BIR RULING [DA-003-07]

Section 98, NIRC; BIR Ruling No. DA-561-2006

Ms. Annabelle Ebio Badana
921 Samar St., Sampaloc
Manila
Madam:
This refers to your letter dated August 29, 2006, for and in behalf of your co-heirs requesting
clarificatory ruling on the taxability of the Extrajudicial Settlement of Estate with Waiver of Rights.

It is represented that you are the daughter and one of the heirs of the late Jovencio D. Ebio, who died
intestate on July 16, 2006 at Manila; that in the settlement of the estate of the deceased, you, together
with your brothers and sisters, executed an Extrajudicial Settlement with Waiver of Rights in favor of
your mother, who is now old and without visible means of income; that you are now asking if you are
subject to donor's tax in waiving your rights and interest in the estate of your late father in favor of your
mother.

In reply, please be informed as follows:

When a person renounces/repudiates his part of the inheritance, the right of accretion takes place and
the same is added or incorporated to that of his co-heirs, co-devisees or co-legatees. The share of the
renouncer shall accrue to his co-heirs in the same proportion that they inherit pursuant to Articles 1018
and 1019 of the New Civil Code of the Philippines. EIASDT
In legal succession, accretion takes place in case of repudiation among heirs of the same degree. This is
so because there is no right of representation. The co-heirs in legal succession are co-owners of the
inheritance, for which reason there is always right of accretion among them, unlike in testamentary
succession where there may or may not be a right of accretion. (Arts. 1018, 977, 969, New Civil Code)

In the instant case, when you, together with your brothers and sisters, waived your inheritance in favor
of your mother, accretion had effectively taken place in the latter's favor and the renounced shares
were added or incorporated to the share of your mother. Undoubtedly, when all of you renounced your
share in the inheritance, you did not donate the property which had never become yours. Such being
the case, the renunciation is not subject to donor's tax imposed under Section 98 of the Tax Code of
1997

Moreso, the inheritance you renounced is an additional inheritance to your mother. Consequently, the
corresponding estate tax computed in accordance with the schedule provided for under Section 84 of
the same Tax Code shall be imposed upon transfer of the net estate to your mother. (BIR Ruling DA-251-
99 dated April 23, 1999)

This ruling is being issued on the basis of the foregoing facts as represented. However, if upon
investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and
void.

Very truly yours,

(SGD.) JAMES H. ROLDAN
Assistant Commissioner
Legal Service
May 3, 2006
BIR RULING [DA-291-06]
Sec. 98; DA-037-2003 dtd 2/6/03
S.M. Basconcillo & Associates Law Offices
R-301 Prudential Bank Bldg.
Aurora Blvd., Cubao, Quezon City
Attention: Atty. Rodolfo M. Manangan

Gentlemen :
This refers to your letter dated April 6, 2006 in behalf of your client, the heirs of ROGACIANO J. DELA
CRUZ, requesting confirmation of your opinion that the renunciation made by the surviving heirs in favor
of one (1) co-heir in their Deed of Extrajudicial Settlement of Estate with Waiver of Rights is exempt
from donor's tax.

It is represented and shown by documents that on February 10, 1977, the spouses Rogaciano and Irenea
dela Cruz executed a Deed of Absolute Sale of three (3) parcels of land, covered by TCT Nos. 13856,
136255 and 54724 of the Registry of Deeds for the Province of Rizal, in favor of their children; that on
February 28, 1977, Rogaciano dela Cruz died intestate; that on September 17, 1977, the heirs of the
decedent executed a Deed of Extrajudicial Settlement of the Estate of Rogaciano dela Cruz with Waiver
of Rights covering the same properties subject of the aforesaid Deed of Absolute Sale; that the surviving
spouse waived all her rights in the properties in favor of all her co-heirs; and that the co-heirs also
waived all their rights in favor of one co-heir, Benjamin dela Cruz. You are of the opinion that the
renunciation made by the surviving wife and the other co-heirs in favor of their son/brother, Benjamin
B. dela Cruz, is exempt from the imposition of donor's tax and that, however, the adjudication of the
conjugal share of the surviving wife in the conjugal partnership is subject to donor's tax, but it must be
computed at fair market value of the property per Tax Declaration at the time of the execution of the
Deed of Extrajudicial Settlement.

