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The subject matter of a transfer tax is the privilege of the Lineal Consanguinity
transferor to gratuitously transfer property, rights and Collateral Consanguinity
obligations (obligations are limited to the value of the
property and rights inherited) which takes effect at the Will an act whereby a person is permitted, with the
death of the decedent or the during the lifetime of the donor formalities prescribed law, to control to a certain degree the
and donee. disposition of his estate to take effect after his death.
the person represented, and acquires rights which the latter FMV in the schedule of
would have. values fixed by provincial
or city assessors.
Representations may rise either because of: Personal Property Unlisted common shares book
(Shares of Stock) value per share
1. Death Unlisted preference share par
2. Incapacity value per share
3. Disinheritance Listed shares arithmetic mean
between highest and lowest quotation
The law provides that representation is not available to: at date nearest death
Right of usufruct, In accordance with the latest Basic
1. Compulsory heirs: In case of repudiation habitat or annuity Standard Mortality Table
2. Voluntary Heirs
3. Voluntary Heirs, legatees and devisees who:
a. Predecease the testator; or Exemptions and Exclusion from the Gross Estate
b. Renounce the inheritance
A. Exclusions under Sec. 85 and 86 of the NIRC
Justification for the Imposition of Estate Tax 1. Exclusive property of the surviving spouse.