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    Lesson 7 Estate Tax

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    CASTRO, HANNAH CAMILLE E.
    The TRAIN law lowers personal income tax for most taxpayers and exempts those earning below P250,000 from paying income tax. It also restructures the estate tax, lowering rates to a single rate of 6% on the net estate value. Key deductions allowed under the new estate tax include a standard deduction of P5 million, claims against the estate, previously taxed properties, property donated to government, and the family home of up to P10 million. The estate tax return is due one year after death.

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    Lesson 7 Estate Tax

    Uploaded by

    CASTRO, HANNAH CAMILLE E.
    7 views23 pages
    The TRAIN law lowers personal income tax for most taxpayers and exempts those earning below P250,000 from paying income tax. It also restructures the estate tax, lowering rates to a single rate of 6% on the net estate value. Key deductions allowed under the new estate tax include a standard deduction of P5 million, claims against the estate, previously taxed properties, property donated to government, and the family home of up to P10 million. The estate tax return is due one year after death.

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    Lesson 7 Estate Tax (3)

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    The TRAIN law lowers personal income tax for most taxpayers and exempts those earning below P250,000 from paying income tax. It also restructures the estate tax, lowering rates to a single rate of 6% on the net estate value. Key deductions allowed under the new estate tax include a standard deduction of P5 million, claims against the estate, previously taxed properties, property donated to government, and the family home of up to P10 million. The estate tax return is due one year after death.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    7 views23 pages

    Lesson 7 Estate Tax

    Uploaded by

    CASTRO, HANNAH CAMILLE E.
    The TRAIN law lowers personal income tax for most taxpayers and exempts those earning below P250,000 from paying income tax. It also restructures the estate tax, lowering rates to a single rate of 6% on the net estate value. Key deductions allowed under the new estate tax include a standard deduction of P5 million, claims against the estate, previously taxed properties, property donated to government, and the family home of up to P10 million. The estate tax return is due one year after death.

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    © All Rights Reserved
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    Download as pptx, pdf, or txt
    of 23

    Overview

    • TRAIN will lower personal income tax (PIT) for all taxpayers
    except the richest.

    • Those with taxable income below P250,000 will be exempt


    from paying PIT, while the rest of taxpayers, except the
    richest, will see lower tax rates ranging from 15% to 25% by
    2020.
    COMPENSATION INCOME
    • It is defined as taxable income arising
    from an employer/employee relationship
    that includes the following:
    Salaries, wages, compensation,
    commissions,honoraria, bonuses
    exceeding P90,000.00 allowances for
    transportation, representation,
    entertainment and other similar items.
    PERSONAL TAX
    • Is direct tax levied on a person.
    • Tax paid on one's personal income as separate from the tax
    paid on the firm’s earnings.
    • In an incorporated firm , the owners(shareholders) pay taxes
    on both their income (salary or diVidend from the firm) firm’s
    income (profits).
    • In partnerships and sole ownership, the tax is paid only once
    on the firm’s profits.
    LESSON 6: ESTATE TAX
    ESTATE TAX
    ESTATE TAX
    • Is a tax on the right of the
    deceased person to transmit
    his/her estate to his/her lawful
    heirs and beneficiaries at the
    time of death and or certain
    transfers, which are made by
    law as equivalent to
    testamentary disposition. It is
    not a tax on property.
    • Instead of having a
    complicated tax schedule
    with different rates, TRAIN
    reduces and restructures
    the estate tax to a low and
    single tax rate of 6% based
    on the net value of the
    estate
    Estate Tax Rate under Train Law
    • Before the implementation • The estate tax train law makes the
    of the train law, the estate tax rate fixed regardless of the
    tax rate is progressive rates. type of the decedent.
    Progressive rate means that • New estate tax rate is six percent
    the tax rate is getting higher (6%) whether resident or non-
    resident of the Philippines based
    as the taxable estate is on the net estate of the decedent.
    increasing.
    What is Included in the Estate Tax Train
    Law?

