Estate Tax Summary

Index for Estate Tax:

 Description
 Tax Form
 Documentary Requirements
 Tax Rates
 Procedures
 Related Revenue Issuances
 Codal Reference
 Frequently Asked Questions

Description

Estate Tax is a tax on the right of the deceased person to transmit

his/her estate to his/her lawful heirs and beneficiaries at the time of
death and on certain transfers, which are made by law as equivalent to
testamentary disposition. 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.

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Tax Form

BIR Form 1801 - Estate Tax Return

Guidelines

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Documentary Requirements

Mandatory Requirements [additional two (2) photocopies of each

document]:

1. Certified true copy of the Death Certificate;

2. Taxpayer Identification Number (TIN) of decedent and heir/s;
3. Notice of Death (only for death prior to January 1, 2018) duly
received by the BIR, if gross taxable estate exceeds P20,000 for
deaths occurring on January 1, 1998 up to December 31, 2017; or
if the gross taxable estate exceeds P3,000 for deaths occurring
prior to January 1, 1998;
4. Any of the following: a) Affidavit of Self Adjudication; b) Deed of
Extra-Judicial Settlement of the Estate, if the estate has been
settled extra-judicially; c) Court order if settled judicially; d)
Sworn Declaration of all properties of the Estate;
5. A certified copy of the schedule of partition and the order of the
court approving the same within thirty (30) days after the
promulgation of such order, in case of judicial settlement;
6. Proof of Claimed Tax Credit, if applicable;
7. Certified Public Accountant (CPA) Statement on the itemized
assets of the decedent, itemized deductions from gross estate
and the amount due if the gross value of the estate exceeds five
million pesos (Php5,000,000.00) for decedent’s death on or after
January 1, 2018 or two million pesos (Php2,000,000.00) for
decedent’s death from January 1, 1998 to December 31, 2017;
8. Certification of the Barangay Captain for the claimed Family
Home (If the family home is conjugal property and does not
exceed Php10 Million, the allowable deduction is one-half (1/2) of
the amount only);
9. Duly Notarized Promissory Note for "Claims Against the Estate"
arising from Contract of Loan;
10. Accounting of the proceeds of loan contracted within three
(3) years prior to death of the decedent;
11. Proof of the claimed "Property Previously Taxed";
12. Proof of the claimed "Transfer for Public Use";
13. Copy of Tax Debit Memo used as payment, if applicable;

For Real Properties, if any [additional two (2) photocopies of each

document]:
 1. Certified true copy/ies of the Transfer/Original/Condominium
Certificate/s of Title of real property/ies (front and back pages), if
applicable;
2. Certified true copy of the Tax Declaration of real properties at
the time of death, if applicable;
3. Certificate of No Improvement issued by the Assessor's Office
where declared properties have no improvement

For Personal Properties, if any [additional two (2) photocopies of each

document]:

1. Certificate of Deposit/Investment/Indebtedness owned by the

decedent and the surviving spouse, if applicable;
2. Photocopy of Certificate of Registration of vehicles and other
proofs showing the correct value of the same, if applicable;
3. Proof of valuation of shares of stock at the time of death, if
applicable;

1. For shares of stocks not listed/not traded - Latest Audited

Financial Statement of the issuing corporation with computation
of the book value per share
2. For shares of stocks listed/traded - Price index from the
Philippine Stock Exchange (PSE) /latest Fair Market Value (FMV)
published in the newspaper at the time of transaction
3. For club shares - Price published in newspapers on the
transaction date or nearest to the transaction date

4. Photocopy of Certificate of stocks, if applicable;

5. Proof of valuation of other types of personal property, if
applicable;

Other Additional Requirements, if applicable:

 Special Power of Attorney (SPA), if the person

transacting/processing the transfer is not a party to the
transaction and/or Sworn Statement if one of the heirs is
designated as executor/administrator;
 Certification from the Philippine Consulate if document is
executed abroad
 Location Plan/Vicinity map issued by the Local Assessor’s Office
if zonal value cannot be readily determined from the documents
submitted
  Certificate of Exemption/BIR Ruling issued by the Commissioner
of Internal Revenue or his authorized representative, if tax
exempt
 BIR-approved request for installment payment of Estate tax due
 BIR-approved request for partial disposition of Estate
 Such other documents as may be required by
law/rulings/regulations/etc.

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Tax Rates

(The rate applicable shall be based on the law prevailing at the time of
decedent’s death)

 Effective January 1, 2018 to present [Republic Act (RA) No.

