Estate Tax

Estate Tax
RESIDENCE AND CITIZENSHIP

The following are considered CITIZENS of
the Phils.:
Those who are citizens of the Philippines

at the time of the adoption of the
Constitution;
Those whose fathers or mothers are

citizens of the Philippines;
Those born before January 17, 1973 of

Filipino mothers, who elect Philippine
citizenship upon attaining the age of
majority;
Those who are naturalized in accordance

with law.
RESIDENCE
Not necessarily the actual place of

residence
Refers to the PERMANENT HOME, (the

place to which whenever absent for
business or pleasure, one intends to
return),
The properties to be included in the gross

estate will depend on the citizenship and
residence of the decedent.
RESIDENT
OR
CITIZEN
NR ALIEN
(NO
RECIPROCIT
Y)
NR ALIEN
(WITH
RECIPROCIT
Y)
- WITHIN
YES
YES
YES
- OUTSIDE
YES
NO
NO
CLASSIFICATIO
N OF
PROPERTY
REAL PROPERTY:
PERSONAL PROPERTY:
TANGIBLE
WITHIN
YES
YES
YES
TANGIBLE
OUTSIDE
YES
NO
NO
INTANGIBLE
WITHIN
YES
YES
NO
INTANGIBLE
OUTSIDE
YES
NO
NO
REAL PROPERTIES (IMMOVABLES)

ARTICLE 415 OF THE CIVIL CODE:
Land, buildings, roads and constructions of all
kinds adhered to the soil;
Trees, plants, and growing fruits, while they are

attached to the land or form an integral part of an
immovable;
Everything attached to an immovable in a fixed

manner, in such a way that it cannot be separated
therefrom without breaking the material or
deterioration of the object;

Statues, reliefs, paintings or other objects for use or
ornamentation, placed in buildings or on lands by the
owner of the immovable in such a manner that it
reveals the intention to attach them permanently to
the tenements;
Machinery, receptacles, instruments or implements

intended by the owner of the tenement for an
industry or works which may be carried on in a
building or on a piece of land, and which tend directly
to meet the needs of the said industry or works;

Animal houses, pigeon-houses, beehives,
fish ponds or breeding places of similar
nature, in case their owner has placed
them or preserves them with the
intention to have them permanently
attached to the land, and forming a
permanent part of it; the animals in these
places are included;

Fertilizer actually used on a piece of land;
Mines, quarries, and slag dumps, while

the matter thereof forms part of the bed,
and waters either running or stagnant;

Docks and structures which, though
floating, are intended by their nature and
object to remain at a fixed place on a
river, lake, or coast;
Contracts for public works, and servitudes

and other real rights over immovable
property.
PERSONAL PROPERTIES
(MOVABLES)
Personal properties are those that ARE NOT
REAL.
1. Can the object be transported from place
to place?
2. Can the change of location take place
without injury to the immovable to which
it may be attached?
3. Is it not included in the enumeration in
ARTICLE 415?
PERSONAL PROPERTIES (MOVABLES)

Those movables susceptible of appropriation

which are not included in the preceding article;
Real property which by any special provision of

law is considered as personal property;
PERSONAL PROPERTIES
(MOVABLES)
Forces of nature which are brought under
control by science; and
In general, all things which can be

transported from place to place without
impairment of the real property to which
they are fixed.
PERSONAL PROPERTIES
(MOVABLES)
Obligations and actions which have for
their object movables or demandable
sums; and
Shares of stock of agricultural,

commercial and industrial entities,
although they may have real estate.
The following INTANGIBLE PERSONAL

PROPERTIES are considered situated
in the Philippines:
Franchise which must be exercised within the
Philippines;
Shares, Obligations, or Bonds issued by any
corporation or sociedad anonima organized or
constituted in the Philippines in accordance with
its laws;
Shares, obligations or bonds issued by any
foreign corporation 85% of the business of which
is located in the Philippines;
The following INTANGIBLE PERSONAL

