TAXATION | ESTATE TAXESTATE TAXA. ESTATE TAX 1. Taxpayer and Tax Base The estate tax is imposed on the transfer of the decedent’s estate to his lawful heirs and beneficiaries based on the fair market value of the net estate at the time of the decedent’s death. It is not a tax on property. It is a tax imposed on the privilege of transmitting property upon the death of the owner. The estate tax is based on the laws in force at the time of death notwithstanding the postponement of the actual possession or enjoyment of the estate by the beneficiary. 2. Computation of Net Estatea. Gross estate- The value of the gross estate of the decedent includes the value at the time of his deathof all property, real or personal, tangible or intangible, wherever situated.In the case of a nonresident decedent who at the time of his death was not a citizen of the Philippines, only that part of the entire gross estate situated in the Philippines is included in the taxable estate.1Gross estate includes property falling under any of the following categories: (1) Decedent’s interest, to the extent of his interest therein at the time of his death; (2) Transfers in contemplation of death; (3) Revocable transfers; (4) Property passing under general power of appointment; (5) Proceeds of life insurance; (6) Prior interests; and (7) Transfer for insufficient consideration. The following are excluded from the gross estate: (1) GSIS proceeds/ benefits(2) Accruals from SSS (3) Proceeds of life insurance where the beneficiary is irrevocably appointed (4) Proceeds of life insurance under a group insurance taken by employer (not taken out upon his life) (5)War damage payments (6) Transfer by way of bona fide sales (7) Transfer of property to the National Government or to any of its political subdivisions (8) Separate property of the surviving spouse (9) Merger of usufruct in the owner of the naked title (10) Properties held in trust by the decedent (11) Acquisition and/or transfer expressly declared as not taxable 1 No estate tax shall be collected in respect of intangible personal property if (a) the decedent at the time of death was a citizen and resident ofa foreign country which did not impose a transfer tax of any character, in respect of intangible personal property of citizens of the Philippinesnot residing in that foreign country; or (b) if the laws of the foreign country of which the decedent was a citizen or resident allows a similarexemption from transfer or death taxes of every character in respect of intangible personal property owned by citizens of the Philippines notresiding in that foreign country. (Sec. 104, NIRC).
TAXATION | ESTATE TAX(12) Personal Equity and Retirement Account (PERA) assets of the decedent-contributor.2b. Net estateThe net estate is determined by deducting from the value3of gross estate the total amount of allowable deductions.
You've reached the end of your free preview.
Want to read all 15 pages?
- Fall '19
- Taxation in the United States, Gross Estate