate proceedings

DEDUCTIBILITY
Filipino, res. alien: - Actual funeral expenses,
or 5% of gross estate, not to exceed P200,000

Continuation ..

Non-resident alien: - Proportion which expenses,


losses, bears to total value of entire gross estate
Total expenses ----------------------- X Total expenses = DFE Total gross estate

FUNERAL EXPENSES
Mourning apparel: spouse, unmarried, minor Expenses for the wake Publication for death ads Telecommunications

Continuation .

Cost of burial plot, tombstones, monument or mausoleum but not upkeep Interment and/or cremation fees and charges Other expenses incurred

Continuation .

for the performance of the rites and ceremonies incident to interment

NOT FUNERAL
Expenses incurred after interment: prayers, masses Portion of funeral and burial expenses borne by friends and relatives

JUDICIAL EXPENSES
Inventory taking of assets Administration Payment of debts Distribution of estate among the heirs

EXAMPLES
Fees of executor or administrator Attorneys fees Court fees Accountants fees

Continuation.

Appraisers fees Clerk hire Cost of preserving and distributing the estate Cost of storing or maintaining estate property

Continuation.

Brokerage fees for selling estate property

CLAIMS
Filipino, res. alien: - Against the estate
- Duly notarized instrument - W/in 3 years before death statement of disposition

Continuation ..

Claims of the deceased - Against insolvents - Value included in the gross estate Non-resident alien: - Proportion which claims

Continuation ..

bears to total value of entire gross estate

INDEBTEDNESS
Filipino, res. alien: Unpaid mortgages - Value of interest in the
property undiminished by the mortgage is included in estate

Continuation ...

- Contracted bona fide - Adequate consideration in money Non-resident alien:

- Proportion which indebtedness ,bears to total

Continuation ...

value of entire gross estate

LOSSES
Filipino, res. alien:
- Incurred during estates settlement - Arising from fires, storms, shipwreck, or other casualties,or from theft,

Continuation.

robbery, embezzlement not insured - Not claimed as deduction in ITR - Incurred not later than last day for payment of estate tax

Continuation.

Non-resident alien: - Proportion which loss


bears to value of entire estate

TAXES
DEDUCTIBLE Filipino, res. alien:
- Income tax upon income received before death - Property taxes accrued before death

Continuation.

Non-resident alien: - Proportion which taxes


bear to value of entire estate

NON-DEDUCTIBLE
- Income taxes upon income received after

Continuation.

death - Property taxes accrued after death - Estate taxes

PROPERTY PREVIOUSLY TAXED


An amount equal to the reduction rates Of property part of gross estate

Continuation .

Situated in the Phil. Person who died 5 years prior to the death of the decedent Property identifiable as

Continuation .

received by decedent by gift, bequest, devise,or inheritance or exchange

REDUCTION RATES 100% one year prior 80% not more than 2 years 60% not more than 3 years 40% not more than 4 years 20% not more than 5 years

CONDITIONS
Estate/donors tax paid Value used for determining estate/donors tax Included in gross estate No previous PPT

Continuation .

Deductions for mortgage for estate/donors but paid prior to death, reduce the PPT deduction Two or more items use the aggregate value

Continuation .

Allowable deduction is reduced by amount which bears the same ratio to deductions for expenses, etc., as the amount otherwise deductible for PPT

Continuation .

bears to the total estate.

FORMULA
Value of PPT Less: Mortgage debt paid (1st) First basis Value of gross estate of dec. Less: Expenses,etc. 2nd deduction

Continuation .

First basis Less: 2nd deduction Second basis Multiplied by 100%, 80%, etc. Vanishing deduction

TRANSFERS FOR PUBLIC USE


All bequests, legacies, devices, or transfers For use of the GRP, or any political subdivision

NET SHARE IN CONJUGAL PROPERTY


Net share of survivor Diminished by obligations of the partnership

FAMILY HOME
Filipinos and res. aliens Current market value Not exceeding P1million Certified by the barangay captain of the locality

STANDARD DEDUCTION
Filipinos and res. Aliens P 1 million

MEDICAL EXPENSES
Filipinos and res. Aliens Incurred by decedent One year prior to death Substantiated by receipts Not exceeding P500 K

PROHIBITION ON WITHDRAWAL
Bank with knowledge of death of a person with a bank deposit - alone,or - jointly with another

AUTHORITY FOR WITHDRAWALS


CIR certifies estate taxes paid CIR authorizes up to P20 even if tax not paid

VALUATION
USUFRUCT, ANNUITY - Beneficiarys probable life
- In accordance with the latest Basic Standard Mortality Table

VALUATION
PROPERTY IN GENERAL - Personal - CAFMV
- Real w/ever is higher * BIR FMV = zonal * Assessors value

Continuation .

SHARES OF STOCK - Listed = arithmetic mean


between the highest and lowest quote nearest to death if none, date of death - Not listed * Common = book value * Preferred = par value

NOTICE OF DEATH
Transfers subject tax or Exempt from tax G.V. exceeds P200K Executor, administrator, or any legal heir

Continuation .

Written notice of death


- Within 2 months after decedents death, or - Within 2 months after qualifying as executor or administrator

PLACE OF FILING
Resident register and secure
TIN with RDO of domicile Non-resident with executor RDO executor registered No executor Office of Com
through RDO39-South QC

PAYMENT OF TAXES
At time return filed Extendible for - 5 years judicial - 2 years extrajudicial

LIABILITY FOR TAXES


Primary personal liability
Executor, administrator

Subsidiary liability
Beneficiary

ESTATE PLANNING

DONORS TAX
Excise tax on inter vivos transfers Not on property On trust or otherwise, direct or indirect, etc.

STRANGER 30%
Not brother or sister, spouse, ancestor and lineal descendant Relative by consanguinity w/in 4th degree

EXEMPTIONS
Not over P100 K Dowries up to P10 K Use of Govt. Educational, etc. Political donations

Continuation .

Prizes and awards to athletes - local and intl - held in RP or abroad - sanctioned by N.S.A.

DO NOT
FORGET

YOU COULD BE A BAR TOPNOTCHER

GOOD LUCK !

CONGRATULATIONS

SEE YOU IN COURT !

THANK YOU
AND A GOOD DAY TO ALL