The document discusses transfer taxes and estate taxes. It defines a transfer tax and differentiates an estate tax from a donor's tax. It notes some key differences between estate and donor's taxes, including higher rates and exemptions for estate taxes. The document also covers succession, wills, kinds of succession, successors, persons authorized to manage estates, requirements for making a will, and holographic wills.
The document discusses transfer taxes and estate taxes. It defines a transfer tax and differentiates an estate tax from a donor's tax. It notes some key differences between estate and donor's taxes, including higher rates and exemptions for estate taxes. The document also covers succession, wills, kinds of succession, successors, persons authorized to manage estates, requirements for making a will, and holographic wills.
The document discusses transfer taxes and estate taxes. It defines a transfer tax and differentiates an estate tax from a donor's tax. It notes some key differences between estate and donor's taxes, including higher rates and exemptions for estate taxes. The document also covers succession, wills, kinds of succession, successors, persons authorized to manage estates, requirements for making a will, and holographic wills.
The document discusses transfer taxes and estate taxes. It defines a transfer tax and differentiates an estate tax from a donor's tax. It notes some key differences between estate and donor's taxes, including higher rates and exemptions for estate taxes. The document also covers succession, wills, kinds of succession, successors, persons authorized to manage estates, requirements for making a will, and holographic wills.
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Taxation 2 │
INTRODUCTION TRANSFER TAXES and ESTATE TAX Learning objectives 1. Define a transfer tax 2. Differentiate an estate tax to a donor’s tax 3. Discuss the nature and concept of succession
9/3/2019 2 Transfer of Property
Onerous Transfer
9/3/2019 3 Transfer of Property
Gratuitous Transfer
9/3/2019 4 Transfer of Property
Onerous Transfer Normal Course of Casual Transfer business
Vat or Percentage Capital and Excise Gain Tax Tax
9/3/2019 5 Transfer of Property
Gratuitous Transfer Death Gift/ Donation
Donor’s Estate Tax Tax
9/3/2019 6 Difference of Estate and Donor’s Tax Estate Donor’s Tax Tax
o Impose on privilege to o Impose on privilege to
transmit property transmit property during upon death lifetime o rate of tax is HIGHER o rate of tax is LOWER o Allowed to extend o No extension for filing filing and paying and paying o Exemption per tax is o Exemption per tax is P200,000 P100,000
9/3/2019 7 Introduction to Estate Tax
ESTATE TAX Theories Justifying the Imposition of Estate Tax Benefit Received theory o the state renders services in the distribution of the decedent’s estate Privilege theory o State Partnership theory o Collects the share in the accumulation of profit Redistribution of Wealth Theory o Results in equitable distribution of wealth
9/3/2019 8 Introduction to Estate Tax ESTATE TAX ▪ Tax on the RIGHT of the deceased person to transmit his ESTATE to his lawful heirs and beneficiaries at the TIME OF DEATH ▪ Levied on Net Estate ▪ Not on the Property Transferred
9/3/2019 9 Taxation 2 │ INTRODUCTION TRANSFER TAXES and ESTATE TAX
FLABERT VILLASENCIO, CPA
Notre Dame of Dadiangas University Succession and Will SUCCESSION- a mode of acquisition by virtue of which the property, rights and obligation to the extent of the value of the inheritance, of a person are transmitted through his death to another or others either by will or by operation of law.
WILL- an act whereby a person is permitted with
the formalities prescribed by law, to control to a certain degree the disposition of his estate, to take effect after his death.
9/3/2019 11 Element of Succession Decedent- the person whose property is transmitted through succession, whether or not he left a will. Heir- The person called to the succession either by the provision of a will or by operation of law. Estate- Refers to all the property, rights and obligations of a person which are not extinguished by his death.
9/3/2019 12 Element of Succession Illustration: Rosario died leaving a five hectare coconut land to his son, Honesto.
Identify the elements of succession.
9/3/2019 13 Element of Succession DECEDENT (Rosario)
ESTATE (Land)
HEIR (Honesto) 9/3/2019 14 Kinds of Succession Testamentary- made in a will executed in the form prescribed by law. Intestate- no will or if there is, the same is void or nobody will succeed. Mixed- Partly by will and partly by law. 9/3/2019 15 Kinds of Successors Legatee- An heir to a particular personal property given by virtue of a will. Devisee- An heir to a particular real property given by virtue of a will.
9/3/2019 16 Classification of Successors PRIMARY SECONDARY COMPULSORY COMPULSORY HEIRS HEIRS 1. Legitimate children 4. Legitimate parents and their legitimate and legitimate descendants ascendants. (In default of No.1) 2. Surviving spouse (legitimate) 3. Illegitimate children 5. Illegitimate parents and their descendants (No other ascendants, (legit. and illegit.) in default of 2 and 3)
9/3/2019 17 Persons Authorized to Manage Estate 1. Executor- person appointed by a testator to carry out the directions and requests of his will and the disposal of his property. 2. Administrator- person appointed by the court to administer his property. 9/3/2019 18 Summary Diagram SUCCESSION
Testamentary Mixed Intestate
Legatee Devisee
Executor Administrator
19 Will Definition: An act whereby a person is permitted with the formalities prescribed by law, to control to a certain degree the disposition of his estate, to take effect after his death.
9/3/2019 20 Disqualify to Make and Witness to a Will Not Allowed to Make a Will o Below 18 years old o Incapacitated o Two or more persons who make a will jointly Not Allowed to Witness to a Will o Any person not domiciled in the Philippines o Those convicted of falsification of a document, perjury or false testimony
9/3/2019 21 Holographic Will ▪ A will that is kept secret ▪ Must be: o Written, dated and signed by the hand of the testator o Maybe made inside or outside the Philippines o Need not to be witnessed o Not subject to formalities
