REVIEWER ON TRANSFER AND BUSINESS TAXES Exemption 200,000 100,000

per table

CHAPTER 1
Transfer Tax
- A tax imposed upon the gratuitous
transfer of property ownership.
- A privilege tax imposed on the act of
passing ownership of property
- Not a tax on the property itself
Two Kinds of Transfer Tax
1. Estate Tax
2. Donor’s Tax
INTRODUCTION TO ESTATE TAX
Estate tax is imposed primarily for the
government to raise revenue for public purpose
or for the support of the government.
Theories for the imposition of ESTATE TAX:
1. Benefit – Received Theory
- The state renders services in the
distribution of the decedent’s estate
either by law or in accordance with his
will

ESTATE TAX 2. Privilege Theory (State Partnership

- An excise tax imposed upon the right of Theory)
transmitting property at the time of - Succession of property of the deceased
death and the privilege of controlling is not a fundamental right but a
the disposition of one’s property to take privilege granted by the estate. The
effect upon death state, who is the silent and passive
- Mortis causa donation partner can collect the share that is due
to it.
DONOR’S TAX
- A tax on the privilege of transmitting 3. Redistribution of Wealth Theory
one’s property to another during his - Imposition of estate tax will result to a
lifetime without adequate and full more equitable distribution of wealth in
valuable consideration the society
- Donation inter vivos
Computation of Estate Tax
Estate and Donor’s Tax distinguished 1. If the decedent was single at the time of
his death
ESTATE DONOR’s Gross Estate XX
Nature Tax imposed Tax imposed Less: Deductions
on the upon one’s Ordinary XX
privilege to privilege to Special XX XX
transmit transfer Taxable Net XX
property property Estate
upon one’s during X Applicable Rate X%
death lifetime in the Tax Table
Rates Higher than Lower than Estate Tax Due XX
DT ET
Extensions Allowed Provision
for filing and deleted
payments
 2. If the decedent was married at the time
of death
Conjugal / Exclusive Total
Community
Real Properties XX XX
Personal Properties XX XX
Gross Estate XX XX XX
Less: Deductions
Ordinary XX XX (XX)
Special (XX)
Net Estate XX
Less: Share of (XX)
Surviving Spouse in
the net
conjugal/community
property
Taxable Net Estate XX
X Tax Rate X%
Estate Tax Due XX

CHAPTER 2

Succession
- A mode of acquisition by virtue of which
the property, rights and obligations, to
the extent of the value of the
inheritance of a person are transmitted
through his death to another or others
by will or by operation of law.

Elements
1. Decedent
- The person whose property is
transmitted through succession,
whether or not he left a will
2. Heir
-