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Questions and Answers
Which type of transfer tax applies to both resident citizens and non-resident aliens regarding estate transfer?
Which type of transfer tax applies to both resident citizens and non-resident aliens regarding estate transfer?
- Ad valorem tax (correct)
- Fiscal tax
- National tax
- Proportional tax
What determines the situs of an estate transfer for a decedent?
What determines the situs of an estate transfer for a decedent?
- Location at the point of death (correct)
- Place where the estate is registered
- Location of the decedent's primary residence
- Place where the estate is valued
Which tax classification applies to a resident citizen who makes a donation while alive?
Which tax classification applies to a resident citizen who makes a donation while alive?
- Inter-vivos (correct)
- Mortis Causa
- Direct tax
- National tax
Non-resident aliens are subject to which type of transfer tax concerning donations in the Philippines?
Non-resident aliens are subject to which type of transfer tax concerning donations in the Philippines?
Inter-vivos tax situs is determined by which of the following?
Inter-vivos tax situs is determined by which of the following?
What is the primary characteristic of a bilateral transfer?
What is the primary characteristic of a bilateral transfer?
Which of the following best describes a unilateral transfer?
Which of the following best describes a unilateral transfer?
What type of transfer tax is imposed on donations made during a person's lifetime?
What type of transfer tax is imposed on donations made during a person's lifetime?
Who is primarily responsible for paying the estate tax?
Who is primarily responsible for paying the estate tax?
What defines a complex transfer?
What defines a complex transfer?
When does the valuation of property take place in the case of a unilateral transfer mortis causa?
When does the valuation of property take place in the case of a unilateral transfer mortis causa?
What is an example of a unilateral transfer?
What is an example of a unilateral transfer?
Which of the following statements is true regarding donor's tax and estate tax?
Which of the following statements is true regarding donor's tax and estate tax?
What is the condition under which intangible personal properties of non-resident aliens are exempt from Philippine transfer taxes?
What is the condition under which intangible personal properties of non-resident aliens are exempt from Philippine transfer taxes?
What distinguishes a donation mortis causa from a donation inter-vivos?
What distinguishes a donation mortis causa from a donation inter-vivos?
Which of the following is true about transfers in contemplation of death?
Which of the following is true about transfers in contemplation of death?
What must occur for an incomplete transfer to take place?
What must occur for an incomplete transfer to take place?
When is a transfer intended to take effect at death classified?
When is a transfer intended to take effect at death classified?
What document expresses a decedent's intention regarding property distribution after death?
What document expresses a decedent's intention regarding property distribution after death?
Which type of donation occurs during the lifetime of the transferor?
Which type of donation occurs during the lifetime of the transferor?
Which of the following is NOT a characteristic of an incomplete transfer?
Which of the following is NOT a characteristic of an incomplete transfer?
What must occur for a conditional transfer to be regarded as completed inter-vivos?
What must occur for a conditional transfer to be regarded as completed inter-vivos?
Under what circumstances do revocable transfers become completed?
Under what circumstances do revocable transfers become completed?
What is a requirement for complex incomplete transfers to be taxable?
What is a requirement for complex incomplete transfers to be taxable?
What does the valuation for mortis causa transfers take into account?
What does the valuation for mortis causa transfers take into account?
Which type of transfer is never subject to transfer taxes upon delivery?
Which type of transfer is never subject to transfer taxes upon delivery?
Which condition would lead to void transfers?
Which condition would lead to void transfers?
How is the valuation for inter-vivos transfers determined?
How is the valuation for inter-vivos transfers determined?
What is typically not a characteristic of complex incomplete transfers?
What is typically not a characteristic of complex incomplete transfers?
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Study Notes
Transfer Taxation Overview
- Transfer is the transmission of property from one person to another.
- Types of transfer include Bilateral, Unilateral, and Complex.
Types of Transfers
- Bilateral Transfers: Involve consideration (payment), categorized as onerous transactions (e.g., sales, barter).
- Unilateral Transfers: Occur without consideration, referred to as gratuitous transactions (e.g., donations).
- Complex Transfers: Occur when property is transferred for less than its full value.
Unilateral Transfers
- Inter-vivos: Voluntary transfers during the donor's lifetime; subject to donor's tax.
- Mortis Causa: Involuntary transfers upon the decedent's death; subject to estate tax.
Types of Transfer Taxes
- Donor's Tax: Related to inter-vivos transfers, structured as an annual tax paid by the donor.
- Estate Tax: Associated with mortis causa transfers, designed as a one-time tax paid by the decedent's executor or heirs.
Nature of Transfer Taxes
- Classified as privilege taxes, ad valorem taxes, proportional taxes, national taxes, direct taxes, and fiscal taxes.
Taxpayer Classification
- Residents: Subject to global taxation on inter-vivos donations and estate.
- Non-Residents: Taxed only on Philippine donations and estates.
Situs of Transfer
- Mortis Causa: Based on the decedent's location at death.
- Inter-vivos: Based on the property's location at the time of the donation.
Reciprocity in Transfer Taxes
- Exemption for intangible personal properties of non-resident aliens, provided their home country reciprocates for Filipino residents.
Classifying Donations
- Inter-vivos: Transfers occurring during the lifetime of the transferor.
- Mortis Causa: Transfers occurring upon the transferor's death.
Exceptional Rules on Transfer
- Certain transfers, such as those in contemplation of death or intended to take effect at death, have specific tax rules.
Incomplete Transfers
- Involve actual delivery without immediate ownership transfer, subject to future conditions.
- Examples include conditional, revocable transfers, and those with reservation of title until death.
Complex Incomplete Transfers
- Occur for less than adequate consideration and are subject to transfer tax if certain conditions are met regarding valuation and consideration during the transfer.
Valuation of Transfers
- Mortis Causa: Based on fair value at death minus consideration.
- Inter-vivos: Fair value at completion of transfer minus consideration.
Non-Taxable Transfers and Void Transfers
- Void transfers are not subject to tax and include those prohibited by law or failing legal validity requirements.
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