Professional Documents
Culture Documents
by Flor G. Tarriela
July 16, 2014 (updated)
Ecclesiates 3:1-2 There is a time for everything and a season for every activity under
heaven. A time to be born and a time to die, a time to plant and a time to uproar.
PNB Trust under Atty. Joji Jolejole recently sponsored an Estate Planning Seminar with Atty.
Serafin Salvador as main speaker. So what is estate planning? Estate planning is the
process of arranging for the distribution of the owners estate according to his personal
wishes and requirements. Estate planning is for everyone who wishes to make certain that
their families and loved ones are provided for adequately.
Estate tax is a tax on the privilege of the deceased to transmit property based on his gross
estate or the market value of his properties at the time of death. What are included in the
gross estate? All the properties owned by the estate owner at the time of death such as real
property, bank accounts, stocks and other securities, personal property such as car, jewelry,
works of art, life insurance proceeds and retirement benefits based on fair market value
Are there any deductions allowed to determine the taxable net estate? Yes, some of the
deductions allowed are:
1.Standard deduction R1,000,000.00 without need of documentation;
2. Actual funeral expenses equal to 5% of the gross estate but not to exceed R200,000.00
(mourning apparel, food and drinks, cost of burial plot, interment or cremation fees and
charges, etc.)
3. Judicial expenses of Testamentary or Intestate proceedings incurred in the inventory taking
of assets comprising the gross estate, attorneys fees, brokers fees, etc.;
4. Valid claims against the estate such as unpaid mortgage and taxes due from deceased.
5. Family home equal to R1,000,000.00, the excess shall be subject to estate tax;
6. Documented Medical expenses not to exceed R500,000.00, such as medicines, hospital
bills, doctors fees.
When should the estate tax be filed? Where the gross value of the estate exceeds
R20,000.00, a written notice of death to the Commissioner of Internal Revenue, the Estate
Tax Return must be filed within 6 months from death.
Atty. Jun Salvador mentioned some of the common estate planning tools available:
A. Donations made during lifetime
Gifts up to R100,000.00 on a year shall be tax free and in excess of which will be taxable.
It is important to know the following are not subject to any gift tax: