JPIA-HAU
Estate Tax Model
BUSINESS TAXATION
Estate Taxation and Donor’s Taxation Gross Estate xxx
Allowable Deductions (xxx)
Overview of the Handouts: Net Estate xxx
1. Estate Taxation – theories; valuation;
Multiply by: 6%
property regime; allowable deductions
2. Donor’s Taxation – theories; exempt gift; Estate Tax xxx
valuation rules Gross Estate – consists of all properties of the
decedent, tangible or intangible, real or
personal, and wherever situated at the point of
ESTATE TAXATION death.
- pertains to the taxation of the gratuitous transfer
of properties of the decedent to the heirs upon the Tangibles/Properties physically present
decedent’s death. a. Not owned
1. Merger of usufruct in the owner of the
Inter vivos – donation/gift – Donor’s tax naked title
Mortis causa – iheritance – Estate Tax 2. Transmission or delivery by the
fiduciary
Succession – gratuitous transmission of property 3. Transmission from the first heir, legatee
from a deceased person in favour of his or done in form of another beneficiary
successors. (Special Power of Appointment)
4. Proceeds of irrevocable life insurance
Types of Succession payable to beneficiary
a. Testate or Testamentary Succession - 5. Properties held in trust
with will 6. Exclusive/separate properties of
b. Intestate or Legal Succession - by the surviving spouse
operation of law; without will 7. Bona fide sales
c. Mixed Succession - partly by a virtue of a b. Exempt
will, partly by operation of law 1. Proceeds of insurance by company
employees
Elements of Succession 2. Benefits from GSIS
a. Decedent - person whose property is 3. Accruals from SSS
transmitted through succession. If left a will, 4. USVA benefits
he is called as testator 5. War damage payments
b. Estate - property, rights, and obligations of 6. Donation to accredited non-profit
the decedent not extinguished by his death, institutions, admin expenses not
also called as inheritance exceeding 30%
c. Heirs - person to whom the estate is 7. Transfers exempted by law
transferred, by a will or by operation of law. 8. Bank deposits withdrawn from decedent
account
Will – an act whereby a person is permitted to
control to a certain degree the disposition of his Intangibles/Properties not physically present
estate, which will take effect after his death. 1. Transfer in contemplation of death
2. Revocable transfer
Types of Will 3. Conditional transfer
a. Holographic Will - signed by the testator 4. Transfer with retention of certain rights
himself 5. Transfer under General Power of
b. Notarial Will - signed by the decedent and Appointment
the witnesses 6. Claims against insolvent person
c. Codicil - supplement or addition to a will
Valuation of Gross Estate
Legitime - part of the testator’s property which he a. Real Property - Zonal Value or Assessed
cannot dispose of because the law has reserved it Value, whichever is higher
for certain heirs. b. Shares of Stock
- Preferred Shares: par value
Types of Heirs - Ordinary Shares
a. Compulsory If listed: arithmetic mean of highest and
1. Legitimate children and their direct lowest price at the time of death
descendants If unlisted: adjusted net asset method
2. Illegitimate children and Surviving spouse
3. Legitimate/Illegitimate Parents and their c. Usufruct and Annuities
direct ascendants Value of annuity: (1 − (1 + 𝑖)−𝑛 )x Annuity
b. Secondary
Estate Tax Model
BUSINESS TAXATION
Estate Taxation and Donor’s Taxation Gross Estate xxx
Allowable Deductions (xxx)
Overview of the Handouts: Net Estate xxx
1. Estate Taxation – theories; valuation;
Multiply by: 6%
property regime; allowable deductions
2. Donor’s Taxation – theories; exempt gift; Estate Tax xxx
valuation rules Gross Estate – consists of all properties of the
decedent, tangible or intangible, real or
personal, and wherever situated at the point of
ESTATE TAXATION death.
- pertains to the taxation of the gratuitous transfer
of properties of the decedent to the heirs upon the Tangibles/Properties physically present
decedent’s death. a. Not owned
1. Merger of usufruct in the owner of the
Inter vivos – donation/gift – Donor’s tax naked title
Mortis causa – iheritance – Estate Tax 2. Transmission or delivery by the
fiduciary
Succession – gratuitous transmission of property 3. Transmission from the first heir, legatee
from a deceased person in favour of his or done in form of another beneficiary
successors. (Special Power of Appointment)
4. Proceeds of irrevocable life insurance
Types of Succession payable to beneficiary
a. Testate or Testamentary Succession - 5. Properties held in trust
with will 6. Exclusive/separate properties of
b. Intestate or Legal Succession - by the surviving spouse
operation of law; without will 7. Bona fide sales
c. Mixed Succession - partly by a virtue of a b. Exempt
will, partly by operation of law 1. Proceeds of insurance by company
employees
Elements of Succession 2. Benefits from GSIS
a. Decedent - person whose property is 3. Accruals from SSS
transmitted through succession. If left a will, 4. USVA benefits
he is called as testator 5. War damage payments
b. Estate - property, rights, and obligations of 6. Donation to accredited non-profit
the decedent not extinguished by his death, institutions, admin expenses not
also called as inheritance exceeding 30%
c. Heirs - person to whom the estate is 7. Transfers exempted by law
transferred, by a will or by operation of law. 8. Bank deposits withdrawn from decedent
account
Will – an act whereby a person is permitted to
control to a certain degree the disposition of his Intangibles/Properties not physically present
estate, which will take effect after his death. 1. Transfer in contemplation of death
2. Revocable transfer
Types of Will 3. Conditional transfer
a. Holographic Will - signed by the testator 4. Transfer with retention of certain rights
himself 5. Transfer under General Power of
b. Notarial Will - signed by the decedent and Appointment
the witnesses 6. Claims against insolvent person
c. Codicil - supplement or addition to a will
Valuation of Gross Estate
Legitime - part of the testator’s property which he a. Real Property - Zonal Value or Assessed
cannot dispose of because the law has reserved it Value, whichever is higher
for certain heirs. b. Shares of Stock
- Preferred Shares: par value
Types of Heirs - Ordinary Shares
a. Compulsory If listed: arithmetic mean of highest and
1. Legitimate children and their direct lowest price at the time of death
descendants If unlisted: adjusted net asset method
2. Illegitimate children and Surviving spouse
3. Legitimate/Illegitimate Parents and their c. Usufruct and Annuities
direct ascendants Value of annuity: (1 − (1 + 𝑖)−𝑛 )x Annuity
b. Secondary
