UNIVERSITY OF THE PHILIPPINES

COLLEGE OF LAW
Diliman, Quezon City
Syllabus on
ESTATE TAX
Prof. Carlos G. Baniqued
I.

INTRODUCTION
A. When Estate Tax Accrues
Revenue Regulations No. 2-2003, Dec. 16, 2002
Lorenzo v. Posadas, 64 Phil. 353 (1937)
B. Non-Resident Alien Decedent
Sections 84, 85, and 104, NIRC
C. General Definition of Gross Estate
Secs. 85 and 104, NIRC
D. Constitution
1.
Property in Which Decedent Had an Interest
Sec. 85(A), NIRC
2.
Transfers in Contemplation of Death
Sec. 85(B), NIRC
3.
Transfers Taking Effect at Death
Sec. 85(B), NIRC
Ganuelas v. Cawed, 401 SCRA 447 (2003)
4.
Transfers with Retained Interest
Sec. 85(B), NIRC
a.
Period for Which Interest is Retained
i. For life
ii. For a period not ascertainable without reference to death
iii. For any period which does not in fact end before death
b.
Nature of Interest Retained
i. Possession or enjoyment
ii. Right to income
iii. Right to designate person who shall have possession or
enjoyment
iv. Right to designate person who shall receive income
5.
Revocable Transfers
Sec. 85(C), NIRC
a.
Nature of Power
i. Power to alter or amend
ii. Power to revoke
iii. Power to terminate
b.
Meaning of Power in Whatever Capacity
c.
Meaning of Power Exercisable in Conjunction with any
Other Person
d.
Meaning of Relinquishment of Power in Contemplation
of Death
6.
Power of Appointment
Sec. 85(D), NIRC

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a.
b.

Meaning of Power of Appointment

Applicability in the Philippines
7.
Proceeds of Life Insurance
Sec. 85(E), NIRC
a.
Estate as Beneficiary
b.
Third Person as Beneficiary
II. VALUATION OF ESTATE AND AMOUNT TO BE INCLUDED IN CASES COVERED
BY SECS. 85(B), (C) AND (D) OF THE NIRC
Secs. 85(G) and 88, NIRC
Dizon v. Court of Tax Appeals, 553 SCRA 111 (2008)
III. EXEMPT TRANSFERS
Sec. 87, NIRC
IV. EXCLUSION OF CONJUGAL SHARE OF SURVIVING SPOUSE
Sec. 85(H), NIRC
V. DEDUCTIONS FROM GROSS ESTATE
Sec. 86, NIRC
A. Expenses, Losses, Indebtedness, Taxes, Etc. (ELITE)
1.
Funeral Expenses
2.
Expenses for Testamentary or Intestate Proceedings
CIR v. CA, 328 SCRA 666 (2000)
Lizarraga Hermanos v. Abada, 40 Phil. 124 (1919)
De Guzman v. De Guzman, 83 SCRA 256 (1978)
3.
Claims Against the Estate
Dizon v. Court of Tax Appeals, supra
Collector v. Haygood, 65 Phil. 520, 526 (1938)
Lorenzo v. Posadas, supra
4.
Claims Against Insolvent Persons
5.
Unpaid Debts/Mortgages
6.
Losses
B. Vanishing Deduction
C. Transfers for Public Use
D. Family Home
BIR Rul. No. 012-2002, April 3, 2002
E. Standard Deduction
F. Medical Expenses
G. Death Benefits from Employer Under NIRC 32(B)(6)(a) and (b)
VI. FOREIGN TAX CREDITS
Sec. 86(E), NIRC
A. Per Country Limitation
B. Global Limitation
VII.SPECIAL RULES FOR NON-RESIDENT ALIENS
A. Meaning of Resident or Non-Resident
B. Inclusions in Gross Estate
Secs. 85 and 104, NIRC

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C. Deductions from Gross Estate
Sec. 86(B) and (D), NIRC
D. Foreign Tax Credits
Sec. 86(E), NIRC
VIII.

ADMINISTRATIVE PROVISIONS
A. Tax Rates
Sec. 84, NIRC
B. Notice of Death
Sec. 89, NIRC
C. Estate Tax Return
Sec. 90, NIRC
D. Payment of Estate Tax
Sec. 91, NIRC
E. Consequences of Non-Payment of Estate Tax
Secs. 248, 249, 94 to 97, NIRC
F. Status of Heirs Pending Partition of Estate

IX.

EFFECT OF RENUNCIATION/WAIVER BY SOME HEIRS

A. By or Among Heirs of Different Degree
Sec. 11, Rev. Regs. No. 2-2003
BIR Rul. No. 455-93, Nov. 19, 1993
B. By or Among Heirs of Same Degree
Sec. 11, Rev. Regs. No. 2-2003
BIR Rul. No. 105-99, July 13, 1999
BIR Rul. No. DA-251-99, April 23, 1999
BIR Rul. No. _____, Aug. 25, 1977