What are the Tax Rates for Estate Tax?

Effective January 1, 1998 up to Present

If the Net Estate is

Over	But not Over	The Tax Shall be	Plus	Of the Excess Over
	P 200,000.00	Exempt
P 200,000.00	500,000.00	0	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	11 %	2,000,000.00
5,000,000.00	10,000,000.00	465,000.00	15 %	5,000,000.00
10,000,000.00		1,215,000.00	20 %	10,000,000.00

Effective July 28, 1992 up to December 31, 1997 (Section 77 of the NIRC, as amended (Republic Act No. 7499)

If the Net Estate is

Over	But not Over	The Tax Shall be	Plus	Of the Excess Over
	P 200,000.00	Exempt
P 200,000.00	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

Effective January 1, 1973 to July 27, 1992 (Section 85 of the NIRC, as amended (Presidential Decree No. 69)

If the Net Estate is

Over	But not Over	The Tax Shall be	Plus	Of the Excess Over
	P 10,000.00	Exempt	-	-
P 10,000.00	50,000.00	3%	-	P 10,000.00
50,000.00	75,000.00	P 1,200.00	4 %	50,000.00
75,000.00	100,000.00	2,200.00	5 %	75,000.00
100,000.00	150,000.00	3,450.00	10%	100,000.00
150,000.00	200,000.00	8,450.00	15 %	150,000.00
200,000.00	300,000.00	15,950.00	20%	200,000.00
300,000.00	400,000.00	35,950.00	25%	300,000.00
400,000.00	500,000.00	60,950.00	30%	400,000.00
500,000.00	625,000.00	90,950.00	35%	500,000.00
625,000.00	750,000.00	134,700.00	40%	625,000.00
750,000.00	875,000.00	184,700.00	45%	750,000.00
875,000.00	1,000,000.00	240,950.00	50%	875,000.00
1,000,000.00	2,000,000.00	303,450.00	53%	1,000,000.00
2,000,000.00	3,000,000.00	833,450.00	56%	2,000,000.00
3,000,000.00	-	1,393,450.00	60%	3,000,000.00

Effective September 15, 1950 to December 31, 1972 (Section 85 of the NIRC, as amended (Republic Act No. 579)

Estate and Inheritance Tax

If the Net Estate is

Over	But not Over	ESTATE	INHERITANCE
0	5,000.00	Exempt	Exempt
5,000.00	12,000.00	1.0%	2%
12,000.00	30,000.00	2.0%	4%
30,000.00	50,000.00	2.5%	6%
50,000.00	70,000.00	3.0%	8%
70,000.00	100,000.00	5.0%	12%
100,000.00	150,000.00	7.0%	14%
150,000.00	250,000.00	9.0%	16%
250,000.00	500,000.00	11.0%	18%
500,000.00	1,000,000.00	13%	20%
1,000,000.00		15%	22%

Effective July 1, 1939 to September 14, 1950 (Section 85 of the NIRC, as amended (Commonwealth Act No. 466)

Estate and Inheritance Tax

If the Net Estate is

Over	But not Over	ESTATE	INHERITANCE
0	3000.00	Exempt	1.0%
3,000.00	10,000.00	1.0%
10,000.00	30,000.00	1.5%	2.0%
30,000.00	50,000.00	2.0%	3.0%
50,000.00	80,000.00	2.5%	4.0%
80,000.00	110,000.00	3.0%	5.0%
110,000.00	150,000.00	3.5%	6.0%
150,000.00	190,000.00	4.0%	7.0%
190,000.00	240,000.00	4.5%	8.0%
240,000.00	290,000.00	5.0%	9.0%
290,000.00	350,000.00	5.5%	10.0%
350,000.00	420,000.00	6.0%	11.0%
420,000.00	500,000.00	6.5%	12.0%
500,000.00	600,000.00	7.0%	13.0%
600,000.00	720,000.00	7.5%	14.0%
720,000.00	850,000.00	8.0%	15.0%
850,000.00	1,000,000.00	8.5%	16.0%
1,000,000.00	1,200,000.00	9.0%	17.0%
1,200,000.00	1,500,000.00	9.5%	17.0%
1,500,000.00		10.0%	17.0%

What are the Documentary Requirements for Payment of Estate Tax?

1. Notice of Death duly received by the BIR, if gross estate exceeds P20,000 for deaths occurring on or after Jan. 1, 1998; or if the gross estate exceeds P3,000 for deaths occurring prior to January 1, 1998

2. Certified true copy of the Death Certificate

3. Deed of Extra-Judicial Settlement of the Estate, IF the estate is settled extra judicially

4. Court Orders/Decision, IF the estate is settled judicially;

5. Affidavit of Self-Adjudication and Sworn Declaration of all properties of the Estate

6. A certified true copy of the schedule of partition of the estate and the order of the court approving the same, if applicable

7. For manually issued title (red title), a certified true copy of the Original Certificate of Title (OCT), Transfer Certificate of Title, or Condominium Certificate of Title (CCT) in case of a condo unit; 

For electronically issued title (blue title), a photocopy of the Original Certificate of Title, Transfer Certificate of Title, or Condominium Certificate of Title (CCT) in case of a condo unit

8. Certified true copy of the latest Tax Declaration of real properties at the time of death, if applicable

9. "Certificate of No Improvement" issued by the Assessor's Office declared properties have no declared improvement or Sworn Declaration/Affidavit of No Improvement by at least one (1) of the transferees

