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REPUBLIC OF THE PHILIPPINES

DEPARTMENT OF FINANCE
BUREAU OF INTERNAL REVENUE
Quezon City

Secs.

Person to Contact: Chief, Law Division

Tel. Nos. 926-55-361 927 -09-63

I 000-00

24(DX1),

188

&

Tax

196

Code

of 1997,

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as

amended

BALGOS GUMARU & JALANDONI LAW OFFICES

1009 West Tower, PSE Center
Exchange Road, Ortigas Center
Pasig City 1605

Attention: Andrea A. Perez

Gentlemen:

This refers to your letter dated June 6, 201I, requesting on behalf of your
client, Mrs. AngelaPerez Ellis (Mrs. Ellis), for a confirmation of your opinion that the
conveyance of the title of the property to the trustor from the trustee is not subject to
the capital gains tax imposed under Section 24 (D) (1) of the Tax Code of 1997,as
amended.

It is represented

that sometime in June 1987, Mrs. Ellis, a Natural Born

an Australian, was a flight attendant of Cathay Pacific Airways
and residing in Hong Kong when she decided on buying a house and lot in Barrio
Kapitolyo, Pasig City; that the subject house and lot was covered by Transfer
Certificate of Title (TCT) No. 7537 of the Register of Deeds of Metro Manila District
II; that the subject property was owned by Spouses Virgilio A. Rojales and Noemi N.
Rojales who were then preparing to migrate to the United States of America (USA)
and were in a hurry to dispose of the property; that Mrs. Ellis not wanting to lose the
chance of acquiring the property, asked her unmdrried sister, Adela M. Perez, to buy
the property for her; that to facilitate the consummation and registration of the sale, it
wasdecided that the property be acquired by her sister, Adela M. Perez, in her name
with all the funds coming from Mrs. Ellis; that to show that the property in fact really
belongs to Mrs. Ellis, Adela M. Perez executed in October 1987 a Declaration of
Trust and Acknowledgment, whereby she acknowledged that she was just holding the

Filipino Citizen but

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Mrs. Angela Perez Ellis

Page.2 of 2

property she bought in trust for her sister, Mrs. Ellis; that said document was
authenticated before Notary Public Mariano Balgua of Manila on October 10, 7987
and registered in his Notarial Book as Document No. 165, Page No. 52, Book No. III,
Series of 1987 but not annotated in the title; and that pursuant to the commitment of
Adela M. Perez, she executed a Deed of Conveyance dated April 15, 201 1 so that the
title thereto can be transferred to its real owner, Mrs. Angela Perez Ellis.
Attached to Records is an Affidavit from Mariano Balgua acknowledging that
he notarized a document denominated as "Declaration of Trust and Acknowledgment"
executed by Adela Munoz Perez on October 20, 1987, registered in his Notarial Book
as Document No. 165, Page No. 52, Book No. III, Series of 1987and cerlified true
copy of page 52 of the loose leaf which contain the entries of the document.

In reply, please be informed that since the transfer of the subject property by
Adela M. Perez as the Trustee in favor of Mrs. Angela Perez Ellis, as the true and
beneficial owner is.without monetary consideration and is merely a confirmation of
title in favor of the beneficial owner thereof, the same is not subject to the capital
gains tax imposed under Section 24 (D) ( 1 ) of the Tax Code of 1997 , as amended.
Fufthermore, the said conveyance of the real property is not likewise subject
to the documentary stamp tax imposed under Section 196 of the Tax Code of 1997.
However, the notarial acknowledgment to the said deed is subject to the documentary
stamp tax of P15.00 pursuant to Section 188 of the said Code.

will

authorize the Revenue District Officer (RDO) of the revenue district

where the subject property is located to issue the corresponding Tax Clearance
Certificate/Certificate Authorizing Registration with regard to the transfer by Adela
M. Perez of the above-stated property in favor of Mrs. Angela Perez Ellis without
need of presentation of proof of payment of the capital gains tax and documentary
stamp tax.

This

This ruling is being issued on the basis of the foregoing facts as represented.
However, if upon investigation it will be disclosed that the facts are different, then
this ruling shall be considered null and void.
Very truly yours,

KIM S. JA
O-HENARES
Commissionbr f Internal Revenue
K- 1-JRC

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