Inheritance Tax

What’s inheritance tax in the Philippines?

Inheritance tax is a tax placed on estates or assets that are passed on via a will of a deceased or the law of succession. In the Philippines, the government refers to inheritance tax as ‘estate tax.’ This isn't a tax on a property. Rather it's a tax on the transmitting of the estate of the deceased upon death to the heir. Someone’s estate can include property, but it’s not limited to property, it also includes everything else of value that the deceased owned..

Amendment of the Estate Tax Rate

Section 22 of the TRAIN law amends Section 84 of the Tax Code, which provides for the estate-tax rate. Previously, a  tax based on the value of the net estate of the decedent, whether resident or nonresident of the Philippines, was computed based on a tax schedule where an estate worth P200,000 and over was taxed from 5 percent to 20 percent. Under the TRAIN law, it will now be subject to a flat rate of 6 percent.

What types of inheritance taxes are there in the Philippines?

Ownership of the property in the Philippines

Philippine law identifies compulsory heirs who are entitled to parts of an estate. This may leave only a portion of the estate to be disposed of at will.

Person Reserve
Spouse 25% if only one legitimate child; equal portion if more than one child
1 legitimate child 50%
2 or more legitimate children 50% split equally

Let’s say that a person is survived by a spouse and 5 legitimate children. The children would each receive 10% of the estate (totalling 50%) and the spouse would receive an equal share of 10%, leaving 40% of the estate left to be disposed of at will.

If a property is owned by several parties, for instance by both spouses, then only the part that was owned by the deceased will be part of the estate.

In the absence of a will, this is the order of heirs, according to the Filipino laws of succession:

  • Legitimate children
  • Legitimate parents
  • Illegitimate children
  • Surviving spouse
  • Brothers and sisters, nephews and nieces
  • Other relatives
  • Government

Here's an informative video clip on the right division of Inheritance Tax from CNN Philippines, something we All must be aware of as this causes a lot of squabbles amongst family members ( take note that money changes people, so it's always good to be informed so as not to be misled  ), view the video clip at : https://www.facebook.com/CNNPhilippines/videos/2063063687266853

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Thank you.

robert

Robert G. Sarmiento Properties

Professional Affiliation :

Philippine Association of Real Estate Boards

Member, City of Taguig Real Estate Board 2016, 2017

Real Estate Broker’s Association of the Philippines 2000 - 2015

President, Greenhills Chapter 2008, 2009

Philippine Association of Real Estate Boards

San Juan Mandaluyong Chapter 1998, 1999

PRC # 6569

PRC Lecturer’s License # 0294

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Robert G. Sarmiento Properties
Professional Affiliation :
Philippine Association of Real Estate Boards
Member, City of Taguig Real Estate Board 2016 - 2019
Real Estate Broker’s Association of the Philippines 2000 - 2015
President, San Juan 2008, 2009
Philippine Association of Real Estate Boards
San Juan Mandaluyong Chapter 1998, 1999
PRC # 6569
PRC Lecturer’s License # 0294
+ 632 5536051 ( trunkline )
+ 632 4781316 ( telefax )
+ 632 8561365 ( line 3 )
+ 632 8041701 ( line 4 )
+ 6325148481 ( mobile landline )
+ 63 917 5364829 ( globe )
 

Contact

Give us a call at

+ 632 5536051 ( trunkline )
+ 632 4781316 ( telefax )
+ 632 8561365 ( line 3 )
+ 632 8041701 ( line 4 )
+ 6325148481 ( mobile landline )
+ 63 917 5364829 ( globe )
 

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