In reply, please be informed that as a rule, when a person renounces/repudiates his part of the
inheritance, the right of accretion takes place and the same is added or incorporated to that of the co-
heirs, co-devisees or co-legatees. The share of the one who renounces his part of the inheritance shall
accrue to his co-heirs in the same proportion that they inherit pursuant to Articles 1018 and 1019 of the
New Civil Code of the Philippines.

In the instant case, when the surviving wife, Irenea B. dela Cruz, and the other children, namely,
Cresenciano, Ernesto, Jesus, Maria, Herminigildo and Virginia, all surnamed dela Cruz, waived their
shares in the inheritance in favor of Benjamin B. dela Cruz, their co-heir, accretion had effectively taken
place in the latter's favor and the renounced shares were added or incorporated to his share.
Undoubtedly, when the surviving wife and the other co-heirs renounced their shares in the inheritance,
they did not donate the property which had never become theirs. Such being the case, the renunciation
is not subject to donor's tax imposed under Section 98 of the Tax Code of 1997.

Moreover, the inheritance renounced by the surviving wife and other children to their co-heir, Benjamin
dela Cruz, is an additional inheritance to Benjamin. Consequently, the corresponding estate tax
computed in accordance with the schedule provided for under Section 84 of the same Tax Code, shall
imposed upon transfer of the net estate to Benjamin B. dela Cruz. (BIR Ruling No. DA-251-99 dated April
23, 1999)
It should be emphasized that the subject of the waiver is limited to the share in the inheritance and does
not cover the conjugal share of Irenea B. dela Cruz. Therefore, the adjudication of the renounced
properties to Benjamine B. dela Cruz refers to the conjugal share of the deceased Rogaciano dela Cruz.
Moreover, the conjugal share of Irenea B. dela Cruz in the conjugal partnership between her and her
late husband, if so adjudicated to whomever, is subject to donor's tax computed at fair market value of
property per Tax Declaration or fair market value prescribed by the Commissioner of Internal Revenue,
prevailing at the time of the donation, whichever is higher. (Sec. 102 of the Tax Code)

This ruling is being issued on the basis of the foregoing facts as represented. However, if upon
investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and
void.

Very truly yours,

(SGD.) JAMES H. ROLDAN
Assistant Commissioner
Legal Service
BIR RULING [DA-192-06]
94 & 98; DA-093-2004
Rene Q. Aguas
491 Kayumanggi Street
Mandaluyong City
Sir:

This refers to your letter dated March 14, 2006 requesting for a ruling as to whether repudiation of
inheritance is subject to donor's tax.

It is represented that sometime in February 23, 2005, your wife, Asuncion D. Aguas died intestate,
leaving certain undivided conjugal property more particularly described in Transfer Certificates of Title
Nos. T-209158, T-171875, T-171876, T-178413, T-171865, T-158647, T-157505, T-157510, T-157511, T-
157512, T-157513, T-97583, T-36358 and T-201408; that Asuncion left two (2) heirs namely Rene D.
Aguas, spouse, and Arnel D. Aguas, only son; and that in the Extrajudicial Settlement with Waiver of
Rights", Rene and Arnel repudiated their rights over the inheritance in favor of Michelle Laurice C. Aguas
and Michael Joseph A. Aguas, the grandchildren of Asuncion and Rene.

In reply, please be informed that as a rule, when a person renounces/repudiates his part of the
inheritance, the right of accretion takes place and the same is added or incorporated to that of his co-
heirs, co-devisees or co-legatees. The share of the renouncer shall accrue to his co-heirs in the same
proportion that they inherit pursuant to Articles 1018 and 1019 of the New Civil Code of the Philippines.
In legal succession, accretion takes place in case of repudiation among heirs of the same degree. This is
because there is no right of representation. The co-heirs in legal succession are co-owners of the
inheritance, for which reason there is always right of accretion among them, unlike in testamentary
succession where there may or may not be a right of accretion. (Arts. 1018, 977 and 969, New Civil
Code)

In the instant case, when Rene and Arnel waived their shares in the inheritance in favor of the former's
grandchildren, accretion had effectively taken place in the latter's favor. Undoubtedly, when both Rene
and Arnel renounced their shares in the inheritance, they did not donate the property which had never
become theirs. Such being the case, the renunciation is not subject to donor's tax imposed under
Section 98 of the Tax Code of 1997.

