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But, there are certain things that need to be done, like making arrangements for the
embalming, the wake, the casket, the interment or cremation, the burial
plot (incidentally, there are a lot of foreclosed memorial lots for sale inside our
database) and the gravestone, among others.
Note: For the rest of this article, we will use the terms “decedent” or “deceased person”
to refer to the person who died.
1. File a Notice of Death with the Bureau of Internal Revenue within two
months after the date of death. This is applicable when the gross value of the
estate exceeds P20,000.00. This should be filed by the executor or administrator of
the estate, or any of the legal heirs. It shall be filed with the RDO where the
decedent was domiciled at the time of his death. There is no specific format.
2. Get a Tax Identification Number (TIN) for the Estate of the deceased person by
using BIR Form No. 1901. Use this TIN when filing the Estate Tax Return (BIR
Form No. 1801).
3. Prepare the list of assets and liabilities of the decedent. Get the fair market values
of the properties at the time of death.
4. Prepare the supporting documents for the assets and liabilities, as well as the
deductions you are going to take. You will need these for the estate tax
computation and as attachments to the Estate Tax Return.
1. Certified true copy of the Death Certificate
2. Notice of Death duly received by the BIR, if gross estate exceeds P20,000 for
deaths occurring on or after Jan. 1, 1998; or if the gross estate exceeds
P3,000 for deaths occurring prior to January 1, 1998
3. Any of the following:
Deed of Extra-Judicial Settlement of the Estate, if the estate is settled
extra judicially (sample forms may be found here and here).
Court Orders/Decision, if the estate is settled judicially;
Affidavit of Self-Adjudication (sample here) and Sworn Declaration of all
properties of the Estate
A certified true copy of the schedule of partition of the estate and the
order of the court approving the same, if applicable.
4. Certified true copy(ies) of the Transfer/Original/Condominium Certificate of
Title(s) of real property(ies) (front and back pages), if applicable
5. Certified true copy of the latest Tax Declaration of real properties at the time
of death, if applicable
6. “Certificate of No Improvement” issued by the Assessor’s Office declared
properties have no declared improvement or Sworn Declaration/Affidavit of No
Improvement by at least one (1) of the transferees
7. Certificate of Deposit/Investment/Indebtedness owned by the decedent and
the surviving spouse, if applicable
8. Photocopy of Certificate of Registration of vehicles and other proofs showing
the correct value of the same, if applicable
9. Photo copy of certificate of stocks, if applicable
10. Proof of valuation of shares of stocks at the time of death, if applicable
For listed stocks – newspaper clippings or certification from the Stock
Exchange
For unlisted stocks – latest audited Financial Statement of issuing
corporation with computation of book value per share
11. Proof of valuation of other types of personal property, if applicable
12. Proof of claimed tax credit, if applicable
13. CPA Statement on the itemized assets of the decedent, itemized deductions
from gross estate and the amount due if the gross value of the estate exceeds
two million pesos, if applicable
14. Certification of Barangay Captain for claimed Family Home
15. Duly notarized Promissory Note for “Claims against the Estate” arising from
Contract of Loan
16. Accounting of the proceeds of loan contracted within three (3) years prior to
death of the decedent
17. Proof of the claimed “Property Previously Taxed”
18. Proof of claimed “Transfer for Public Use”
19. Copy of Tax Debit Memo used as payment, if applicable
5. Compute the net estate and estate tax.
6. File the Estate Tax Return and pay the estate taxes.
7. Follow the procedure for transferring real properties to the name of the heirs (this
will be discussed in a separate post).
8. Follow the procedure for cancellation of the TIN of the decedent as discussed in
Section 12 of Revenue Regulations No. 7-2012. Use BIR Form No. 1905 for the
cancellation of TIN.
Gross Estate
Gross estate is the value at the time of death of all property, real or personal, tangible
or intangible, wherever situated. In the case of a nonresident decedent who at the time
of his death was not a citizen of the Philippines, only that part of the entire gross estate
which is situated in the Philippines shall be included in his taxable estate.
The value of the properties shall be based on their fair market value (FMV) as of
the time of death.
If the property is a real property, the FMV shall be the higher between the BIR zonal
valuation and FMV per tax declaration (I paraphrased this).
Please also note that also included in the computation of the gross estate are interest or
share in a property, transfers in contemplation of death, and revocable transfers.
The proceeds of life insurance are included in the gross estate unless the beneficiary is
designated as irrevocable).
Deductions from gross estate
1. Expenses, Losses, Indebtedness, and Taxes (ELIT)
a. Funeral expenses – Lowest among:
Actual funeral expenses;
5% of the gross estate; and
P200,000.00.
b. Judicial expenses of the testamentary and intestate proceedings
At the time the indebtedness was incurred, the instrument was duly notarized;
and
If the loan was contracted within three (3) years before the death of the
decedent, the administrator or executor shall submit a statement showing the
disposition of the proceeds of the loan
d. Claims of the deceased against insolvent persons
Over But not over The tax shall be Plus Of the excess
over
0 200,000 Exempt
200,000 500,000 0 5% 200,000
500,000 2,000,000 15,000 8% 500,000
2,000,000 5,000,000 135,000 11% 2,000,000
5,000,000 10,000,000 465,000 15% 5,000,000
10,000,000 And Over 1,215,000 20% 10,000,000
Estate Tax Philippines Table 1: For decedents who died on January 1, 1998 and
onwards
If the decedent died between July 28, 1992 to December 31, 1997, the following are the
applicable estate tax rates based on the net estate amount:
P 200,00.00 0%
If the decedent died between January 1, 1973 and July 27, 1992, the following are the
applicable estate tax rates based on the net estate amount:
P 10,00.00 Exempt
Estate Tax Philippines Table 3: For decedents who died between January 1, 1973
and July 27, 1992
If the decedent died between September 15, 1950 to December 31, 1972, the following
are the applicable estate tax rates based on the net estate amount:
Estate Tax Philippines Table 4: For decedents who died between September 15,
1950 to December 31, 1972
Sample computations
Please refer to BIR Revenue Regulations No. 2-2003 for sample computations.
To help you determine the computation for the estate tax due, you may refer to
the ONETT (One-Time Transaction) Computation Sheet, in Annex B-3 (pages 16 and
17) also of RMO No. 15-03. Please also check the sample computations in BIR RR No.
2-2003 and BIR Form No. 1801.
Further reading
For better understanding of estate taxes, I urge you to read the following:
1. Overview on Estate Tax
2. Sections 84 to 97 of the 1997 Philippine Tax Code
3. Revenue Regulations 2-03 (Estate Tax and Donor’s Tax Regulations)
4. Estate Tax Return (BIR Form No. 1801, front and back pages)