10963]

There shall be an imposed rate of six percent (6%) based on the value
of such NET ESTATE determined as of the time of death of decedent
composed of all properties, real or personal, tangible or intangible less
allowable deductions.

 Effective January 1, 1998 up to December 31, 2017 (RA No. 8424)

If the Net Estate is

Over But not Over The Tax Shall be Plus

  P   200,000.00 Exempt    
P   200,000.00      500,000.00 0 5% P 
     500,000.00   2,000,000.00 P   15,000.00 8%   
  2,000,000.00   5,000,000.00    135,000.00 11%  2
  5,000,000.00 10,000,000.00    465,000.00 15%  5
10,000,000.00   1,215,000.00 20% 10
 Effective July 28, 1992 up to December 31, 1997 (Section 77 of
the NIRC, as amended (RA No. 7499)

If the Net Estate is

Over But not Over The Tax Shall be Plus

  P   200,000.00 Exempt    
P  200,000.00      500,000.00   5% P 
    500,000.00   2,000,000.00 P   15,000.00 8%   
 2,000,000.00   5,000,000.00    135,000.00 12%  2
 5,000,000.00 10,000,000.00    495,000.00 21%  5
10,000,000.00   1,545,000.00 35% 10
 Effective January 1, 1973 to July 27, 1992 (Section 85 of the
NIRC, as amended (Presidential Decree No. 69)

If the Net Estate is

Over But not Over The Tax Shall be Plus

  P   10,000.00 Exempt - -
P   10,000.00      50,000.00 3% - P 
     50,000.00      75,000.00 P     1,200.00 4%   
     75,000.00    100,000.00        2,200.00 5%   
   100,000.00    150,000.00        3,450.00 10%   
   150,000.00    200,000.00        8,450.00 15%   
   200,000.00    300,000.00      15,950.00 20%   
   300,000.00    400,000.00      35,950.00 25%   
   400,000.00    500,000.00      60,950.00 30%   
   500,000.00    625,000.00      90,950.00 35%   
   625,000.00    750,000.00    134,700.00 40%   
   750,000.00    875,000.00    184,700.00 45%   
   875,000.00 1,000,000.00    240,950.00 50%   
1,000,000.00 2,000,000.00    303,450.00 53% 1,0
2,000,000.00 3,000,000.00    833,450.00 56% 2,0
3,000,000.00 - 1,393,450.00 60% 3,0
 Effective September 15, 1950 to December 31, 1972 (Section 85
of the NIRC, as amended (RA No. 579)

Estate and Inheritance Tax

If the Net Estate is

Over But not Over ESTATE

0        5,000.00 Exempt Ex
       5,000.00      12,000.00 1.00% 2%
     12,000.00      30,000.00 2.00% 4%
     30,000.00      50,000.00 2.50% 6%
     50,000.00      70,000.00 3.00% 8%
     70,000.00    100,000.00 5.00% 12
   100,000.00    150,000.00 7.00% 14
   150,000.00    250,000.00 9.00% 16
   250,000.00    500,000.00 11.00% 18
   500,000.00 1,000,000.00 13% 20
1,000,000.00   15% 22
 Effective July 1, 1939 to September 14, 1950 (Section 85 of the
NIRC, as amended (Commonwealth Act No. 466)

Estate and Inheritance Tax

If the Net Estate is

Over But not Over ESTATE

0 3000 Exempt
1.0
       3,000.00      10,000.00 1.00%
     10,000.00      30,000.00 1.50% 2.0
     30,000.00      50,000.00 2.00% 3.0
     50,000.00      80,000.00 2.50% 4.0
     80,000.00    110,000.00 3.00% 5.0
   110,000.00    150,000.00 3.50% 6.0
   150,000.00    190,000.00 4.00% 7.0
   190,000.00    240,000.00 4.50% 8.0
   240,000.00    290,000.00 5.00% 9.0
   290,000.00    350,000.00 5.50% 10
   350,000.00    420,000.00 6.00% 11
   420,000.00    500,000.00 6.50% 12
   500,000.00    600,000.00 7.00% 13
   600,000.00    720,000.00 7.50% 14
   720,000.00    850,000.00 8.00% 15
   850,000.00 1,000,000.00 8.50% 16
1,000,000.00 1,200,000.00 9.00% 17
1,200,000.00 1,500,000.00 9.50% 17
1,500,000.00   10.00% 17

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Procedures

 Who Shall File

The Estate Tax Return (BIR Form 1801) shall be filed in triplicate by:

1. The executor, or administrator, or any of the legal heir/s of the

decedent, whether resident or non-resident of the Philippines, under
any of the following situations:
a. In all cases of transfers subject to estate tax;
b. Regardless of the gross value of the estate, where the said estate
consists of registered or registrable property such as real property,
motor vehicle, shares of stock or other similar property for which a
clearance from the BIR is required as a condition precedent for the
transfer of ownership thereof in the name of the transferee; or

2. If there is no executor or administrator appointed, qualified, and

acting within the Philippines, then any person in actual or constructive
possession of any property of the decedent.

