The executor, administrator, or any of the legal heirs shall send a written

notice of death to the Commissioner if :

1. Gross transfer is subject to estate tax, or
2. Gross estate exceeds P20,000
The filing of notice of death shall be made within 2 months after the
decedent’s death.

Under TRAIN Law, this requirement is repealed.

A return must be filed by the executor, administrator, or any of the legal heirs
on the following cases:
1. in all cases of transfers subject to tax;
2. exempt transfers where the gross value of the estate exceeds P200,000;
or
3. transfers regardless of gross value, where the 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 prerequisite for the transfer of ownership thereof in
the name of the transferee.
Normally, the return shall contain the following:
1. Value of the gross estate of the decedent at the time of death.
2. Deductions allowed.
3. Other information as may be necessary to establish the correct taxes.

If the return shows that the gross value of the estate exceeds
P2,000,000(Under TRAIN Law : P5M), a statement duly certified by a CPA
containing the following is required:
1. Itemized assets of the decedent with their corresponding gross value at
the time of his death.
2. Itemized deductions from gross estate allowed.
3. Amount of tax due whether paid or still due and outstanding.
  Time for Filing Estate Tax Return
- The return shall be filed within 6 months from the decedent’s
death.(Under TRAIN Law: 1 yr.)

 Extension of Time to File Estate Tax Return

- In meritorious cases, a reasonable extension for filing the return,
not exceeding 30 days shall be granted by the BIR Commissioner or any
authorized Revenue Officer.
  Place of Filing the Return and Payment of the Tax
Resident Decedent
The heirs/authorized representative/administrator/executor shall register the estate of the
decedent and secure a new TIN therefor from the RDO where the decedent was domiciled at the time
of his death and shall file the estate tax return and pay the corresponding estate tax with the:
1. Accredited Agent Bank (AAB)
2. Revenue Collection Officer (RCO)
3. Duly authorized Treasurer of the city or municipality in the RDO having jurisdiction over the place
of domicile of the decedent at the time of his death.

Non-Resident Decedent
 With an executor or administrator in the Philippines – the estate tax 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.
 With no executor or administrator in the Philippines – the estate tax return shall be filed with an
AAB under the jurisdiction of RDO 39-South Quezon City.
  Time for Payment of the Estate Tax
- The estate tax shall also be paid at the time the return is filed by the
executor, administrator or the heirs.

 Extension of Time to Pay Estate Tax

Unless an extension of time is requested in cases where the payment of
the tax will result in undue hardship on the heirs
 Not to exceed 5 years in case the estate is settled through the courts;
 Not to exceed 2 years in case the estate is settled extra judicially.
Any amount paid after the statutory due date of the tax, but within the
extension period shall be subject to interest but not to surcharge.

No Extension
Where the taxes are assessed by reason of negligence, intentional disregard of
rules and regulations, or fraud on the part of the taxpayer.
  Payment of the Estate Tax By Installment
In case the available cash of the estate is not sufficient to pay its total estate tax
liability, the estate may be allowed to pay the tax by installment, provided that:
1. A clearance shall be released only with respect to the property the
corresponding/computed tax on which has been paid.
2. Any amount paid after the statutory due date of the tax shall be imposed the
corresponding applicable penalty thereto.
3. However, if the payment of the tax after the due date is approved by the
Commissioner or his duly authorized representative, the imposable penalty
thereon shall only be the interest

TRAIN Law inserts new provision:

“In case the available cash of the estate is insufficient to pay the total estate tax due,
payment by installments shall be allowed within two (2) years from the statutory date
for its payment without civil penalty and interest.”
  Liability for Payment

Primary obligation
The executor or administrator of an estate has the primary obligation to pay
the estate tax. The estate tax imposed under the Code shall be paid by the executor or
administrator before the delivery of the distributive share in the inheritance to any heir or
beneficiary.
Where there are two or more executors or administrators, all of them are
severally liable for the payment of the tax.
The estate tax clearance issued by the Commissioner or the Revenue District
Officer (RDO) having jurisdiction over the estate will serve as the authority to distribute the
remaining distributable estate to the heirs or beneficiaries.

Subsidiary obligation
The heir or beneficiary has subsidiary liability for the payment of that portion of
the estate which his distributive share bears to the value of the total net estate.
The extent of his liability, however, shall in no case exceed the value of his share
in the inheritance.
Ponciano L. Almeda died on Oct. 16, 1997. The tax due on his estate is P2 million. His heirs wrote the
commissioner requesting for:
1. Extension of 30 days within which to file the estate tax return.
2. Extension of 2 years within which to pay the estate tax due.
3. The waiver and non-payment of the 25% surcharge should the first two requests be allowed.

Among the reasons cited in their request are the following:

1. The heirs were left in disarray as regards the conduct of business.
2. Records were lost when Almeda Building I was destroyed by fire.
3. The business operates at a net loss.
4. Property rentals, their main line of business, is not doing well.
5. The heirs cannot afford to separately and individually contribute to the settlement of the estate tax hence
it is likewise not possible for them to meet the deadline.

The Commissioner’s reply on the three requests follows:

1. Extension of Time to File Estate Tax Return, in meritorious cases, not exceeding 30 days shall be granted
by the BIR Commissioner or any authorized Revenue Officer.
2. Extension of Time to Pay Estate Tax, where the payment of the tax will result in undue hardship on the
heirs : not to exceed 5 years in case the estate is settled through the courts and not to exceed 2 years in
case the estate is settled extra judicially.
3. Any amount paid after the statutory due date of the tax, but within the extension period shall be subject
to interest but not to surcharge
o No judge shall authorize the executor or judicial administrator to deliver a distributive share to any party
interested in the estate unless a certification from the Commissioner that the estate tax has been paid is
shown.

o Registers of Deeds shall not register in the Registry of Property any document transferring real property
or real rights therein or any chattel mortgage, by way of gifts inter vivos or mortis causa, legacy or
inheritance, unless a certification from the Commissioner that the estate tax has been paid is shown.
They shall immediately notify the Commissioner, Regional Director, Revenue District Officer, or Revenue
Collection Officer or Treasurer of the city or municipality where their offices are located, of the non
payment of the tax discovered.

o Any lawyer, notary public, or government officer , who, by reason of his official duties, intervenes in
the preparation or acknowledgment of documents regarding partition or disposal of donation inter vivos
or mortis causa, legacy or inheritance, shall furnish the Commissioner, Regional Director, Revenue
District Officer or Revenue Collection Officer of the place where he may have his principal office, with
copies of documents and any information which may facilitate the collection of the estate tax.

o A debtor of the deceased shall not pay his debts to the heirs, legatee, executor or administrator of his
creditor, unless the certification of the Commissioner that the estate tax had been paid is shown. But he
may pay his debt without said certification if the credit is included in the inventory of the estate of the
deceased.
o Any person concerned shall not transfer 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
shown.

o A bank having knowledge of the death of a person, who maintained a bank deposit account solely, or
jointly with another , it shall not allow any withdrawal from the said deposit account, unless the
Commissioner has certified that the estate tax had been paid. However, in the absence of such
certification and upon authorization by the Commissioner the administrator of the estate or any one (1) of
the heirs may withdraw an amount not exceeding P20,000. 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. (Amended
by TRAIN Law: Allowing withdrawals from the bank deposit of the deceased will be subject to 6% final
withholding tax.)

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