In view of the foregoing, this Office holds that the renunciation or waiver by Rene Q. Aguas and Arnel D.
Aguas of their shares in the estate of Asuncion D. Aguas, in favor of the former's grandchildren, Michelle
and Michael, is not subject to donor's tax pursuant to Articles 1018, 1019 and 1021 of the Civil Code of
the Philippines. (BIR Ruling Nos. DA-093-2004 dated March 1, 2004 and DA-251-99 dated April 23, 1999)
This ruling is being issued on the basis of the foregoing facts as represented. However, if upon
investigation it will be disclosed that the facts are different, then this ruling shall be considered null and
void.

Very truly yours,

Commissioner of Internal Revenue
By:
(SGD.) PABLO M. BASTES, JR.
OIC-Head Revenue Executive Assistant
Legal Service
February 21, 2006
BIR RULING [DA-053-06]
Sec. 86; 105-99; DA-573-99
SGV & Co
6760 Ayala Avenue
Makati City
Attention: M.F.A. Balili
Tax Division

Gentlemen:
This refers to your letter dated January 06, 2006 requesting for a ruling whether your client, the Heirs of
the Late Salvador H. Laurel, is liable for donor's tax and whether the amount of estate tax paid should be
excluded in the computation of the net distributable estate in arriving at the distributive shares of the
heirs.

It is represented that on January on 27, 2004, the late Salvador H. Laurel (SHL) passed away leaving
behind Mrs. Celia Diaz-Laurel and eight (8) children as heirs; that several real and personal properties,
such as houses and lots, residential apartments, residential condominium units, office condominium
units, farmlands, cash, cars, shares of stock and golf shares with a total value of P282,002,628.58 formed
part of the Estate of the late SHL (the "Estate"); that the real properties are located in the following
areas:

a) Barangay Addition Hills, Mandaluyong City

b) Pioneer Highlands, Mandaluyong City
c) Barangay San Antonio, Pasig City
d) Global City, Fort Bonifacio, Taguig City
e) Mabini, South Lipa City
f) Binubusan, Lian, Batangas
g) Luyahan, Lian, Batangas
h) Barangay San Antonio, San Pedro, Laguna
i) Barangay Iruhin, Tagaytay City
j) Filinvest Pagsanjan, Cainta

while the following comprised the personal properties:

a) Cash
b) Golf shares in Baguio Country Club, Calatagan Golf and Country Club, Camp John Hay Country
Club, Canlubang Golf and Country Club, Evercrest Golf Club Resort, Inc., Manila Golf and Country Club,
Mt. Malairayat Golf and Country Club, Sta. Elena Golf and Country Club and Wack Wack Golf and
Country Club;
c) Shares of stock in Lyceum of the Philippines, Inc., Sound Development Corporation, LAHI, Inc.,
Dorel Development Corporation, and PLDT; and
d) Six (6) motor vehicles.

that on July 23, 2004, Mrs. Celia Diaz-Laurel, surviving spouse of the late SHL, filed the estate tax return
of her late husband with the Bureau of Internal Revenue (BIR), Revenue District Office (RDO) No. 41,
Mandaluyong City, pursuant to Section 90 of the Tax Code of 1997; that as the Estate was not in a
financial position to pay in full the total amount of the estate tax, Mrs. Laurel, in her own behalf, and on
behalf of the other surviving heirs, requested an extension of time to pay balance of the said tax; that
inasmuch as the Estate lacked sufficient cash to pay the estate taxes due, Mrs. Laurel obtained approval
from RDO No. 41 to sell certain golf shares and apply the proceeds thereof to the payment of estate
taxes; that as a sign of her earnest desire to pay the estate tax, Mrs. Laurel made an initial payment of
P5,000,000.00 as partial fulfillment of the estate tax due; that this was later followed by payments of
P11,421,250.00 on February 16, 2005, P837,225.00 on February 21, 2005, and P5,043,535.00 on May 04,
2005 to RDO No. 41; that on June 16, 2005, RDO No. 41 sent a notice of deficiency tax due in the
amount of P7,833,012.12 to the Administrator of the Estate which was likewise duly paid; that in sum,
the Heirs paid a total of P30,135,015.13 in estate taxes and interest; that on July 01, 2005, RDO No. 41
sent a letter to the Administrator of the Estate, acknowledging full payment of the estate tax; that the
letter further acknowledged their duty to issue the corresponding CAR, provided the deed of
extrajudicial partition is submitted to them.

