Tax rates (BEFORE)

If net Taxable Of the excess

estate is over But not over Tax shall be Plus over
P 200,000 Exempt
P 200,000 500,000 0 5% P 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
 (Now)

“SEC. 84. Rate of Estate Tax. – There shall be

If net Taxable Of the excess
estate is over But not over Tax shall be Plus over
levied, assessed, collected and paid upon the
P 200,000 Exempt
transfer
P 200,000
of the net
500,000
estate as
0
determined
5%
in P 200,000
accordance
500,000
with Sections%15,000
2,000,000
85 and 868%of every500,000
decedent,
2,000,000 whether
5,000,000 resident
135,000or nonresident
11% of
2,000,000
the5,000,000
Philippines, a tax at the
10,000,000 rate of six
465,000 15% percent5,000,000
(6%) based onand
10,000,000 theovervalue 1,215,000
of such net20% estate.”10,000,000
 If net Taxable Of the excess
estate is over But not over Tax shall be Plus over
Illustration: P 200,000 Exempt
Mr.P 200,000
F died leaving a net taxable0 estate of 5%
500,000 P 13,000,000.
P 200,000
The500,000
estate tax is2,000,000
P 780,000. %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
13,000,000 x 6% = 780,000
10,000,000 and over 1,215,000 20% 10,000,000
The net estate subject to tax or net
taxable estate is the basis for the
computation of estate tax. Pro forma
computation:
GROSS ESTATE
LESS: DEDUCTIONS
NET TAXABLE ESTATE
Illustration: Mr. J died single and a resident citizen of the Philippines.
His property:
If net Taxable
*Family Home : P 625,000 (FMV) Of the excess
estate is*Cash
over in Bank:
But not over Tax shall be
P 1,437,000 Plus over
Actual Funeral Expense: P 62,500 Exempt
P 200,000
P 200,000
Family Home: 500,000
625,000 0 5% P 200,000
%
Cash In Bank:
500,000 1,437,000 15,000
2,000,000 8% 500,000
Gross Estate: P 2,602,500
2,000,000 5,000,000 135,000 11% 2,000,000
5,000,000 10,000,000 465,000 15% 5,000,000
Gross Estate is less than 5,000,000 therefore, exempt.
10,000,000 and over 1,215,000 20% 10,000,000
Illustration: Mr. J died single and a resident citizen of the Philippines.
His property:
If net Taxable
*Family Home : P 625,000 (FMV) Of the excess
estate is*Cash
over in Bank:
But not over Tax shall be
P6,000,000 Plus over
Actual Funeral Expense: P 62,500 Exempt
P 200,000
P 200,000
Gross Estate: 500,000 0 5%
6,625,000 P 200,000
%
500,000
Less: 2,000,000
Special Deduction 15,000 8% 500,000
Standard Deduction
2,000,000 5,000,000 5,000,000
135,000 11% 2,000,000
Family Home 625,000 5,625,000
5,000,000 10,000,000 465,000 15% 5,000,000
Nex Taxable Estate 1,000,000
10,000,000 and over 1,215,000 x 20% 6% 10,000,000
Estate Tax 60,000
- Resident Citizen
- His
If net gross
Taxable estate shall consist of all his propertyOf the excess
estate is over But not over Tax shall be Plus over
wherever situated.
P 200,000 Exempt
P 200,000 500,000 0 5% P 200,000
If the decedent
500,000
were
2,000,000
a resident
%
15,000
alien,
8%
same 500,000
computations
2,000,000
shall apply
5,000,000
because 11%
135,000
of resident
2,000,000
alien estate is
5,000,000 subject to465,000
10,000,000 estate tax15% in the same
5,000,000
manner
10,000,000 as a resident
and over citizen
1,215,000 estate.
20% 10,000,000
Mr. J, a citizen of the Philippines, single, died a resident of the United States
leaving the following property:
If net
Real Taxable in the US, inherited from the father 1 and a half yearOf
Property the excess
ago
estate is over But not over Tax shall be Plus 5,000,000over
Personal Property inPthe Phil. InheritedExempt
200,000 from the father 1,600,000
Family Home in US 1,400,000
P 200,000 500,000 0 5% P 200,000
%
Expenses and obligations
500,000 are being claimed:
2,000,000 15,000 8% 500,000
2,000,000 5,000,000 135,000 11% 2,000,000
Actual funeral expenses paid in the US 100,000
5,000,000
Other 10,000,000within the
Obligations contracted 465,000
last two years 15% 250,0005,000,000
Standard Deduction and over
10,000,000 1,215,000 20% 5,000,000
10,000,000
Gross Estate: 8,000,000
Less: Ordinary Deductions
If net Taxable Of the excess
estate is Other
over Obligation
But not over 250,000
Tax shall be Plus over
Vanishing Deduction 1,240,000 1,490,000
Special Deductions: P 200,000 Exempt
standard deductions:
P 200,000 500,000 0 5,000,000
5% P 200,000
Total Deductions: % 6,490,000
500,000 2,000,000 15,000 8% 500,000
Net Taxable Estate: 1,510,000 x 6%
2,000,000
Estate Tax: 5,000,000 135,000 11% 90,6002,000,000
5,000,000 10,000,000 465,000 15% 5,000,000
10,000,000 and over 1,215,000 20% 10,000,000
*Vanishing Deduction: 3. Initial Basis
1. Value taken of PPT P 1,600,000
If net Taxable
P1,600,000 Less: 2nd Deduction: Of the excess
estate
Less: isMortgage
over But not over
debt Tax shall be Plus over
50,000
0 P 200,000 ExemptFinal Basis
Initial Basis 1,550,000
P 200,000 500,000 0 5% P 200,000
P1,600,000 % Multiply by percentage of ded:
500,000 2,000,000 15,000 80% 8% 500,000
2. Vanishing Deduction:
2,000,000 𝐼𝑛𝑖𝑡𝑖𝑎𝑙 𝐵𝑎𝑠𝑖𝑠
5,000,000 135,000 11% 2,000,000
× 1,240,000
𝑉𝑎𝑙𝑢𝑒 𝑜𝑓 𝐺𝑟𝑜𝑠𝑠 𝐸𝑠𝑡𝑎𝑡𝑒 𝑜𝑓
5,000,000 𝑝𝑟𝑒𝑠𝑒𝑛𝑡 𝐷𝑒𝑐𝑒𝑑𝑒𝑛𝑡 465,000
10,000,000 15% 5,000,000
𝐸𝑥𝑝𝑒𝑛𝑠𝑒𝑠, 𝑒𝑡𝑐. 𝑎𝑛𝑑 𝑡𝑟𝑎𝑛𝑠𝑓𝑒𝑟 𝑓𝑜𝑟 𝑝𝑢𝑏𝑙𝑖𝑐 𝑝𝑢𝑟𝑝𝑜𝑠𝑒
10,000,000
1,600,000 and over 1,215,000 20% 10,000,000
× 250,000 = 50,000
8,000,000
- Non-resident citizen
- His
If net gross
Taxable estate shall consist of all his property Of the excess
estate is over But not over Tax shall be Plus over
wherever situated.
P 200,000 Exempt
The percentage500,000
P 200,000 taken to compute
0 vanishing
5% deduction
P 200,000
%
on500,000
the inherited personal
2,000,000 property
15,000 in the8%Philippines is
500,000
80% because the
2,000,000 time interval
5,000,000 between11%
135,000 the two deaths
2,000,000
was more than10,000,000
5,000,000 one year but465,000
less than 2 15%
years. 5,000,000
10,000,000 and over 1,215,000 20% 10,000,000
Mr. J, a citizen and resident of Brisbane, Australia died leaving property and
obligations in Australia and in the Philippines. Data on his property and
obligations follow:
If net Taxable Of the excess
Property in Australia 10,000,000
estate is over But not over Tax shall be Plus over
Property in the Philippines 10,000,000
Funeral expenses in Australia Exempt
P 200,000 250,000
Unpaid obligations
P 200,000 in Australia
500,000 0 700,000
5% P 200,000
Gross Estate: %
500,000 2,000,000 15,000 8% 500,000
Property in the Philippines 10,000,000
Less: Deductions 5,000,000
2,000,000 135,000 11% 2,000,000
10,000,000
× 700,000 10,000,000
5,000,000
= 175,000 465,000 15% 5,000,000
20,000,000
Standard Deduction 500,000 675,000
10,000,000 and over 1,215,000 20% 10,000,000
Nex Taxable Estate 9,325,000
x 6%
Estate Tax 559,500
Non-resident Alien
- Only his property situated in the Philippines shall
If net Taxable Of theform
excess
estate is over But not over
part of his gross estate Tax shall be Plus over
P 200,000 Exempt
P 200,000 500,000 0 5% P 200,000
Standard
500,000
Deduction.
2,000,000
– An
% amount equivalent to
15,000 8% 500,000
Five hundred5,000,000
2,000,000
thousand 135,000
pesos (P500,000).
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