10. Certificate of Deposit/Investment/Indebtedness owned by the decedent and the surviving spouse, if applicable

11. Photo copy of Certificate of Registration of vehicles and other proofs showing the correct value of the same, if applicable

12. Photo copy of certificate of stocks, if applicable

13. Proof of valuation of shares of stocks at the time of death, if applicable

• For listed stocks - newspaper clippings or certification from the Stock Exchange
• For unlisted stocks - Audited Financial Statements duly certified by an independent certified public accountant with computation of fair market value per share at the time of death

14. Proof of valuation of other types of personal property, if applicable

15. Proof of claimed tax credit, if applicable

16. CPA Statement on the itemized assets of the decedent, itemized deductions from gross estate and the amount due if the gross value of the estate exceeds two million pesos, if applicable

17. Certification of Barangay Captain for claimed Family Home

18. Duly notarized Promissory Note for "Claims against the Estate" arising from Contract of Loan

19. Accounting of the proceeds of loan contracted within three (3) years prior to death of the decedent

20. Proof of the claimed "Property Previously Taxed"

21. Proof of claimed "Transfer for Public Use"

22. Copy of Tax Debit Memo used as payment, if applicable

23. Special Power of Attorney (SPA) from the transacting party IF the latter is not one of the parties to the Deed of Transfer

Additional requirements may be requested for presentation during audit of the tax case depending upon existing audit procedures.

Sample Form for Extrajudicial Settlement of Estate With Absolute Sale

                EXTRAJUDICIAL SETTLEMENT OF ESTATE WITH ABSOLUTE SALE 

KNOW ALL MEN BY THESE PRESENTS: 

 This AGREEMENT made end and entered into this _____ day of ________ 20__, in _______________________________________, by and between: 

 _____________, of legal age, Filipino, residing at _________________________________; 

 _____________, of legal age, married, residing at _________________________________;   _____________, of legal age, single, residing at _________________________________; and 

 _____________, of legal age, single, residing at _________________________________; 

WITNESSETH, that: 

           WHEREAS, we are the sole heirs of the deceased ___________________ who died on __________________, at _____________________________, copy of his death certificate is hereto attached as Annex A; 

           WHEREAS,  _______________________, died intestate, without Will or Testament, and without any outstanding debts in favor of any person or entity; 

          WHEREAS, ________________________ is the absolute and registered owner of two parcels of land located at __________________________ covered by Transfer Certificate of Title No.  ________ and _______, respectively, of the Registry of Deeds of _____________ and more particularly described as follows: 

                       [TECHNICAL DESCRIPTION OF THE PROPERTY] 

       WHEREAS, pursuant to Rule 74, Sec. 1 of the Revised Rules of Court of the Philippines, and being with full capacity to contract, we do hereby adjudicate unto ourselves the parcel of land described above, in equal shares. 

  FURTHER, FOR AND IN CONSIDERATION of the sum of _________________________ ( _______________ ), Philippine Currency, the receipt whereof is hereby acknowledged in full sum from ____________________________, both of legal age, Filipinos, and with residence address at _______________________, we do hereby SELL, TRANSFER, CONVEY and DELIVER, by way of ABSOLUTE SALE, unto said Spouses _____________________, their heirs assigns and successors in interest the property above described with all the improvements existing thereon; 

    That we hereby warrant our valid title to and peaceful possession of the property herein sold and conveyed and further declares that the same is free and clear of all liens and encumbrances of any kind whatsoever. 

      IN WITNESS WHEREOF, we hereunto set our hand on the _______ day of _________________, ______ at _____________________________________. 

                           The Heirs of __________________________ 

                                   ___________________________ 

___________________________   ___________________________ 

                                            ACCEPTED: 

___________________________      ___________________________ 

                                      SIGNED IN THE PRESENCE OF: 

___________________________   ___________________________ 

                                           ACKNOWLEDGEMENT 

Republic of the Philippines) City of ________________ ) S.S 

   BEFORE ME, a Notary Public in and for the City of _____________________, this ____ day of _______________, personally appeared ______________, ___________________, _________________, and _______________, who has satisfactory proven to me their identity through ________________ who is personally known to me and who personally knows the principal that they are the same person who executed and voluntarily signed the foregoing EXTRAJUDICIAL SETTLEMENT OF ESTATE WITH ABSOLUTE SALE which the acknowledged before me as their free and voluntary act and deed. 

     The foregoing instrument which relates to an Extrajudicial Settlement of Estate of two parcels of land consisting of ___ pages including the page on which this acknowledgement is written, has been signed on the left margin of each and every page by the parties and the witnesses. 

           WITNESS MY HAND AND SEAL, this ____ day of _______________, in the City of _______________________, Philippines. 

Doc. No. _______; 

Page No. _______; 

Book No. ______; 

Series of 20____.

What is extrajudicial settlement of estate?

An extrajudicial settlement is the settling of an estate via the drafting of a contract, which indicates how a deceased owner’s properties will be divided among the heirs as they see fit. The properties left by the deceased listed in the contract is collectively recognized as the “estate.”

The settlement is considered “extrajudicial,” or “out of court,” as the heirs do not go to trial to divide the properties left by the deceased property owner.

Source: http://www.lamudi.com.ph