    • The gross estate of the decedent shall compose of


    all properties and interests or fruits acquired
    before or within the death of the decedent. It
    includes revocable transfers and transfers for
    insufficient considerations.
    • However, if a decedent is a non-resident alien the gross estate is
    composed of properties located within the Philippines.

    • The intangible properties of the non-resident alien will be


    subjected to rule of reciprocity. Any amounts withdrawn from the
    bank accounts or deposits that were subjected to a 6% final
    withholding tax will be excluded from the gross estate.
    What is the Valuation of Estate Tax Train
    Law?

    General rule: Every property of the decedent


    is valued according to their fair market value
    at the time of his death.
    Real Property

    • Any real property is to be valued


    at the fair market value as
    determined by the
    Commissioner or the fair market
    value (appraise value) by an
    assessor whichever is higher.
    Shares of Stocks
    • The market value of the stocks will depend on
    whether listed or non-listed in the stock
    exchanges. If the stocks are listed, the fair
    market value is equal to the mean between the
    highest and lowest value at the date of death,
    unless otherwise market value at the date of
    his death.
    What are the Allowed Deductions Estate
    Tax Train Law?

    Standard Deductions
    • Under this TRAIN Law, the decedent can claim a standard
    deduction of 5,000,000.00 without any requirements
    and requisites. This amount is allowed as a deduction for
    the benefit of the decedent. This deduction is part of the
    special deductions.
    Claims Against the Estate

    • These are the debts or • All unpaid obligations or


    obligations of the debts can be claimed as
    decedent still unpaid at a deduction from the
    the time of his death. The gross estate provided
    nature of the obligations that the following
    must be enforceable documents or
    against the estate of the requirements are
    decedent . complied
    Property Previously Taxed

    • Any properties received by the decedent either by donation of two


    living parties (inter vivos) or transfer of properties by a decedent
    (Mortis causa) within five years (5 years) prior to his death. These
    deductions shall be allowed only if the donor’s tax or the estate tax
    was paid.
    Properties Transferred for Public Use
    (TPU) or Donated to Government
    All properties transferred for the use of the Government of
    the Republic of the Philippines or any political subdivision for
    public purposes only will be allowed as deductions from a
    gross estate of the decedent.
    Family Home
    • The family home is a
    dwelling place where the
    husband, wife, and
    members of the family
    reside. The family home
    includes the land on which it
    is situated.
    • Certified by the Barangay
    Captain of the locality as an
    actual residential home of the
    • The decedent can deduct decedent.
    Ten Million Pesos Only • The fair market value must be
    (10,000,000.00) from his gross part of the gross estate of the
    estate and the excess shall be decedent.
    subject to estate tax. This • The allowed deduction must be
    deducted is allowed provided the the fair market value at the time
    following conditions are met: of his death but not exceeding
    the allowed amount of
    10,000,000.00 whether exclusive
    or conjugal properties.
    Amounts Received by Heirs under R.A. no.
    4917
    • These are the amounts received • ½ Share of the Surviving Spouse
    by the heirs due to the death of • The surviving spouse is entitled
    the decedent under R.A. 4917. by the law the ½ share from the
    The amount received by the conjugal or community
    heirs can be claimed as a properties of the decedent. This
    deduction if it was previously net share of the surviving spouse
    included as part of the gross will be excluded from the gross
    estate of the decedent. estate to ensure that only the
    decedent’s share will be taxed.
    When and how to File Estate Tax Train Law?

    • The estate tax shall be filed within


    one (1) year from the death of the
    decedent. The Commissioner or
    any Revenue Officer may extend of
    time to file an estate tax return in a
    meritorious case, a reasonable
    extension, not exceeding thirty (30)
    days, for filing the return. Estate tax
    return shall be paid at the time the
    return is filed by the executor,
    administrator or the heirs.

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