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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.
Tax Form
BIR Form 1801 - Estate Tax Return
Documentary Requirements
1. Notice of Death duly received by the BIR, if gross estate exceeds P20, 000 for deaths occurring on or
after Jan. 1, 1998; or if the gross estate exceeds P3, 000 for deaths occurring prior to January 1, 1998
2. Certified true copy of the Death Certificate
3. Deed of Extra-Judicial Settlement of the Estate, if the estate is settled extra judicially
4. Court Orders/Decision, if the estate is settled judicially;
5. Affidavit of Self-Adjudication and Sworn Declaration of all properties of the Estate
6. A certified true copy of the schedule of partition of the estate and the order of the court approving
the same, if applicable
7. Certified true copy(ies) of the Transfer/Original/Condominium Certificate of Title(s) of real
property(ies) (front and back pages), if applicable
8. Certified true copy of the latest Tax Declaration of real properties at the time of death, if applicable
9. "Certificate of No Improvement" issued by the Assessor's Office declared properties have no
declared improvement or Sworn Declaration/Affidavit of No Improvement by at least one (1) of the
transferees
10. Certificate of Deposit/Investment/Indebtedness owned by the decedent and the surviving spouse, if
applicable
11. Photo copy of Certificate of Registration of vehicles and other proofs showing the correct value of
the same, if applicable
12. Photo copy of certificate of stocks, if applicable
13. Proof of valuation of shares of stocks at the time of death, if applicable
For listed stocks - newspaper clippings or certification from the Stock Exchange
For unlisted stocks - Audited Financial Statements duly certified by an independent certified
public accountant with computation of fair market value per share at the time of death
Tax Rates
Effective January 1, 1998 up to Present
If the Net Estate is
Over
Plus
P 200,000.00
Exempt
P 200,000.00
500,000.00
5%
P 200,000.00
500,000.00
2,000,000.00
P 15,000.00
8%
500,000.00
2,000,000.00
5,000,000.00
135,000.00
11 %
2,000,000.00
5,000,000.00
10,000,000.00
465,000.00
15 %
5,000,000.00
1,215,000.00
20 %
10,000,000.00
10,000,000.00
Effective July 28, 1992 up to December 31, 1997 (Section 77 of the NIRC, as amended
(Republic Act No. 7499)
If the Net Estate is
Over
P 200,000.00
500,000.00
500,000.00
2,000,000.00
2,000,000.00
5,000,000.00
Plus
Exempt
5%
P 200,000.00
P 15,000.00
8%
500,000.00
5,000,000.00
135,000.00
12 %
2,000,000.00
10,000,000.00
495,000.00
21%
5,000,000.00
1,545,000.00
35 %
10,000,000.00
10,000,000.00
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
Plus
P 10,000.00
Exempt
P 10,000.00
50,000.00
3%
P 10,000.00
50,000.00
75,000.00
P 1,200.00
4%
50,000.00
75,000.00
100,000.00
2,200.00
5%
75,000.00
100,000.00
150,000.00
3,450.00
10%
100,000.00
150,000.00
200,000.00
8,450.00
15 %
150,000.00
200,000.00
300,000.00
15,950.00
20%
200,000.00
300,000.00
400,000.00
35,950.00
25%
300,000.00
400,000.00
500,000.00
60,950.00
30%
400,000.00
500,000.00
625,000.00
90,950.00
35%
500,000.00
625,000.00
750,000.00
134,700.00
40%
625,000.00
750,000.00
875,000.00
184,700.00
45%
750,000.00
875,000.00
1,000,000.00
240,950.00
50%
875,000.00
1,000,000.00
2,000,000.00
303,450.00
53%
1,000,000.00
2,000,000.00
3,000,000.00
833,450.00
56%
2,000,000.00
3,000,000.00
1,393,450.00
60%
3,000,000.00
Effective September 15, 1950 to December 31, 1972 (Section 85 of the NIRC, as amended
(Republic Act No. 579)
Estate and Inheritance Tax
If the Net Estate is
Over
ESTATE
INHERITANCE
Exempt
Exempt
5,000.00
5,000.00
12,000.00
1.0%
2%
12,000.00
30,000.00
2.0%
4%
30,000.00
50,000.00
2.5%
6%
50,000.00
70,000.00
3.0%
8%
70,000.00
100,000.00
5.0%
12%
100,000.00
150,000.00
7.0%
14%
150,000.00
250,000.00
9.0%
16%
250,000.00
500,000.00
11.0%
18%
500,000.00
1,000,000.00
13%
20%
15%
22%
1,000,000.00
Effective July 1, 1939 to September 14, 1950 (Section 85 of the NIRC, as amended
(Commonwealth Act No. 466)
Estate and Inheritance Tax
ESTATE
INHERITANCE
Exempt
1.0%
3000.00
3,000.00
10,000.00
1.0%
10,000.00
30,000.00
1.5%
2.0%
30,000.00
50,000.00
2.0%
3.0%
50,000.00
80,000.00
2.5%
4.0%
80,000.00
110,000.00
3.0%
5.0%
110,000.00
150,000.00
3.5%
6.0%
150,000.00
190,000.00
4.0%
7.0%
190,000.00
240,000.00
4.5%
8.0%
240,000.00
290,000.00
5.0%
9.0%
290,000.00
350,000.00
5.5%
10.0%
350,000.00
420,000.00
6.0%
11.0%
420,000.00
500,000.00
6.5%
12.0%
500,000.00
600,000.00
7.0%
13.0%
600,000.00
720,000.00
7.5%
14.0%
720,000.00
850,000.00
8.0%
15.0%
850,000.00
1,000,000.00
8.5%
16.0%
1,000,000.00
1,200,000.00
9.0%
17.0%
1,200,000.00
1,500,000.00
9.5%
17.0%
10.0%
17.0%
1,500,000.00
Procedures
The heirs/authorized representative/administrator/executor shall file the estate tax return (BIR Form
1801) and pay the corresponding estate tax with the Authorized Agent Bank (AAB), Revenue Collection
Officer (RCO) or duly authorized Treasurer of the city or municipality in the Revenue District Office
having jurisdiction over the place of domicile of the decedent at the time of his death, pursuant to
Section 90(D) of the Tax Code, as amended.
