Inheritance Taxes

GOV’T DRIVE:  The government is taking a closer look at its collection of estate taxes, especially from wealthy Filipinos.  Inheritance taxes are no longer being levied on recipients of legacies from parents or other relatives.  The tax assessments are due from the “transmitter” of wealth which is the estate itself.  Estate taxes are graduated based on the total value of the estate of the deceased.  Recent amendments of the Tax Code set rates that are kinder to those leaving smaller estates.

Finance Secretary Cesar V. Purisima noted that estate tax collections are very low – averaging only P800 million to P1 billion per year.  This is despite the escalation of zonal values of realties, which serve as basis for estate tax computation.  For net estates with values of P10 million and above, the tax rate is 20%.  For estates worth P15 million – the tax rate is 15%.  Family homes worth P1 million are exempt – and the first P1 million of the estate is also exempt.

FORMALITIES:  Within sixty (60) days from the death of a taxpayer, his heirs or administrator must file with the Revenue District of his last residence, a Notice of Death.  Counting from said date of death, the Estate Tax Return must be filed within six (6) months.  The return must be accompanied by certificates of residence and total landholdings of the decedent in every given local government unit.

Proofs of relationship between the deceased and heirs must be shown, more so in intestate succession.  Certified true copies of realty titles and tax declarations must be submitted.  The estate values of lands are based on zonal valuation – while taxable amounts of improvements are based on market values per tax declaration.  Estate tax must be paid upon filing, within the period provided.  Late filings subject the estate to surcharges (25%), interest (20 %. p.a.) and compromise penalties.

OPINIONS UNLIMITED 2013 :  Atty. Tony (APA) Acyatan : BIKOL REPORTER : Feb 17, 2013