Transfer Taxes

• Transfer tax is imposed on the transfer of property
• Two types of transfer tax

  Estate Tax

  Donor’s Tax
• Transfer taxes


  Are excise tax imposed upon the privilege of gratuitously transmitting one’s property to another
• Estate tax 


  tax impossed upon the right of transmitting property at the time of death.
• Donor’s Tax


  Tax on the privilege of transmitting one’s property to another during his lifetime.
• Reasons justifying the imposition of estate tax

  Benefit received theory

  Privilege theory / state partnership theory

  Ability to pay theory

  Redistribution of wealth theory
• Benefit Received theory 


  the state collects tax for the service of providing benefit to the heirs and the state.
• Privilege theory / state partnership theory


  inheritance is not a right, but a privilge
• Ability to pay theory

  Heirs receives assets that allows them to pay taxes that contributes to the government
• Redistribution of wealth Theory

  The death tax reduces the wealth of successor, which then be distributed to the society.
• Succession 


  mode of acquisition of property through death
• Succession

  Art. 774 civil code of the philippines
• Elements of succession

  Decedent

  Heir

  Estate
• Decedent


  a person whose property is transmitted through succession
• Testator


  a decedent is called when he left a will
• Heir


  Person called to the succession
• Estate

  All property, rights, and obligation of a person which is not extinguishable upon death
• Things transmissible in succession

  Property

  Rights

  Obligations
• Kinds of succession

  Testamentary

  Legal or intestate

  Mixed
• Testamentary 


  succession where the testator left a will
• Legal or intestate


  succession where there is no will , or if there is a will but is void
• Mixed 


  Combination of testamentary and intestate
• Kinds of successors in a testamentary succession

  Devisee

  Legatee
• Divisee


  person receaiving an object of real property
• Legatee


  A person receiving an object of personal property
• Devise


  The gift of real property of a will
• Legacy


  The gift of personal property by a will
• Will


  Act whereby a person is permitted, with the formalities prescribed by law to control by certain degree the disposition of an estate
• Codicil 


  An act ammending the will to add or alter the will.
• Kinds of last will and testament

  Holographic

  non-holographic
• Holographic


  Written will by the testator signed by hand
• Non-Holographic 


  A will created for the testator by a third party, usually by a lawyer assigned by the court
• Probate

  Special proceeding to establish the validity of a will
• Revocation 


  The testator may revoke his will anytime before he dies
• Persons authorized to manage the estate

  Executor

  administrator
• Executor 


  Person named in the will to administer the estate.
• Administrator

  Person assigned by the court to administer the estate