Estate Tax

Definition of Estate Tax- Tax imposed on the transmission of properties of the decedent upon his death to his lawful heirs and beneficiaries.

Purpose of Estate Tax- To avoid the undue accumulation or concentration of wealth on some individuals, and to raise revenue for the support of the government.

Rates of Estate Tax

Over	But not Over	The Tax Shall Be	Plus	Of Excess Over
-	P200,000	EXEMPT	-	-
P200,000	P500,00	0	5%	P200,000
P500,000	P2,000,000	15,000	8%	P500,000
P2,000,000	P5,000,000	135,000	11%	P2,000,000
P5,000,000	P10,000,000	465,000	15%	P5,000,000
P10,000,000	And Over	1,215,000	20%	P10,000,000

Formula:

Gross Estate

Less Deductions

Equals: NET ESTATE

Less: Exemptions (First 200,000, Sec. 84)

Equals: Taxable Net Estate

Times: Rate Sec. 84

Equals: Estate Tax Due

Less: Tax Credit (if Any)

Taxpayer

Estate Tax applies to the following taxpayers:

1. Resident Citizen

2. Nonresident Citizen

3. Resident Alien

4. Nonresident Alien

If the decedent is a resident citizen, non resident citizen and resident alien, the estate tax applies to all the property of the decedent located within and without the Philippines.

If the decedent is a nonresident alien, the estate tax law applies only to the property of the decedent deemed located in the Philippines as determined under the tax code.