It is further represented that on July 31, 2005, the Heirs, by themselves and/or represented by Mrs.
Celia Diaz-Laurel as guardian or attorney-in-fact of some of them, met and decided not to divide the
properties pro indiviso, for the reason that some of the heirs wanted specific properties for their own
individual sentimental preferences; that in the course of the discussion, the heirs agreed to allow Mrs.
Celia Diaz-Laurel to have first choice of the properties comprising her one-half (1/2) share in the estate
as surviving spouse, with the net distributable estate to be divided, to the extent possible, in accordance
with their intestate shares taking into consideration the preferences of each individual heir; that the said
method resulted in an uneven distribution of the estate wherein several heirs received more than the
value of their supposed shares, with some heirs receiving less; that the heirs agreed to reimburse Mrs.
Celia Diaz-Laurel for the estate taxes amounting to P30,135,015.13 which she advanced on everyone's
behalf; that on August 26, 2005, the heirs executed a Deed of Extrajudicial Settlement and Partition; that
all the real and personal properties comprising the gross estate the value of which was P282,002,628.58
were distributed among the heirs; that in compliance with the directive of the July 1, 2005 letter from
RDO No. 41, you requested, on behalf of the heirs, for the issuance of the Certificate Authorizing
Registration (CAR) for the properties forming part of the Estate, and submitted the Deed of Extrajudicial
Settlement and Partition to the BIR on October 19, 2005; that upon follow-up on October 21, 2005, you
were informed by RDO No. 41 that they could not issue the tax clearance and the CAR on the ground
that a certain alleged heir by the name of Pia Pilapil-Gonzalo, contested your request; that
subsequently, you learned that in a letter dated September 20, 2005, Ms. Gonzalo, through her counsel,
Atty. Bayani Loste of the Fortun Narvasa and Salazar Law Offices, did not contest the Deed, nor did she
request to hold in abeyance the issuance of the tax clearance or of the CAR; that she merely requested
for a copy of the Estate Tax Return, the list of properties and copies of the transfer certificates of title
(TCTs) covering the real properties involved; that in the letter endorsement of the BIR's Revenue Region
No. 7 dated December 15, 2005, your client's right to the issuance of the CAR was upheld; that the same
office, however, ruled that the heirs were liable for donor's tax and directed RDO No. 41 to study the
matter and determine the appropriate tax due, to wit:

"In the instant case, there appears to have an implied waiver of the inheritance among the heirs. . . .
Accordingly, said implied waiver shall be treated as an act of disposition of the share of the inherited
property since the benefits thereof are not enjoyed by everybody but only by one or more heirs and
therefore the same shall be subject to the Donor's Tax. In this connection, a review of the Extrajudicial
Settlement be made to determine if the same would result into unequal distribution of the inheritance
taking into account the value of the estate as a whole viz a viz the value of the share to be received by
the heirs in accordance with the Extrajudicial Settlement. . . . " (Emphasis supplied)
In reply thereto, please be informed that in legal succession, accretion takes place in case of repudiation
among heirs of the same degree. This is so because there is no right of representation. The co-heirs in
legal succession are co-owners of the inheritance, for which reason there is always a right of accretion
among them, unlike in testamentary succession where there may or may not be a right of accretion
(Arts. 1018, 977, 967, Civil Code of the Philippines). However, if the renunciation by an heir or heirs is
made in favor of one or more heirs but not all the other heirs, the act of renunciation is in effect all act
of disposition inasmuch as the act of disposition and the benefits thereof are not enjoyed by everybody
but by one or more heirs (Arts. 1050, 1051, 1016, Civil Code).

In the instant case, there is no specific repudiation on the part of one or some of the heirs in favor of
another heir or heirs to the exclusion of the other heirs. Everyone received a share in the estate. While
the values of the properties received by each heir were not equal, this by itself cannot be interpreted as
repudiation. Since most of the estate left behind by the late Salvador H. Laurel consisted of real
property, it would be impossible, if not absurd, to expect that the properties distributed to each of the
heirs would be of equal value, especially since they decided to divide the estate in accordance with their
individual preferences for and sentimental attachments to the properties.

