Take advantage of Estate Tax Amnesty ASAP!

I’m talking about this once again since I’ve been receiving some questions and inquiries about Estate Planning once again. An estate plan is simply a plan for the disposition of whatever an estate owner leaves behind, taking into consideration several factors such as the estate owner’s goal, estate taxes, proper distribution, & legal.

Estate planning is supposed to happen before death. So for those asking about a method to transfer properties to heirs, my answer is to avail of this limited-time Estate Tax Amnesty!

The Estate Tax Amnesty has passed into law under Republic Act 11213, signed by President Duterte last February 14, 2019. This is good news for individuals and families to settle estates of the long dead, and to transfer titles to properties which have never been passed on to the heirs at a much lower cost!

Coverage

The estate tax amnesty shall cover the estate of decedents who died on or before December 31, 2017, with or without assessments duly issued.

Rate and Basis

The estate tax amnesty tax rate is 6% of the decedent’s total net estate at the time of death (after deductions and after removing the conjugal/communal share of the spouse) and is taxed without any penalties, surcharge or interest. Or 6% of the decedent’s undeclared estate if an estate tax return was previously filed with the BIR.

If the allowable deductions applicable at the time of death exceed the value of the gross estate, a minimum estate amnesty tax of PHP5,000 shall be paid.

The availment of the estate tax amnesty shall be done for every stage of the transfer of the property. This means that if the property is registered in the name of decedent(s) prior to the last decedent or the so-called multiple estates, the 6% tax shall be imposed on the net estate of every decedent. In other words, a one-time settlement across multiple estates is not allowed.

Period of Availment and Filing

Taxpayers can avail of the estate tax amnesty, within two (2) years from the effectivity of the implementing rules and regulations (IRR), by filing an Estate Tax Amnesty Tax Return and paying the tax in the BIR Revenue District Office (RDO) which has jurisdiction over the last residence of the decedent.

Effectivity

The Tax Amnesty Act shall take effect fifteen (15) days after its complete publication in the Official Gazette [February 18, 2019] or in at least one (1) newspaper of general circulation.

Those who availed of the estate tax amnesty and have fully complied with the conditions will be granted certain immunities and privileges under the law.

Quick Frequently Asked Questions

(1) Is this applicable for a property with no title yet but only holds tax declaration?

For those who have a tax declaration only, you can prove that you are the heirs and have it titled under the heirs' name.

(2) A family member died and the property is under the spouse’s name (me), do I need to report it? Is this covered?

If part of the community property, then you have to settle the share of your spouse and is covered by the estate tax amnesty.

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I am not an attorney and the information shared here is for general purposes only and shall not be construed as tax, legal, or financial advice from a qualified perspective. If you need such advice, please contact a qualified attorney or tax professional.

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