Legalese 2009 (Week 31)


estate tax – tax on the right to transmit property at death and on certain transfers by the decedent during his lifetime which are made by law the equivalent of testamentary dispositions (1 National Internal Revenue Code Annotated, p. 577 [2003]).


There shall be levied, assessed, collected, and paid upon the transfer of the net estate as determined in accordance with Sections 85 and 86, of every decedent, whether resident or nonresident of the Philippines, a tax based on the value of such net estate. . . (Tax Code, sec. 84).


Taxes upon the gratuitous dispositions of private property are known as transfer taxes. Under the Tax Code, these are the estate tax and the donor’s tax.


X, the decedent, is a US citizen not residing in the Philippines.  He left properties in the US and in the Philippines.  Are those properties included in his estate and therefore subject to estate tax?