Professional Documents
Culture Documents
TAXATION
UNIVERSITY OF SAN JOSE-RECOLETOS
Second Semester 2014
ATTY. GERALD R. YU, CPA, CRB
FUNDAMENTALS
Estate Taxation
TRANSFER TAXATION
A. TRANSFER TAXES
Taxes imposed upon the gratuitous disposition of property, whether real or personal,
tangible or intangible.
Also called excise or privilege taxes. They are not property taxes because their
imposition does not rest upon general ownership but rather considered as privilege
taxes imposed on the act of pasing ownership of property. dada
B. Types of Transfers:
Onerous refers to the exchange of property for a monetary consideration or a
transfer of goods or services in return for something of equal value like in sales or
barter.
Gratuitous a conveyance of property without any consideration involved in
exchange for the property given away. It is a transfer of property for FREE because
there is no financial consideration or no performance of service as payment for the
transfer of property.
ONEROUS
GRATUITOUS
Normal Course of
Business (Sale or
Exchange)
Casual Transfer
CGT
TRANSFER TAXES
FACT OF DEATH
ESTATE TAX
DONATION
DONORS TAX
GRATUITOUS TRANSFERS IN
GENERAL
SUBJECT TO
DONORS TAX
DONATION INTER
VIVOS
EFFECTIVITYDURING LIFETIME OF
DONOR
GRATUITOUS
TRANSFERS
TESTAMENTARY
DONATION MORTIS
CAUSA
SUBJECT TO ESTATE
TAX & EFFECTIVITY
UPON DEATH OF
PROPERTY OWNER
INTESTATE
ESTATE TAX
A. ESTATE TAX tax on the right to transmit property at death and on certain
transfers by the decedent during his lifetime which are made by the law
the equivalent of testamentary dispositions. The tax is measured by the
value of the property at the time of death.
B. INHERITANCE TAX tax on the privilege of inheriting the property of a
person upon his death. A tax imposed on the legal right or privilege to
succeed to, receive or take property by or under a will, intestacy law, or
deed, grant or gift becoming operative at or after death. (Lorenzo v.
Posadas, 64 Phil. 353; 85 C.J.S. 844-845.)
It is also referred to as Succession Tax of Duty or Legacy Tax.
Sometimes used in a general sense as including estate tax.
3.
4.
5.
APPLICABLE LAW
It is well-settled that estate (or inheritance) taxation is governed by the
statute in force at the time of the death of the decedent.
The taxpayer cannot foresee and ought not to be required to guess the
outcome of pending legislative bills or measures.
Tax may be retroactive in its operation. But legislative intent that a tax
statute should operate retroactively should be perfectly clear.
Donors Tax
Estate Tax
1. Effectivity of transfer of
property
2. Taxpayer
The Donor
3. Tax Base
Net Gift
Net Estate
4. Exempt Amount
2. Being testamentary in nature, should be embodied in a last will and testament. It is not a
contract unlike a donation inter vivos. It is in reality a legacy. If not embodied in a valid will, the
donation is void. (Puig v. Peaflorida, 15 SCRA 216 [1965]).
6. Acceptance is a requirement.
GROSS ESTATE
COMPOSITION
A. Consists of the totality of the value of all property of the decedent at the time of
his death, whether real or personal, tangible or intangible. (Blas v. Santos, 29
March 1961, 1 SCRA 914)
B. It shall not include the separate (exclusive) properties of the surviving spouse.
C. The gross estate of a decedent shall be comprised of the following properties and
interest therein AT THE TIME OF HIS DEATH, including:
1)
2)
3)
4)
5)
6)
7)
Decedents interest
Transfers in contemplation of death
Revocable transfers
Property passing under general power of appointment
Proceeds of life insurance
Prior Interests
Transfers for insufficient consideration.
CLASSIFICATION OF DECEDENTS
RESIDENT
NONRESIDENT
RESIDENT
NON-RESIDENT
CITIZEN
DECEDENT
ALIEN
SUMMARY OF PROPERTIES
INCLUDED IN THE GROSS ESTATE
PARTICULARS
CITIZEN/RESIDENT ALIEN
NONRESIDENT ALIEN
Particulars
Citizen/Resident Alien
Nonresident Alien
8. Shares or rights in
partnership business or industry
established in the Phils.
4. Franchise exercised
Unlisted common shares should be valued at book value at the date of death;
Unlisted preferred shares are valued at par value.
Revocable transfers;
Transfers in contemplation of death
Property passing under general power of appointment
Transfers for insufficient consideration.
2. Others:
a.
b.
c.
d.
1.
2.
C.
D.
E.
F.
G.
A.
B.
A.
B.
C.
Benefits received from SSS (PD 1161, as amended) or GSIS (PD 1146, as amended)
Benefits received from US Veterans Administration (RA 360)
War benefits given by the Philippine government and US government due to damages suffered
during the war (RA 227)
Grants and donations to the Intramuros Administration. (PD 1616)
D.
CONJUGAL PARTNERSHIP
ABSOLUTE COMMUNITY
1. Property inherited or
received as donation during
marriage
Exclusive
Exclusive
Conjugal
Community
Conjugal
Community
Conjugal
Community
Conjugal Partnership
Absolute Community
Exclusive
Community
Conjugal
Exclusive