Documente Academic
Documente Profesional
Documente Cultură
ESTATE TAX
FLABERT VILLASENCIO, CPA
Estate Tax
oImposed on the right of the deceased to
transmit his/her properties to his/her legal
heirs upon death
oBased on laws in force at the time of death
Not Over
Estate Tax
Tax of
Excess
Plus %
Over
200,000
Exempt
200,000
500,000
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
465,000
300,000
765,000
Philippine
Credit
Estate Tax = Actual estate tax paid to foreign country whichever is LOWER
2. TWO or MORE Foreign Countries
Limit A: Per Foreign Country
Net Estate per Foreign Country
x
Phil. Estate Tax
Entire Net Estate
Limit B: By Total
Net Estate ALL Foreign Country
Entire Net Estate
OR
The Actual Estate Tax paid to Foreign Country, LOWER Value
Net Estate
1,000,000
2,000,000
3,000,000
6,000,000
2,000,000 x 615,000 =
135,000
135,000
Australia
3,000,000 x 615,000 = 307,500
6,000,000
Actualvs
365,000
307,500
Foreign Country
5,000,000 x 615,000 =
6,000,000
Actual (135,000 + 365,000)
vs
vs
442,500
442,500
Tax Credit 442,500
500,000
442,500
)
W
C
2
/
1
(
:
K
R
O
S E AT W
5-11
NS
IO
T
LU
O
S
R
U
O
Y
W
O
H
S
Y#
5-13 #DO IT INDIVIDUALL
E
IC
O
H
C
R
U
O
Y
F
O
ER
W
S
N
A
AND THE
R
E
TT
LE
E
TH
E
IT
R
W
#
5-18
ANSWERS:
Problem 511 B
Conjugal Properties
Funeral expense, limit
Judicial expenses
Claims against properties
Net conjugal estate
P3,400,000
( 200,000)
( 250,000)
( 550,000)
P2,400,000
Problem 513 A
Estate tax of P5,000,000
P465,000
ANSWERS:
Problem 518 B
Total gross estate (P1,700,000 + P800,000)
Less: Deductions Net taxable estate
Net Taxable Estate
2,500,000
1,500,000
1,000,000
15,000
40,000
55,000
=
=
=
=
15,000
=
=
=
=
82,000
97,000
26,675
70,325
1,000,000
10,000
200,000
400,000
99,456
1,743,200
Administrative Requirements
Value of Gross Estate
Exceeds
Exceeds
Exceeds
Requirements
20,000 200,000
1.Notice of Death (within 2 months)
2.Estate Tax Return (w/in 6 months)
3. CPA Certificate (w/in 6 months) NO
2,000,000
Yes
Yes
No
Yes
No
Yes
Yes
Yes
Additional Requirement
-Registering the estate of the decedent and getting a separate TIN for the estate
Liability for Payment of Estate Tax
1.Primary Obligation- Estate through Executor or Administrator (severally liable)
2.Subsidiary Obligation- the Heirs or Beneficiaries
To the extent of their obligation but in no case shall it exceed the value of their
inheritance.
Administrative Requirements
Surcharges, Interests and Penalties
- imposed in the event of violation of the law, criminal penalties and civil
liabilities.
Payment of Estate Tax by Installment
- may be allowed provided:
1.A clearance shall be released only with respect to the property on which
tax has been paid
2.Any amount paid after the due date shall be subject to applicable penalty
3.If the late payment has been approved by the Commissioner or his
representative, the penalty shall only be the interest.
4.The Commissioner may enforce action against the estate after the due
date of the estate tax provided that all the applicable laws and required
procedures are observed.
)
W
C
2
/
1
(
:
K
R
O
S E AT W
5-6
5- 9
5-14
5-17
5-19
5-20 PAIR #SHOW YOUR SOLUTIONS
#DO IT BY
5-21 HE ANSWER OF YOUR CHOICE
T
#WRITE THE LETTER AND
ANSWERS:
Problem 56 B
P3,300,000
( 165,000)
( 1,567,500)
( 1,000,000)
P 567,500
ANSWERS:
Problem 59 D
Exclusive
Property cash
P1,000,000
Family home
Transfer for public use
(1,000,000)
Funeral expense allowed
Net conjugal estate
Family home (P800,000/2)
Standard deduction
Net estate
Share of surviving spouse (P4,600,000 x 50%)
Net taxable estate
Conjugal
P4,000,000
800,000
( 200,000)
P4,600,000
(400,000)
(1,000,000)
P3,200,000
(2,300,000)
P 900,000
ANSWERS:
Problem 514 D
Amounts
ANSWERS:
Problem 517 C
Tax credit P100,000 x (2M/5M)
P40,000
Problem 519
Conjugal
P1,500,000
Real property
Inherited property
Other properties
500,000
Gross estate
P2,000,000
Less: Deductions:
ELITE:
Funeral expenses
100,000
Judicial expenses
80,000
Claims against the estate
300,000
Transfer for public use
20,000
Total deductions
500,000
Net conjugal/exclusive estate
P1,500,000
Less: Special deductions:
Standard deduction
Medical expense
Net estate before share of surviving spouse
Less: Share of surviving spouse (P1,500,000 x 50%)
Net taxable estate
Estate tax: Tax on P200,000 P - 0 Tax on excess (P50,000 x 5%) 2,500
Estate tax due
P 2,500
Exclusive
Total
P700,000
P700,000
P2,700,000
P700,000
500,000 \
P2,200,000
1,000,000
200,000
P1,000,000
750,000
P 250,000
Problem 520
Family home Philippines
Family business Philippines
Properties USA
.
Gross estate
Deductions: ELITE
Funeral expense
Net conjugal/exclusive
Less: Special deduction
Std. deduction
Conjugal
Exclusive
P4,000,000
P1,000,000
P1,000,000
P5,000,000
200,000
P3,800,000
P1,000,000
P4,800,000
P2,000,000
2,000,000
Family home
Net estate before share of surviving spouse
Less: Share of surviving spouse (P3,800,000 x 50%)
Net taxable estate
Tax on P500,000
Tax on excess (P400,000 x 8%)
Estate tax due
Less: Estate tax credit allowed (P47,000 x 8/28) lower
Estate tax still due and payable
Total
1,000,000
P15,000
32,000
P47,000
13,429
P33,571
1,000,000
P2,800,000
1,900,000
P 900,000
Problem 521
Gross estate*
Less Deductions:
Ordinary deductions:
Funeral expenses
Judicial expenses
Other deductions
Vanishing deductions
Net conjugal/exclusive estate
Special deductions:
Standard deduction
Family home (50% is P1,500,000)
max. allowed
Conjugal
P5,800,000
(200,000)
(500,000)
(100,000)
P5,000,000
Exclusive
P4,200,000
( 92,000)
P4,108,000
Total
10,000,000
9,108,000
(1,000,000)
(1,000,000)
(500,000)
(200,000)
P6,408,000
2,500,000
P3,908,000