Taxpayers who are filing BIR Form 1801 are excluded in the mandatory
coverage from using the eBlRForms (Section 2 of RR No. 9-2016)

 When and Where to File and Pay

The Estate Tax Return (BIR Form 1801) shall be filed within one (1)
year from the decedent's death.  In meritorious cases, the
Commissioner shall have the authority to grant a reasonable extension
not exceeding thirty (30) days for filing the return.

The return shall be filed with any Authorized Agent Bank (AAB) of the
Revenue District Office (RDO) having jurisdiction over the place of
domicile of the decedent at the time of his death. If the decedent has
no legal residence in the Philippines, the return shall be filed with the
Office of the Commissioner (RDO No. 39, South Quezon City).

In case of a non-resident decedent with executor or administrator in

the Philippines, the return shall be filed with the AAB of the RDO where
such executor/administrator is registered or is domiciled, if not yet
registered with the BIR.

When the return is filed with an AAB, taxpayer must accomplish and
submit BIR-prescribed deposit slip, which the bank teller shall
machine validate as evidence that payment was received by the AAB.
The AAB receiving the tax return shall stamp mark the word
“Received’’ on the return and also machine validate the return as proof
of filing the return and payment of the tax by the taxpayer,
respectively. The machine validation shall reflect the date of payment,
amount paid and transaction code, the name of the bank, branch code,
teller’s code and teller’s initial. Bank debit memo number and date
should be indicated in the return for taxpayers paying under the bank
debit system.

Payments may also be made thru the epayment channels of AABs thru
either their online facility, credit/debit/prepaid cards, and mobile
payments.

In case the available cash of the estate is insufficient to pay the total
estate tax due, payment by installment shall be allowed within two (2)
years from the statutory date for its payment without civil penalty and
interest upon approved by the concerned BIR Official.

The due date on filing and payment of the return/tax shall depend on
the applicable law at the time of the decedent’s death.

 Extension to File and Pay

When the Commissioner of Internal Revenue finds that the payment on

the due date of the estate tax or of any part thereof would impose
undue hardship upon the estate or any of the heirs, he may extend the
time for payment of such tax or any part thereof not to exceed five (5)
years, in case the estate is settled through the courts, or two (2) years
in case the estate is settled extra-judicially. In such case, the amount
in respect of which the extension is granted shall be paid on or before
the date of the expiration of the period of the extension, and the
running of the Statute of Limitations for assessment as provided in
Section 203 of the National Internal Revenue Code shall be suspended
for the period of any such extension.

Where the taxes are assessed by reason of negligence, intentional

disregard of rules and regulations, or fraud on the part of the taxpayer,
no extension will be granted by the Commissioner.

If an extension is granted, the Commissioner of Internal Revenue or his

duly authorized representative may require the executor, or
administrator, or beneficiary, as the case may be, to furnish a bond in
such amount, not exceeding double the amount of tax and with such
sureties as the Commissioner deems necessary, conditioned upon the
payment of the said tax in accordance in the terms of extension.
The application for extension of time to file the estate tax return must
be filed with the Revenue District Officer (RDO) where the estate is
required to secure its Taxpayer Identification Number (TIN) and file
the tax returns of the estate. The application shall be approved by the
Commissioner or his duly authorized representative.

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Related Revenue Issuances

Revenue Regulations (RR) Nos. 2-2003, 6-2013, 6-2014; 12-2018

Revenue Memorandum Order (RMO) Nos. 26-82, 31-82, 15-2003; 35-
2018
Revenue Memorandum Circular (RMC) Nos. 1-98, 34-2013
OPM-AS-APMD 2017-06-06
OPM-AS-APMD 2017-06-01

Related Laws

Commonwealth Act No. 466 – effective July 1, 1939

Republic Act No. 579 – effective September 15, 1950
Republic Act No. 6110 – effective August 4, 1969
Presidential Decree No. 69 – effective January 1, 1973
Presidential Decree No. 1773 – effective January 16, 1981
Presidential Decree No. 1994 – effective January 1, 1986
Republic Act No. 7499 – effective July 28, 1992|
Republic Act No. 8424 – effective January 1, 1998
Republic Act No. 10963 – effective January 1, 2018