Escolar Documentos
Profissional Documentos
Cultura Documentos
A.
Kinds of Transfers
a-1. Onerous Transfers
a-2. Gratuitous Transfers
a.
Donors Tax imposed on inter-vivos transfers
b.
Estate Tax imposed on mortis causa transfers
B.
DONORS TAX
b-1. Donation defined - is an act of liberality whereby a person
disposes gratuitously of a thing or right in favor of another,
who accepts it [See Article 725, Civil Code]. The donation is
perfected from the moment the donor knows of the
acceptance by the done [See Article 734, Civil Code]
b-2. Donation for Tax Purposes
1.
Gratuitous transfers [See Section 98(A)(B)]
2.
Transfers for Inadequate Consideration [See Section
100]
3.
Gratuitous remission of debt
4.
Remuneratory donations - on account of merits or
services which do not constitute demandable debt;
imposes a burden less than the value of the thing
given [See Art. 726, Civil Code]
b-3. Basics
1.
Nature an excise tax imposed on the transfer of
property by way of gift inter vivos [See Lladoc vs.
Commissioner, 121 Phil. 1077]
2.
Purpose to prevent the escape from estate tax
3.
To Whom Imposed
4.
Situs of Taxation
b-4. Classification of Taxpayers
1.
Natural persons
a.
Citizens
1.
Resident citizens
2.
Nonresident citizens
b.
Aliens
1.
Resident aliens
2.
Nonresident aliens
2.
Juridical persons [Section 98(A)]
a.
Domestic
b.
Foreign
b-5. Tax Base, Sources of Taxable Gift, Tax Rates
1.
Tax Base
a.
Total Net Gifts donations to relatives [Section
99]
b.
Net Gifts donations to strangers [Section 98]
2.
Sources of Taxable Gift
a.
Within and Without
1.
Resident citizens
2.
Nonresident citizens
3.
Resident aliens
4.
Domestic corporations
b.
Within
1.
Nonresident aliens
2.
Foreign corporations [Bar, 1996]
3.
Tax Rates
a.
Schedular tax rates based on total net gifts for
donations to relatives
b.
30% Flat rate based on net gifts for donations to
strangers
b-6. Gross Gift Inclusions [Section 104]
1.
Citizens and Residents
a.
Real properties, within and without
b.
Tangible personal properties, within and without
c.
Intangible personal properties, within and
without
2.
Nonresident aliens and foreign corporations
a.
Real properties, within
b.
Tangible personal properties, within
c.
Intangible personal properties, within subject to
the rule on reciprocity
1.
Non-imposition of transfer tax
2.
Grant of exemptions from transfer tax
[Section 104]
b-7. Valuation
1.
Real properties
a.
FMV as determined by the Commissioner of
Internal Revenue or the FMV as shown in the
schedule of values fixed by the City or Provincial
Assessor, whichever is higher
b.
Fair market value refers to the price which any
seller will sell and any buyer will buy, both
willingly without any force or intimidation.
2.
Personal properties
a.
Cash face value
b.
Non-cash FMV as declared by the taxpayer
c.
Shares of Stocks
1.
Traded average of highest and lowest bid
2.
Not Traded use book value per share
b-8. Exemptions and Deductions
1.
Exemptions
a.
RC, RA, NRC
1.
Donations
propter
nuptias,
except
nonresident citizens [Section 101(A)(1)]
2.
Donations to Phil. Government or any of its
created agencies, or political subdivisions
for public purpose [Section 101(A)(2)]
3.
Donations to certain private institutions
a.
Educational,
charitable,
religious,
cultural
and
social
welfare
organizations
b.
Not more than 30% of said gifts is
used for administration purposes
c.
2.
ESTATE TAX
c-1. Definition - Succession is a mode of acquisition by virtue of
which the property, rights and obligations to the extent of
the value of the inheritance, of a person are transmitted
through his death to another or others either by his will or
by operation of law [Article 774, Civil Code].
c-2. Nature of Estate Tax tax imposed on the privilege of
transferring property mortis causa
c-3. Inclusions
1.
All properties, rights and obligations at the time of
death to the extent of the decedents interest [Section
85(A)]
2.
Proceeds of life insurance policy [Section 85(E)]
a.
Revocable and/or
b.
Beneficiary
is
the
estate,
executor
or
administrator
3.
Non-Absolute transfers
a.
In contemplation of death [Section 85(B)]
1.
This is a transfer inter vivos made by the
decedent during his lifetime.
2.
What motivate the transferor to transfer his
property is the thought of death, although
death may not be imminent.
b.
Revocable transfers [Section 85(C)]
1.
This presupposes a transfer inter vivos
made by the decedent in favor of another.
The decedent retains the right to alter,
amend or altogether revoke the transfer.
2.
This transfer becomes absolute upon the
death of the decedent since his right to
alter, amend or revoke can no longer be
exercised
c.
Passing under the general powers of
appointment [Section 85(D)]
1.
Power of Appointment is the right to
designate the person or persons who will
succeed to the property of a prior decedent
2.
b.
2.
3.
4.