In case of a non-resident decedent, with 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.
For non-resident decedent with no executor or administrator in the Philippines, the estate tax return
shall be filed with the AAB under the jurisdiction of RDO No. 39 South Quezon City.
The heir/authorized representative/administrator/executor shall submit all the applicable documentary
requirements as prescribed in Annexes A-6 and A-6.1 of Revenue Memorandum Order (RMO) No. 152003 and proof of payment to the RDO having jurisdiction over the place of residence of the decedent
or the RDO where the executor or administrator is registered, or RDO No. 39 South, Quezon City,
whichever is applicable. (part II, par.(4)of RMC No. 34-2013)
Payment of 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 and a clearance
shall be released only with respect to the property, the corresponding/computed tax on which has
been paid. (Section 9(F) of RR 2-2003)
One-Time Transaction (ONETT) taxpayers shall mandatorily use the eBIRForms in filing all of their tax
returns. They may opt to submit their tax returns manually using the eBIRForms Offline Package in the
Revenue District Office having jurisdiction over the place of domicile of the decedent at the time of his
death or electronically through the use of the Online eBIRForms System. (Sec. 3(2) RR No. 6-2014)
Please note that the time of payment will vary depending on the law applicable at the time of the
decedents death.
Deadlines
File the return within six (6) months from decedent's death. However, the Commissioner may, in
meritorious cases, grant extension not exceeding thirty (30) days.
The Estate Tax imposed shall be paid at the time the return is filed by the executor or administrator or
the heirs. However, when the Commissioner finds that 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 all cases of transfers subject to tax, or where, though exempt from tax, the gross value of the estate
exceeds Twenty Thousand Pesos (P 20,000), Section 89 of the National Internal Revenue Code of 1997
(Tax Code), as amended, provides that the executor, administrator or any of the legal heirs, shall send
a written notice of death to the Commissioner within two (2) months after the decedents death or
within a like period after an executor or administrator qualify as such. (part II, par.(1)of RMC No. 342013)
Please note that the time of filing will vary depending on the law applicable at the time of the
decedents death.
Extension of Time of Filing:
When the Commissioner finds that the payment of the estate tax or of any part thereof would imposed
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 it settled extra-judicially.
Where the request for extension is 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 or his duly authorized representative may require
executor, or administrator, or beneficiary, as the case may be, to furnish a bond in such amount,
exceeding double the amount, not exceeding double the amount of tax and with such sureties as
Commissioner deems necessary, conditioned upon the payment of the said tax in accordance in
terms of extension.
the
not
the
the
The request for extension shall be filed with the Revenue District Officer (RDO) where the estate is
required to secure its TIN and file the estate tax return. The application shall be approved by the
Commissioner or his duly authorized representative.
The properties subject to Estate Tax shall be appraised based on its fair market value at the
time of the decedent's death.
The appraised value of the real estate shall be whichever is higher of the fair market value, as
determined by the Commissioner (zonal value) or the fair market value, as shown in the
schedule of values fixed by the Provincial or City Assessor.
If there is no zonal value, the taxable base is the fair market value that appears in the latest
tax declaration.
If there is an improvement, the value of improvement is the construction cost per building
permit or the fair market value per latest tax declaration.
The family home refers to the dwelling house, including the land on which it is situated, where the
husband and wife, or a head of the family, and members of their family reside, as certified to by the
Barangay Captain of the locality. The family home is deemed constituted on the house and lot from the
time it is actually occupied as a family residence and is considered as such for as long as any of its
beneficiaries actually resides therein. (Arts. 152 and 153, Family Code)
E. Standard deduction A deduction in the amount of One Million Pesos (P1,000,000.00) shall be
allowed as an additional deduction without need of substantiation.
