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  1. #1
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    Jun 2013
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    Estate Tax and Donor's Tax


    I know this is a Business Forum but I badly needed factual and intelligent information and insights about Estate Tax and Donor's Tax...

    Both of my parents are deceased and they have left us some properties. But now, I'm having problems with BIR... I was informed na hindi pa daw matatransfer sa amen ung mga properties, because of the Estate Tax...

    They told me na medyo malaki daw po ung babayaran namin (estimated is 300 to 500 thousand) sa estate tax para matransfer namin iyon and kaya daw malaki ung babayaran namin is because hindi agad sya naasikaso, like when my father passed away almost 9 years ago and ung mother ko nmn is almost 3 year ago so ang pagkakaintindi ko sa sinabi nila is that naipon sya since my father's date of death to the present.

    Now, that is my problem, wla akong ganung amount na mailalabas agad-agad... I can earn it yes pero i'm worried sa time.. kasi syempre I assume pag tumagal pa sya mas lalong lalaki...

    I'm looking for every possibility na mapababa ung value nya...
    Additional info...meron kaming "Deed of Donation" na ginwa ng parents nmin by the year 1993...
    I've tried to read about taxation... and un dun ako nagka-idea about Donor's Tax... is there a possiblity na bumababa ung value ng babayaran namin und "Donor's Tax" tax form?

    Please, kindly give me suggestions on what should I do and what can I do?

    Thanks in advance!

  2. #2
    Chief viclogic's Avatar
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    Jul 2011
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    That would require computation and comparison between donor's tax and estate tax. You also have to consider both their penalties.

    Donor's Tax Rates
    Effective January 1, 1998 to present

    Net Gift Over But not Over The Tax Shall be Plus Of the Excess Over
    100,000.00 exempt
    100,000.00 200,000.00 0 2% 100,000.00
    200,000.00 500,000.00 P 2,000.00 4% 200,000.00
    500,000.00 1,000,000.00 14,000.00 6% 500,000.00
    1,000,000.00 3,000,000.00 44,000.00 8% 1,000,000.00
    3,000,000.00 5,000,000.00 204,000.00 10% 3,000,000.00
    5,000,000.00 10,000,000.00 404,000.00 12% 5,000,000.00
    10,000,000.00 and over 1,004,000.00 15% 10,000,000.00

    Estate Tax Rates
    Effective January 1, 1998 up to Present

    If the Net Estate is:

    Over But not Over The Tax Shall Be Plus Of the Excess Over
    P 200,00.00 Exempt
    P200,000.00 500,000.00 0 5% P 200,000.00
    500,000.00 2,000,000.00 P 15,000.00 8% 500,000.00
    2,000,000.00 5,000,000.00 135,000.00 11% 2,000,000.00
    5,000,000.00 10,000,000.00 465,000.00 15% 5,000,000.00
    10,000,000.00 1,215,000.00 20% 10,000,000.00

    For computation of penalties, you can read this post from BusinessTips.Ph:
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  3. #3
    New Member eppie's Avatar
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    Jun 2013
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    Hi Juanadelacruz

    Using the Deed of Donation that your parents issued in 1993 may decrease the tax but only if that Deed of Donation has not been notarized yet. If notarized na kasi yan in 1993 you will incur around 20 year in penalties.

    Also, depende pa din yan sa type of Deed of Donation that you have, there are two types:

    1. Inter Vivos - You can transfer the title in your name even if the donor is still alive.


    2. Mortis Causa - The property is effectively yours after the donor dies.

    We also transferred a property using a Deed of Donation (inter vivos) five years ago. At first we planned to use the existing 3-year old notarized Deed of Donation and because of the penalties involved nagpagawa na lang kami ng bagong Deed of Donation and have it notarized ng may funds na kami for title transfer. But since both your parents are now gone, you don't have the option na to create a new deed of donation.

    I'm not sure about the computation of penalties (if any) if ever "mortis causa" ang inyong Deed of donation. I think the best thing you can do is consult a lawyer, mas maganda if CPA lawyer (like we did), if may kakilala ka okay if wala, pwede ka naman magpa-legal advise (I think around P3,000 lang ang fee.)

    You have to do the pros and cons of Donor's Tax and Estate Tax and it's best to do it with an expert.

    Hope this helps. God Bless!
    “Believe you can & you're halfway there.” ~ T. Roosevelt
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