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Estate Tax Deductions and Rates Guide

Net estate is calculated as gross estate minus allowable deductions. Deductions include expenses like funeral costs, debts, taxes, medical bills from the last year of life, and the family home up to 1 million pesos. Other deductions include transfers to the government, 1 million standard deduction, and the surviving spouse's share of conjugal property. Estate tax rates range from exempt up to 20% depending on the net estate value and date of death. Rates were lower between 1992-1997 ranging from 0% to 35%.

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235 views3 pages

Estate Tax Deductions and Rates Guide

Net estate is calculated as gross estate minus allowable deductions. Deductions include expenses like funeral costs, debts, taxes, medical bills from the last year of life, and the family home up to 1 million pesos. Other deductions include transfers to the government, 1 million standard deduction, and the surviving spouse's share of conjugal property. Estate tax rates range from exempt up to 20% depending on the net estate value and date of death. Rates were lower between 1992-1997 ranging from 0% to 35%.

Uploaded by

Jm Eje
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Net Estate = Gross Estate Deductions

Deductions
Expenses, Losses, Indebtedness, and Taxes (ELIT)
a. Funeral expenses Lowest among:
Actual funeral expenses;
5% of the gross estate; and
P200,000.00.
b. Judicial expenses of the testamentary and intestate proceedings
c. Claims against the estate
At the time the indebtedness was incurred, the instrument was duly
notarized; and
If the loan was contracted within three (3) years before the death of the
decedent, the administrator or executor shall submit a statement showing the
disposition of the proceeds of the loan
d. Claims of the deceased against insolvent persons
e. Unpaid mortgages, etc.
Property Previously Taxed (Vanishing deduction)
Transfers for Public Use
The amount of all bequests, legacies, devises or transfers to or for the use of
the Government of the Republic of the Philippines, or any political
subdivision thereof, for exclusively public purposes.
f. Family Home
Fair Market Value of the Family Home or P1 million, whichever is lower.
As a condition for the exemption or deduction, said family home must have
been the decedents family home as certified by the barangay captain of the
locality.
g. Standard Deduction P1 million (no substantiation needed)
h. Medical Expenses
Medical expenses incurred by the decedent within one (1) year prior to his
death which shall be duly substantiated with receipts
Maximum: P500,000.00
i.Amount received by heirs under RA 4917 (retirement benefits of employees of
private firms)
j.Share in the Conjugal Property
Rates
The net share of the surviving spouse in the conjugal partnership property as
diminished by the obligations properly chargeable to such property
The estate tax rates depend on the date of death. For those who died on January 1,
1998 and onwards, the following are the estate tax rates based on the net estate:
Over But not over The tax shall
be
Plus Of the excess
over
0 200,000 Exempt
200,000 500,000 0 5% 200,000
500,000 2,000,000 15,000 8% 500,000
2,000,000 5,000,000 135,000 11% 2,000,000
5,000,000 10,000,000 465,000 15% 5,000,000
10,000,000 And Over 1,215,000 20% 10,000,000

If the decedent died between July 28, 1992 to December 31, 1997, the
following are the applicable estate tax rates based on the net estate amount:
Over But not Over
The Tax
Shall be
Plus
Of the Excess
Over

P 200,00.00

0%

P200,000.00 500,000.00

5% P 200,000.00
500,000.00 2,000,000.00 P 15,000.00 8% 500,000.00
2,000,000.00 5,000,000.00 135,000.00 12% 2,000,000.00
5,000,000.00 10,000,000.00 495,000.00 21% 5,000,000.00
10,000,000.00

1,545,000.00 35% 10,000,000.00

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