F. Medical expenses All medical expenses (cost of medicines, hospital bills, doctors fees, etc.)
incurred (whether paid or unpaid) within one (1) year before the death of the decedent shall be
allowed as a deduction provided that the same are duly substantiated with official receipts. For
services rendered by the decedents attending physicians, invoices, statements of account duly
certified by the hospital, and such other documents in support thereof and provided, further, that the
total amount thereof, whether paid or unpaid, does not exceed Five Hundred Thousand Pesos
(P500,000).
G. Amount received by heirs under Republic Act No. 4917-Any amount received by the heirs from the
decedents employer as a consequence of the death of the decedent-employee in accordance with
Republic Act No. 4917 is allowed as a deduction provided that the amount of the separation benefit is
included as part of the gross estate of the decedent.
H. Net share of the surviving spouse in the conjugal partnership or community property
For a non-resident alien
A. Expenses, losses, indebtedness and taxes
B. Property previously taxed
C. Transfers for public use
D. Net share of the surviving spouse in the conjugal partnership or community property
No deduction shall be allowed in the case of a non-resident decedent not a citizen of the Philippines,
unless the executor, administrator, or anyone of the heirs, as the case may be, includes in the return
required to be filed in the Section 90 of the Code the value at the time of the decedents death of that
part of his gross estate not situated in the Philippines.
Please note that the allowable deductions will vary depending on the law applicable at the time of the
decedents death.
6. What does the term "Funeral Expenses" include? (Sec 6 (A)(1) of RR 2-2003)
The term "FUNERAL EXPENSES" is not confined to its ordinary or usual meaning. They include:
(a) The mourning apparel of the surviving spouse and unmarried minor children of the deceased
bought and used on the occasion of the burial;
(b) Expenses for the deceaseds wake, including food and drinks;
(c) Publication charges for death notices;
(d) Telecommunication expenses incurred in informing relatives of the deceased;
(e) Cost of burial plot, tombstones, monument or mausoleum but not their upkeep. In case the
deceased owns a family estate or several burial lots, only the value corresponding to the plot where he
is buried is deductible;
(f) Interment and/or cremation fees and charges; and
(g) All other expenses incurred for the performance of the rites and ceremonies incident to interment.
Expenses incurred after the interment, such as for prayers, masses, entertainment, or the like are not
deductible. Any portion of the funeral and burial expenses borne or defrayed by relatives and friends of
the deceased are not deductible. Actual funeral expenses shall mean those which are actually incurred
in connection with the interment or burial of the deceased. The expenses must be duly supported by
official receipts or invoices or other evidence to show that they were actually incurred.
7. What does the term "Judicial Expenses" include? (Sec 6 (A)(2) of RR 2-2003)
Expenses allowed as deduction under this category are those incurred in the inventory-taking of a
assets comprising the gross estate, their administration, the payment of debts of the estate, as well as
the distribution of the estate among the heirs. In short, these deductible items are expenses incurred
during the settlement of the estate but not beyond the last day prescribed by law, or the extension
thereof, for the filing of the estate tax return. Judicial expenses may include:
(a) Fees of executor or administrator;
(b) Attorneys fees;
(c) Court fees;
(d) Accountants fees;
(e) Appraisers fees;
(f) Clerk hire;
(g) Costs of preserving and distributing the estate;
(h) Costs of storing or maintaining property of the estate; and
(i) Brokerage fees for selling property of the estate.
Any unpaid amount for the aforementioned cost and expenses claimed under Judicial Expenses
should be supported by a sworn statement of account issued and signed by the creditor.
8. What are the requisites for deductibility of claims against the Estate? (Sec 6(A)(3) of RR 2-2003)
(a) The liability represents a personal obligation of the deceased existing at the time of his death
except unpaid obligations incurred incident to his death such as unpaid funeral expenses (i.e.,
expenses incurred up to the time of interment) and unpaid medical expenses which are classified
under a different category of deductions pursuant to these Regulations;
(b) The liability was contracted in good faith and for adequate and full consideration in money or
moneys worth;
(c) The claim must be a debt or claim which is valid in law and enforceable in court;
(d) The indebtedness must not have been condoned by the creditor or the action to collect from the
decedent must not have prescribed.
9. How do we determine the fair market value of the unlisted stocks? (RR NO. 6-2013) (Annex U)
In determining the value of the shares, the Adjusted Net Asset Method shall be used whereby all assets
and liabilities are adjusted to fair market values. The net of adjusted asset minus the adjusted liability
value is the indicated value of the equity.
For purposes of this item, the appraised value of real property at the time of sale shall be the highest
among the following:
(a) The fair market value as determined by the Commissioner, or
(b) The fair market value as shown in the schedule of values fixed by the Provincial and City Assessors, or
(c) The fair market value as determined by Independent Appraiser.