Further, on the issue of whether the amount of estate tax paid should be excluded in the computation
of the net distributable estate in arriving at the distributive shares of the heirs, this Office rules
otherwise. Section 86 of the 1997 Tax Code, as amended, enumerates the items allowed as deductions
against the gross estate of the decedent to be able to determine the net taxable estate. Such
enumeration is exclusive thereby those items not mentioned therein are deemed excluded. Considering
that the amount corresponding to the estate tax paid is not among those items enumerated in Section
86 of the Tax Code, as amended, it is therefore deemed excluded in the items allowed as deductions
against the gross estate. Thus, for taxation purposes, specifically for the purpose of computing the net
taxable estate, the amount corresponding to the properties sold to cover the amount of estate tax still
has to form part of the gross estate of the decedent. The said amount still has to be considered in the
distribution of the corresponding shares due to the heirs though the same, in actuality, may not be
treated as part of the heirs' respective shares in the estate.

Lastly, since the correctness of the payment of the estate tax due on the Estate of the late Salvador H.
Laurel has already been established, the revenue district office concerned is hereby directed to
forthwith issue the CARs covering the properties forming part thereof.

This ruling is being issued on the basis of the foregoing facts as represented. However, if upon
investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and
void.

Very truly yours,

Commissioner of Internal Revenue
By:
(SGD.) JAMES H. ROLDAN
Assistant Commissioner
Legal Service
February 22, 2005
BIR RULING [DA-060-05]
90 (A); 97
105-99 dtd July 13, 1999
Atty. Bienvenido J. Medel
Business Center, The Sulu Hotel
Matalino Road, Diliman, Quezon City

Sir:
This refers to your undated letter, in behalf of your clients, MELINDA DY-LIACO-NANA and ANNA MARIE
R. NANA-ROQUE, in connection with the proposed donor's tax assessment due on the Extrajudicial
Settlement with Waiver of Rights executed between themselves.

It is represented that then spouses now decedents Aurora Robles Nana and Santos Nana owned a parcel
of land covered by Transfer Certificate of Title (TCT) No. 275699 of the Register of Deeds for the
Province of Rizal; that the decedent left one legitimate child, Anna Marie R. Nana-Roque; that in 1983,
Aurora Robles Nana died intestate; that her husband, Santos Nana and her daughter, Anna Marie Nana-
Roque succeeded to her estate consisting of one-half of the said parcel of land; that Santos Nana
subsequently married Melinda Dy-Liaco; that in 1995, Santos Nana died intestate; that his estate
consisting of three-fourths (3/4) of the said parcel of land was passed on to his second wife, Melinda Dy-
Liaco-Nana and his legitimate child by the first marriage, Anna Marie Nana-Roque; that in 1998, an
extrajudicial settlement was executed between Melinda D. Nana and Anna Marie Nana-Roque; that the
former waived her share in the estate in favor of the latter; that you are presently in the process of
paying the estate taxes due on the estates of Aurora Robles-Nana and Santos Nana for the registration
of the property in the name of Anna Marie Nana-Roque; that on September 14, 2004, you requested the
computation of the estate taxes; that the Bureau is, however, assessing the donor's tax on the waiver
made by Melinda Dy-Liaco-Nana in favor of Anna Marie Nana-Roque; that you hold the view that the
assessment of a donor's tax on the waiver by Melinda Dy-Liaco-Nana in favor of Anna Marie Nana is
inappropriate since the said parcel of land belongs to the conjugal partnership of Aurora-Robles Nana
and Santos Nana; that, as such, the second wife, Melinda D. Nana, had no share in the said property and
the waiver she executed was in fact, a recognition of her lack of ownership and/or interest in the said
parcel of land; that while the second wife is entitled to inherit from the deceased husband, the waiver of
inheritance is merely a case of accretion or non-acceptance of inheritance which is not subject to
donor's tax, since the second wife at the time the waiver was made, did not yet own the property she
was supposed to inherit. (BIR Ruling DA 251-99 dated April 23, 1999)

In reply, please be informed that pursuant to Section 98 of the Tax Code of 1997, a Donor's Tax is levied,
assessed, collected and paid upon the transfer by any person, resident or non-resident, of the property
by gift, whether the transfer is in trust or otherwise, whether direct or indirect and whether the
property is real or personal, tangible or intangible. In BIR Ruling #455-93 where the renunciation by the
wife of properties inherited from her husband in favor of first-born grandchildren, a donor's tax was
assessed since the renunciation by the wife was made in favor of one or more heirs but not all the other
heirs, the act is in effect an act of disposition inasmuch as the act of disposition and the benefits thereof
are not enjoyed by everybody but by one or more heirs. (Arts. 1050, 1051, 1016, New Civil Code)

