Estate Tax

• Estate Tax


  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.
• Estate Tax


  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.
• BIR Form 1801


  Estate Tax Return
• Processing and Issuance of Approved ONETT Computation Sheet of Tax Due On Estate with No Other Tax Liabilities

  Processing and Issuance of Electronic Certificate Authorizing Registration (eCAR) for Estate of the Decedent (Without Other Tax Liabilities/ Business and Where Applicant Computed its Own Tax Due)
• Mandatory Requirements


  • Certified true copy of the Death Certificate
  • TIN of decedent and heir/s
  • Affidavit of Self Adjudication
  • Deed of Extra-Judicial Settlement of the Estate
  • Court order if settled judicially
  • Sworn Declaration of all properties of the Estate
  • Certified copy of the schedule of partition and the order of the court approving the same
  • Proof of Claimed Tax Credit
  • CPA Statement on the itemized assets of the decedent, itemized deductions from gross estate and the amount due
  • Certification of the Barangay Captain for the claimed Family Home
  • Duly notarized Promissory Note for "Claims Against the Estate" arising from Contract of Loan
  • Accounting of the proceeds of loan contracted within three (3) years prior to death of the decedent
  • Proof of the claimed "Property Previously Taxed"
  • Proof of the claimed "Transfer for Public Use"
  • Copy of Tax Debit Memo used as payment
• Requirements for Real Properties

  • Certified true copy/ies of the Transfer/Original/ Condominium Certificate/s of Title of real property/ies
  • Certified true copy of the Tax Declaration of real properties at the time of death
  • Certificate of No Improvement issued by the Assessor's Office where declared properties have no improvement
• Requirements for Personal Properties

  • Certificate of Deposit/ Investment/ Indebtedness owned by the decedent and the surviving spouse
  • Photocopy of Certificate of Registration of vehicles and other proofs showing the correct value of the same
  • Proof of valuation of shares of stock at the time of death
  • Photocopy of certificate of stocks
  • Proof of valuation of other types of personal property
• Other Additional Requirements


  • Special Power of Attorney (SPA)
  • Certification from the Philippine Consulate or Hague Apostille Convention
  • Location Plan/Vicinity map
  • Certificate of Exemption/BIR Ruling
  • BIR-approved request for installment payment of Estate tax due
  • BIR-approved request for partial disposition of Estate
  • Such other documents as may be required by law/rulings/regulations/etc.
• Mandatory Requirements for Simple Transactions

  • Tax Returns filed with proof of payment or Certificate of Tax Exemption
  • ONETT Computation Sheet of Tax Due duly approved by the authorized Revenue Officer
  • Notarized Special Power of Attorney
  • Secretary's Certificate or Board Resolution
  • Certification from the Philippine Consulate or Hague Apostille Convention
• Tax Rates (Effective January 1, 2018 to present)

  There shall be an imposed rate of six percent (6%) based on the value of such NET ESTATE determined as of the time of death of decedent composed of all properties, real or personal, tangible or intangible less allowable deductions.
• What are included in gross estate for resident alien decedents/citizens

  • Real or immovable property, wherever located
  • Tangible personal property, wherever located
  • Intangible personal property, wherever located
• What are included in gross estate for non-resident decedent/non-citizens

  • Real or immovable property located in the Philippines
  • Tangible personal property located in the Philippines
  • Intangible personal property - with a situs in the Philippines such as: Franchise which must be exercised in the Philippines, Shares, obligations or bonds issued by corporations organized or constituted in the Philippines, Shares, obligations or bonds issued by a foreign corporation 85% of the business of which is located 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, Shares, rights in any partnership, business or industry established in the Philippines
• What are excluded from gross estate


  • GSIS proceeds/ benefits
  • Accruals from SSS
  • Proceeds of life insurance where the beneficiary is irrevocably appointed
  • Proceeds of life insurance under a group insurance taken by employer (not taken out upon his life)
  • War damage payments
  • Transfer by way of bona fide sales
  • Transfer of property to the National Government or to any of its political subdivisions
  • Separate property of the surviving spouse
  • Merger of usufruct in the owner of the naked title
  • Properties held in trust by the decedent
  • Acquisition and/or transfer expressly declared as not taxable
• Basis for valuation of property

  The properties comprising the gross estate shall be valued based on their fair market value as of the time of decedent's death. For real property, the higher of the fair market value as determined by the Commissioner or the fair market value as shown in the schedule of values fixed by the provincial and city assessors. For shares of stocks, the fair market value shall depend on whether the shares are listed or unlisted in the stock exchanges. For units of participation in any association, recreation or amusement club, the fair market value shall be the bid price nearest the date of death published in any newspaper or publication of general circulation.
• Unlisted common shares


  Valued based on their book value
• Unlisted preferred shares


  Valued at par value
• In determining the book value of common shares, appraisal surplus shall not be considered as well as the value assigned to preferred shares, if there are any
• The valuation of unlisted shares shall be exempt from the provisions of RR No. 6-2013, as amended
• Fair market value of listed shares

  Arithmetic mean between the highest and lowest quotation at a date nearest the date of death, if none is available on the date of death itself
• Fair market value of units of participation in any association, recreation or amusement club

  Bid price nearest the date of death published in any newspaper or publication of general circulation
• Valuation of right to usufruct, use or habitation, and annuity

  Probable life of the beneficiary in accordance with the latest basic standard mortality table, to be approved by the Secretary of Finance, upon recommendation of the Insurance Commissioner
• Allowable deductions for Estate Tax Purposes (for dates of deaths occurring January 1, 2018 to present)


  • Standard Deduction - An amount equivalent to Five million pesos (₱5,000,000.00)
  • Claims against the estate
  • Unpaid mortgages, taxes and casualty losses
  • Property previously taxed
  • Transfers for Public Use
  • The Family Home - An amount equivalent to the current fair market value of the decedent's family home: Provided, however, that if the said current fair market value exceeds Ten million pesos (₱10,000,000.00), the excess shall be subject to estate tax
  • Amount Received by Heirs Under Republic Act No. 4917
  • Net share of the surviving spouse in the conjugal partnership or community property
• Allowable deductions for Estate Tax Purposes (for a non-resident alien)

  • Standard Deduction - An amount equivalent to Five hundred thousand pesos (₱500,000)
  • Losses and indebtedness
  • Property previously taxed
  • Transfers for Public Use
  • Net share of the surviving spouse in the conjugal partnership or community property
• What the term "Funeral Expenses" includes

  • The mourning apparel of the surviving spouse and unmarried minor children of the deceased bought and used on the occasion of the burial
  • Expenses for the deceased's wake, including food and drinks
  • Publication charges for death notices
  • Telecommunication expenses incurred in informing relatives of the deceased
  • 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
  • Interment and/or cremation fees and charges
  • 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.
• What the term "Judicial Expenses" includes

  • Fees of executor or administrator
  • Attorney's fees
  • Court fees
  • Accountant's fees
  • Appraiser's fees
  • Clerk hire
  • Costs of preserving and distributing the estate
  • Costs of storing or maintaining property of the estate
  • 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.