16 Questions
What is the definition of a gratuitous transfer?
A transfer that is essentially a donation and does not require financial consideration
When does the Estate Tax accrue?
Upon the death of the decedent regardless of the postponement of possession or enjoyment of the estate
What does the Estate Tax apply to?
The privilege to control the disposition of property upon death
What type of tax is Donor's tax considered as?
Excise tax
When does succession take place according to the text?
At the moment of death of the decedent
What is the nature of gratuitous transfers according to the text?
They are essentially donations without financial consideration
Who is primarily liable for filing and paying the applicable estate taxes?
The administrator or executor
When must the estate tax return be filed if the decedent died before 2018?
Within 6 months after death
What law should be applied for the estate tax if the decedent died upon/during the effectivity of the TRAIN Law?
The law in force at the time of death
Who is secondarily liable for filing and paying the applicable estate taxes?
Any of the heirs
What is succession?
A mode of acquisition by which property is transferred after one's death
According to the Civil Code of the Philippines, what is a 'will'?
A formal document that controls estate disposition and takes effect after one's death
Under the Civil Code of the Philippines, who are considered forced heirs?
Spouse and children
What does 'net taxable estate' refer to in the context of estate taxation?
The amount of estate tax payable after deductions and credits
What does 'gross estate' include in the computation of estate tax?
All assets and properties owned by the decedent at the time of death
'Special deductions' are applicable to which type of decedent?
'Special deductions' apply to both single and married decedents
Study Notes
Estate Taxation
- A gratuitous transfer is a transfer of property without consideration or payment, such as gifts, donations, or inheritances.
- Estate Tax accrues at the time of death of the decedent.
Scope of Estate Tax
- The Estate Tax applies to the transfer of the decedent's property, including real and personal properties, tangible and intangible assets.
Donor's Tax
- Donor's tax is considered a type of gift tax.
Succession
- Succession takes place at the moment of the decedent's death.
- It is the process of transferring the decedent's property to the heirs.
Nature of Gratuitous Transfers
- Gratuitous transfers are voluntary and without consideration, and are subject to estate tax.
Liability for Estate Tax
- The executor or administrator of the estate is primarily liable for filing and paying the applicable estate taxes.
- The heirs and beneficiaries are secondarily liable for filing and paying the applicable estate taxes.
Filing of Estate Tax Return
- If the decedent died before 2018, the estate tax return must be filed within six months from the date of death.
- For deaths occurring during the effectivity of the TRAIN Law, the Tax Reform for Acceleration and Inclusion (TRAIN) Law should be applied.
Succession and Will
- Succession is the process of transferring the decedent's property to the heirs.
- A 'will' is a document that declares the intentions of the testator regarding the disposition of his property after death.
Forced Heirs
- Forced heirs, as defined in the Civil Code of the Philippines, include the surviving spouse and legitimate children.
Net Taxable Estate
- Net taxable estate refers to the remaining value of the gross estate after deducting the allowable deductions and exemptions.
Gross Estate
- Gross estate includes the total value of all properties, real and personal, tangible and intangible, that the decedent owned at the time of death.
Special Deductions
- Special deductions are applicable to estates of decedents who were 81 years old and above at the time of death.
Test your knowledge on estate and transfer taxes, including taxes imposed on gratuitous disposition of private properties, donations, and the transfer of ownership free of financial consideration.
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