However, where the renunciation was made in favor of a co-heir or an heir of the same degree, the
renunciation or waiver of that share is exempt from donor's tax since as a general rule, when a person
renounces/repudiates his part of the inheritance, the right of accretion takes place and the same is
added or incorporated to that of the co-heirs, co-devisees or co-legatees. The share of the one who
renounces his part of the inheritance shall accrue to his co-heirs in the same proportion that they inherit
pursuant to Articles 1018 and 1019 of the New Civil Code of the Philippines.

In legal succession, accretion takes place in case of repudiation among heirs of the same degree. This is
so because there is no right of representation. The co-heirs in legal succession are co-owners of the
inheritance, for which reason there is always the right of accretion among them unlike in testamentary
succession where there may not be a right of accretion (Arts. 1018, 977, 969, New Civil Code) thus a
waiver of rights over the share in the inheritance by a co-heir is not subject to donor's tax.

This Office, however, is confronted with the issue on whether the renouncer Melinda Dy-Liaco Nana is a
co-heir of Anna Marie Nana-Roque, as to warrant the application of the foregoing rule. Renunciation of
inheritance presupposes that succession has taken place and taking into consideration the facts of this
case, we opine otherwise.

In fine, Section 103 of the New Family Code of the Philippines provides, "that upon the termination of
the marriage by death, the community property shall be liquidated in the same proceeding for the
settlement of the estate of the deceased within one year from death of the spouses. However, should
the surviving spouse contract a subsequent marriage without complying with the foregoing
requirements, a mandatory regime of complete separation of property shall govern the property
relations of the subsequent marriage."

If the surviving spouse does not settle the estate of the deceased spouse and liquidate their absolute
community property, the heirs of the deceased spouse may be prejudiced by the subsequent marriage
of the surviving spouse because under the Code, the latter would have an absolute community with his
second wife and the community property of the first marriage might be merged with the absolute
community of the second marriage. Hence, the Code prescribes a regime of complete separation of
property in the second marriage so as to protect the heirs of the deceased first spouse.

Moreover, in Section 104 of the same Code, provides that, in cases of two or more marriages conducted
by the same person, in liquidating simultaneously the community property of each, the respective
capital, fruits and income shall be determined upon such proof as may be considered according to the
rules of evidence.

Since the community property of then spouses Aurora Robles Nana and Santos Nana remained
unliquidated until Santos Nana's subsequent marriage to Melinda Dy-Liaco Nana, decedent Santos Nana
was mandated by law to exercise a complete separation of community of property with his second
marriage. Thus, the subject property which is the parcel of land could be readily identified as belonging
to the community of property of the first marriage.

Corollarily, Melinda Dy-Liaco Nana did not in any manner at any point in time, owned, or co-owned the
subject parcel of land in whole or in part as this is a property rightfully identified and belonging to the
community of property of the first marriage between then Sps. Aurora and Santos Nana. Thus, when she
renounced her share in the subject property, she is indeed renouncing nothing, as the property was not
a part of the community property of the second marriage. As such, the waiver she executed was in fact,
void and produces no effect. The whole parcel of land rightfully belongs to Anna Marie Nana-Roque by
way of legal succession.
In view of the fact that Melinda Dy Liaco and Anna Marie Nana are not co-heirs to the subject property,
the former cannot in any manner, participate in the adjudication in respect thereof. Furthermore, based
on the above representation, we also opined that the renunciation is considered not to have taken place
at all. Therefore, the applicability of the rules regarding renunciation of shares in favor of co-heirs is not
proper. Accordingly, for lack of factual basis that would warrant the imposition of donor's tax, this Office
hereby rules that even with the execution of the Extrajudicial Settlement with Waiver of Rights by the
parties, the adjudication of the subject property by Anna Marie Nana-Roque is not subject to donor's
tax. It is, however, subject to the estate tax imposed under Sec. 84 of the Tax Code of 1997.

This ruling is being issued on the basis of the foregoing facts as represented. However, if upon
investigation, it will be disclosed that the facts are different then this ruling shall be considered null and
void.

Very truly yours,

(SGD.) JOSE MARIO C. BUÑAG
Deputy Commissioner
Legal and Inspection Group