Question & AnswerQ&A (Act No. 2601.)
The tax applies to all real property located in the Philippines and real rights therein, any franchise exercisable in the Philippines, shares or bonds issued by Philippine corporations, shares or rights in partnerships or businesses established in the Philippines, and personal property located in the Philippines.
For these beneficiaries, the rates are one percent on property not exceeding 50,000 pesos; 1.5% if the amount is over 50,000 but not more than 250,000 pesos; 2.5% if over 250,000 but not more than 500,000 pesos; and 4% on amounts exceeding 500,000 pesos.
The tax rate is the same as for direct descendants but doubled (an increase of 100%).
The tax rate fixed for direct descendants is increased by 200% for other relatives not included in the first two groups.
There shall be a 300% increase on the tax rate fixed for direct descendants if strangers are beneficiaries.
The portions of the inheritance received by the surviving spouse, legitimate child, recognized natural or adopted child are exempt from tax up to three thousand pesos each.
Deductions include funeral and burial expenses, the surviving spouse's proper capital and his/her share of gains (gananciales), proven debts, judicial expenses for testamentary or intestate proceedings, and claims against insolvent persons.
Executors or judicial administrators who distribute inheritance property without showing tax payment can be fined up to five thousand pesos, or imprisoned for up to six months, or both.
Tax must be paid within six months after the death of the predecessor unless judicial proceedings are instituted, in which case payment is made by the executor before delivering shares.
No. No document transferring real property or real rights by gift mortis causa, legacy, or inheritance shall be registered unless the tax payment is shown.
The donee, legatee, or heir may be fined between 25% to 100% of the concealed property's value, imprisoned up to one year, or both.
Each beneficiary's share is taxed according to the tax scale that corresponds to the class or group to which they belong, based on the value of the benefit received.
The government has the right to collect this tax on transmitted property with preference over any real right created after death, with the preference lasting up to five years for real property and three years for other property.
Yes, interested persons may use the remedies provided under Act No. 2339 within the prescribed periods and conditions.