Republic of the Philippines
Laguna State Polytechnic University Santa Cruz Campus
Province of Laguna
REVIEWER ON TRANSFER AND BUSINESS TAXATION
Reviewer by: Harlene A. Cambel
Book by: Enrico D. Tabag, CPA, MBA & Earl Jimson R. Garcia, CPA, MBA
CHAPTER 1: SUCCESSION AND TRANSFER
TAXES
and not on the value of the property
Under Art.712 (New Civil code): or right
“Ownership is acquired by
occupation and y intellectual creation.
Ownership and other real rights over KINDS OF SUCCESSION
property are acquired and transmitted by the 1. Testamentary or testate succession –
law, by donation, by testate and intestate made in a Will
succession, and in consequence of certain 2. Legal or intestate succession –
contracts, by tradition. They may also be decedent did not execute a will of if
acquired by means of prescription”. will and partly by operation of law
3. Mixed Succession – partly by “will”
Transfer Defined and partly by operation of law.
Transfer taxes are taxes imposed
upon the gratuitous disposition of private CAUSES OF LEGAL SUCCESSION OR
properties or rights. INTESTACY
Types of Transfer Taxes 1. If a person dies without a will, or with
1. Estate tax a void will, or one which has
2. Donor’s tax subsequently lost its validity
2. When the “Will” does not institute an
Succession Defined heir
Succession is a mode of acquisition 3. Partial institution of heir.
by virtue of which, the property, rights, and Consequently, intestacy takes place
obligations are transmitted through his as to the undisposed portion- Mixed
death. succession exists
4. When the heir instituted is incapable
Nature of Transfer Taxes of succeeding
Transfer tax is an excise tax. 5. Other causes such as:
Taxes imposed upon gratuitous a. Nonfulfillment of the
disposition of private properties or suspensive condition
rights attached to the institution of
privilege tax imposed on the act of heir
passing the ownership of property
, b. Preterition or omission in the compulsory
testator’s will of one, some or heirs
all of the compulsory heirs Secondary –
c. Fulfillment of “resolutory those who
condition”. Refers to a succeed only
condition upon fulfillment in the absence
terminates an already of the primary
enforceable obligation compulsory
d. Expiration of term or period of heirs
institution Concurring –
e. Non-compliance or who succeed
impossibility of compliance together with
with the will primary or
f. Repudiation of the instituted secondary
heir compulsory
heirs
ELEMENTS OF SUCCESSION Voluntary Heirs – instituted
Decedent – person whose property by testator in his will to
is transmitted through succession, succeed to the inheritance of
whether or not he left a will. Executor the portion which the testator
is a person designated in the last will can freely dispose
and testament to carry out the Legal or Intestate Heirs –
provisions of the decedents will. those who succeed to the
Administrator is a person appointed estate of the decedent by
by the court and performs the same operation of law
duty
Inheritance (Estate) COMPOSITION OF GROSS ESTATE
Successors – person who is called A. Legitime – to be inherited by
to the succession either the provision Compulsory heir; part of testator’s
of a will or by operation of law property which he cannot dispose of
(Art.782 NCC) because of law has reserved it for
Compulsory Heirs – those certain heirs
who succeed by force of law B. Free Portion – to be inherited by
to some portion of the Compulsory heir/ Voluntary heir;
inheritance portion of the estate which the
o Kinds of Compulsory testator can freely dispose of
Heir
Primary – Collateral Relatives
those who a) Consanguinity – persons descending
have from the same stock or common
precedence ancestors; blood relatives
over and b) Lineal Consanguinity – subsists
exclude other between persons of whom one is
Laguna State Polytechnic University Santa Cruz Campus
Province of Laguna
REVIEWER ON TRANSFER AND BUSINESS TAXATION
Reviewer by: Harlene A. Cambel
Book by: Enrico D. Tabag, CPA, MBA & Earl Jimson R. Garcia, CPA, MBA
CHAPTER 1: SUCCESSION AND TRANSFER
TAXES
and not on the value of the property
Under Art.712 (New Civil code): or right
“Ownership is acquired by
occupation and y intellectual creation.
Ownership and other real rights over KINDS OF SUCCESSION
property are acquired and transmitted by the 1. Testamentary or testate succession –
law, by donation, by testate and intestate made in a Will
succession, and in consequence of certain 2. Legal or intestate succession –
contracts, by tradition. They may also be decedent did not execute a will of if
acquired by means of prescription”. will and partly by operation of law
3. Mixed Succession – partly by “will”
Transfer Defined and partly by operation of law.
Transfer taxes are taxes imposed
upon the gratuitous disposition of private CAUSES OF LEGAL SUCCESSION OR
properties or rights. INTESTACY
Types of Transfer Taxes 1. If a person dies without a will, or with
1. Estate tax a void will, or one which has
2. Donor’s tax subsequently lost its validity
2. When the “Will” does not institute an
Succession Defined heir
Succession is a mode of acquisition 3. Partial institution of heir.
by virtue of which, the property, rights, and Consequently, intestacy takes place
obligations are transmitted through his as to the undisposed portion- Mixed
death. succession exists
4. When the heir instituted is incapable
Nature of Transfer Taxes of succeeding
Transfer tax is an excise tax. 5. Other causes such as:
Taxes imposed upon gratuitous a. Nonfulfillment of the
disposition of private properties or suspensive condition
rights attached to the institution of
privilege tax imposed on the act of heir
passing the ownership of property
, b. Preterition or omission in the compulsory
testator’s will of one, some or heirs
all of the compulsory heirs Secondary –
c. Fulfillment of “resolutory those who
condition”. Refers to a succeed only
condition upon fulfillment in the absence
terminates an already of the primary
enforceable obligation compulsory
d. Expiration of term or period of heirs
institution Concurring –
e. Non-compliance or who succeed
impossibility of compliance together with
with the will primary or
f. Repudiation of the instituted secondary
heir compulsory
heirs
ELEMENTS OF SUCCESSION Voluntary Heirs – instituted
Decedent – person whose property by testator in his will to
is transmitted through succession, succeed to the inheritance of
whether or not he left a will. Executor the portion which the testator
is a person designated in the last will can freely dispose
and testament to carry out the Legal or Intestate Heirs –
provisions of the decedents will. those who succeed to the
Administrator is a person appointed estate of the decedent by
by the court and performs the same operation of law
duty
Inheritance (Estate) COMPOSITION OF GROSS ESTATE
Successors – person who is called A. Legitime – to be inherited by
to the succession either the provision Compulsory heir; part of testator’s
of a will or by operation of law property which he cannot dispose of
(Art.782 NCC) because of law has reserved it for
Compulsory Heirs – those certain heirs
who succeed by force of law B. Free Portion – to be inherited by
to some portion of the Compulsory heir/ Voluntary heir;
inheritance portion of the estate which the
o Kinds of Compulsory testator can freely dispose of
Heir
Primary – Collateral Relatives
those who a) Consanguinity – persons descending
have from the same stock or common
precedence ancestors; blood relatives
over and b) Lineal Consanguinity – subsists
exclude other between persons of whom one is
