Bir Ruling 332-12

May 14, 2012
BIR RULING NO. 332-12
Secs. 24 (D) (1), 98, 105, 196 of the

1997 NIRC, as amended;
BIR Ruling No. 031-99
Romulo Mabanta Buenaventura Sayoc & De Los Angeles

30th Floor, Citibank Tower
8741 Paseo de Roxas, Makati City
Attention: Atty. Reynaldo G. Geronimo

Partner
Gentlemen :
This refers to your letter dated April 12, 2012 stating that:
"1. On 04 November 1996, Liana Elena M. Romulo (hereinafter

referred to as the Trustor) entered into a Trust Agreement with Equitable
Banking Corporation by virtue of which Trust Account No. 61-020-96 was
established, whereby the Trustor conveyed to Equitable Banking
Corporation, the amount of Seven Million Pesos (P7,000,000.00) in cash, in
trust nevertheless for himself and reserving unto himself the right to revoke,
amend, annul, cancel, and terminate the trust created thereby.
2. Pursuant to the terms of the Trust Agreement, Equitable

Banking Corporation purchased, with the funds transferred to it in trust, a
Condominium Unit, known as Unit No. 91, 9th Floor of the Century Plaza
Apartments consisting of One Hundred Forty sq.m. more or less, covered by
Condominium Certificate of Title No. 44814 of the Registry of Deeds of
Makati City (the "Property") and caused the same to be registered in the
name of Equitable Banking Corporation Trust Account No. 61-020-96.
3. Equitable Banking Corporation has since merged with the

Philippine Commercial and Industrial Bank, with the surviving entity being
named as Equitable PCI Bank, with principal office at 15/F PCIBank Tower
I, Makati Avenue corner H.V. de la Costa street, Makati City.
4. Equitable PCI Bank has since merged with BDO Unibank, Inc.,
the herein transferor being the surviving party.
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5. The Trustor now wants the trust res, particularly the Property
to be transferred to her name. TIAEac
6. The owner of record of the said trust res as appearing in the

Condominium Certificate of Title No. 44814 is still Equitable Banking
Corporation (which as previously stated is now BDO Unibank, Inc., the
herein Transferor) and said successor entity as the owner of record is
constrained, under applicable corporation, banking and trust law and
regulation, to execute this Deed of Conveyance, necessary to give full effect
to the wishes of the Trustor Liana Elena M. Romulo of putting the property
which she owns, in her own name."
You now request for a confirmation of opinion that in as much as the Deed
of Conveyance referred to involves no real transfer of ownership by BDO
Unibank, Inc. of the trust res back to the same trustor of a revocable trust, no
internal revenue tax is due thereon.
In reply thereto, please be informed that your opinion is hereby confirmed

as follows:
The transfer of title of the afore-stated property by the trustee in favor of

the beneficiary, who is the beneficial owner thereof is not subject to capital gains
tax imposed under Sec. 27 (D) (5) of the Tax Code of 1997 nor to the creditable
withholding tax prescribed in RR 2-98, as amended, considering that the
conveyance is not motivated by a valuable consideration and merely
acknowledges, confirms and consolidates the legal title and beneficial ownership
over the properties in the name of Liana Elena M. Romulo, the Trustor.
Furthermore, in BIR Ruling No. 031-99 dated March 19, 1999, this Office
has already ruled that:
". . . the conveyance by the Trustee in favor of the Trustor of the

subject properties which the former acquired by virtue of the Trust
Agreement is not to be treated as another transfer separate and distinct from
the sale between the original owner and the Trustee. The conveyance is
merely to be treated as a continuation and confirmation of title in favor of
the ultimate and real beneficiary of the subject properties." STcEaI
The transfer of the properties to Liana Elena M. Romulo is not likewise

subject to the 12% VAT because the said property is not held primarily for sale to
customers or for lease in the ordinary course of trade or business.
The conveyance of the property to Liana Elena M. Romulo without any

monetary consideration is not subject to gift tax imposed under Sec. 98 of the 1997
Tax Code, since there is no donative intent on the part of the trustee.
The Deed of Conveyance executed to terminate the trust relationship
between the successor entity and Liana Elena M. Romulo and the consolidation of
the legal title and beneficial ownership over the subject property is a conveyance
without monetary consideration, and as such not subject to the documentary stamp
tax imposed under Sec. 196 of the same Tax Code, as amended. However, the
notarial acknowledgment to such deed is subject to the documentary stamp tax of
P15.00 under Sec. 188 of the 1997 Tax Code.
This ruling is being issued on the basis of the foregoing facts as

represented. However, if upon investigation, it will be ascertained that the facts are
different, then this ruling shall be considered as null and void.
Very truly yours,
(SGD.) KIM S. JACINTO-HENARES

Commissioner
Bureau of Internal Revenue

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May 14, 2012

BIR RULING NO. 332-12

Secs. 24 (D) (1), 98, 105, 196 of the

Romulo Mabanta Buenaventura Sayoc & De Los Angeles

Attention: Atty. Reynaldo G. Geronimo

"1. On 04 November 1996, Liana Elena M. Romulo (hereinafter

2. Pursuant to the terms of the Trust Agreement, Equitable

3. Equitable Banking Corporation has since merged with the

6. The owner of record of the said trust res as appearing in the

In reply thereto, please be informed that your opinion is hereby confirmed

The transfer of title of the afore-stated property by the trustee in favor of

". . . the conveyance by the Trustee in favor of the Trustor of the

The transfer of the properties to Liana Elena M. Romulo is not likewise

The conveyance of the property to Liana Elena M. Romulo without any

This ruling is being issued on the basis of the foregoing facts as

Very truly yours,

(SGD.) KIM S. JACINTO-HENARES

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