Copyright May 24, 2019

Atty. Sheryl Sollestre-Caballes

Question: How can a person recover the bank deposits left by the deceased?

Republic Act No. 10963 known as the Tax Reform for Acceleration and Inclusion (TRAIN) was
approved on 19 December 2017 and took effect on 01 January 2018. Section 27 of TRAIN Law
amends Section 97 of Republic Act 8424, otherwise known as the National Internal Revenue
Code (NIRC) of 1997.

NIRC vs. TRAIN

Section 97 of the NIRC states:

SEC. 97. Payment of Tax Antecedent to the Transfer of Shares, Bonds or Rights.- There shall not
be transferred to any new owner in the books of any corporation, sociedad anonima, partnership,
business, or industry organized or established in the Philippines any share, obligation, bond or
right by way of gift inter vivos or mortis causa, legacy or inheritance, unless a certification from
the Commissioner that the taxes fixed in this Title and due thereon have been paid is shownIf a
bank has knowledge of the death of a person, who maintained a bank deposit account alone, or
jointly with another, it shall not allow any withdrawal from the said deposit account, unless the
Commissioner has certified that the taxes imposed thereon by this Title have been paid:
Provided, however, That the administrator of the estate or any one (1) of the heirs of the
decedent may, upon authorization by the Commissioner, withdraw an amount not exceeding
Twenty thousand pesos (P20,000) without the said certification.

For this purpose, all withdrawal slips shall contain a statement to the effect that all of the joint
depositors are still living at the time of withdrawal by any one of the joint depositors and such
statement shall be under oath by the said depositors.

The amendment under Section 27 of the TRAIN Law is as follows:

“Sec. 97. Payment of Tax Antecedent to the Transfer of Shares, Bonds or Rights.— x x x.

“If a bank has knowledge of the death of a person, who maintained a bank deposit account alone,
or jointly with another, it shall allow any withdrawal from the said deposit account, subject to a
final withholding tax of six percent (6%). For this purpose, all withdrawal slips shall contain a
statement to the effect that all of the joint depositors are still living at the time of withdrawal by
any one of the joint depositors and such statement shall be under oath by the said depositors.”

Thus, to be able to claim the bank deposits of the deceased person, first look at the date of death
to determine which law shall apply.

If the person who owns the bank account died prior to 01 January 2018, the NIRC shall apply. If
the death occured on or after 01 January 2018, the TRAIN Law shall be applicable.

How to recover deposits under the TRAIN LAW

Copyright May 24, 2019
Atty. Sheryl Sollestre-Caballes

BIR Revenue Memorandum Circular No. 62-2018 has the answer. The circular provides that the
"executor, administrator, or any of the legal heir/s of a decedent who, prior to death, maintained
bank deposit/s may be allowed withdrawal from the said bank deposit account/s within 1 year
form the date of death of the depositor/joint depositor but the amount withdrawn shall be subject
to 6% final withholding tax."

Paragraphs 3 and 4 of the Circular stated further:

"3. Prior to such withdrawal. the Bank shall require the executor, administrator, or any of the
legal heir/s withdrawing from the deposit account to present a copy of the Tax Identification
Number (TIN) of the estate of the decedent and BIR Form No. 1904 of the estate, duly stamped
received by the concerned Revenue District Office (RDO) of the Bureau of Internal Revenue in
accordance with the existing guidelines on the issuance of TIN:

4. The bank shall issue the corresponding BIR Form No. 2306 certifying the withholding of six
percent (6%) final tax...."

To simplify:

If the deceased died after 01 January 2018, Section 27 of the TRAIN Law which amends section
97 of the NIRC shall apply.

For this purpose, the executor, administrator, or any of the legal heir/s can file a claim with the
bank to withdraw the amount on the deposit accounts. The bank will allow such withdrawal upon
the presentation of its required documents (ask the bank for the list of requirements) and upon
the presentation of BIR Form 1904 with the estate tax number the estate of the deceased.

The bank shall issue withdrawal slips for the executor, administrator, legal heir, to sign which
shall include a statement that deposits withdrawn is subject the 6% final withholding tax.

Thereafter, the amount net of final tax can be withdrawn and the proceeds given to the proper
party.