PROPERTIES are considered situated
in the Philippines:
Shares, obligations or bonds issued by a
foreign corporation if such shares, obligations

or bonds have acquired a business situs in the
Philippines; and
Shares or rights in any partnership, business
or industry established in the Philippines.
RULE ON RECIPROCITY
The rule applies to NR Aliens (when the
properties are INTANGIBLE PERSONAL
located in the Phils.):
NO ESTATE TAX will be collected:
1. If the decedent was a CITIZEN AND
RESIDENT of a foreign country which did
impose a transfer tax in intangible
personal property of Filipino citizens not
residing in that foreign country.
RULE ON RECIPROCITY
The rule applies to NR Aliens (when the
properties are INTANGIBLE PERSONAL
located in the Phils.):
NO ESTATE TAX will be collected:
2. If the laws of the foreign country allows a
similar exemption from transfer taxes in
respect of intangible personal property
owned by Filipino citizens not residing in
that foreign country.
Dina Mathay, a decedent, single,

left the following properties:
Vacation house in Hongkong
Land in Zamboanga City
1,200,000
80,000
House in Camarines Norte
3,000,000
Apartment in New York, USA
4,500,000
Car in Hongkong
700,000
Car in the Philippines
650,000
Jewelries in New York, USA
125,000
Franchise exercised in New York, USA
300,000
Franchise exercised in Hongkong
260,000
Accounts Receivable, debtor residing in the

Philippines
380,000
Accounts Receivable, debtor residing in New York
275,000
Accounts Receivable, debtor residing in Hongkong
240,000
Investment in Mahal Company, partnership

established in New York
730,000
Investment in Love Company, partnership

established in the Philippines
300,000
Investment in Amor Company, partnership

established in Hongkong
245,000
Domestic shares, certificate kept in the Philippines
140,000
Domestic shares, certificate kept in New York City
250,000
Foreign shares, 90% of business in the Philippines
100,000

but acquired business situs in the Philippines
270,000
425,000
Compute for the gross estate if Dina is a:

1. Resident or Citizen
2. NRA (no reciprocity)
3. NRA (with reciprocity)

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Estate Tax

RESIDENCE AND CITIZENSHIP

Those who are citizens of the Philippines

Those whose fathers or mothers are

Those born before January 17, 1973 of

Those who are naturalized in accordance

Not necessarily the actual place of

Refers to the PERMANENT HOME, (the

The properties to be included in the gross

REAL PROPERTIES (IMMOVABLES)

Trees, plants, and growing fruits, while they are

Everything attached to an immovable in a fixed

REAL PROPERTIES (IMMOVABLES)

Machinery, receptacles, instruments or implements

REAL PROPERTIES (IMMOVABLES)

REAL PROPERTIES (IMMOVABLES)

Mines, quarries, and slag dumps, while

REAL PROPERTIES (IMMOVABLES)

Contracts for public works, and servitudes

PERSONAL PROPERTIES (MOVABLES)

Those movables susceptible of appropriation

Real property which by any special provision of

In general, all things which can be

Shares of stock of agricultural,

The following INTANGIBLE PERSONAL

The following INTANGIBLE PERSONAL

foreign corporation if such shares, obligations

Dina Mathay, a decedent, single,

House in Camarines Norte

Apartment in New York, USA

Car in the Philippines

Jewelries in New York, USA

Franchise exercised in New York, USA

Franchise exercised in Hongkong

Accounts Receivable, debtor residing in the

Accounts Receivable, debtor residing in New York

Accounts Receivable, debtor residing in Hongkong

Investment in Mahal Company, partnership

Investment in Love Company, partnership

Investment in Amor Company, partnership

Domestic shares, certificate kept in the Philippines

Domestic shares, certificate kept in New York City

Foreign shares, 90% of business in the Philippines

Foreign shares, 30% of business in the Philippines

Foreign shares, 60% of business in the Philippines

Compute for the gross estate if Dina is a:

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