Tax Presentation

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TAX

PRESENTATION

FUNDAMENTAL
CONCEPTS
of
ESTATE TAX
&
SUCCESSION

Banzuelo, Ann Lorraine N.


Lim, Julia Larisa
GRATUITOUS TRANSFER

DEATH GIFT/DONATION

DONORS
ESTATE TAX
TAX
ESTATE TAX DONORS TAX
Impose on privilege to Impose on privilege to
transmit property upon death transmit property during
Rate of tax is higher lifetime
Allowed to extend filling and Rate of tax is lower
paying No extension for filling and
Exemption per tax is paying
P200,000 Exemption per tax is
P100,000
THEORIES JUSTIFYING THE IMPOSITION OF
ESTATE TAX

BENEFIT RECEIVED
REDISTRIBUTION OF
THEORY
WEALTH THEORY
PRIVILEGE THEORY
The state renders services
Results in equitable
in the distribution of the State partnership theory
distribution of wealth
decedents estate Collects the share in the
accumulation of profit
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 Property Transfer
BASIC CONCEPT OF
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.
ELEMENT OF SUCCESSION

DECEDENT HEIR ESTATE


The person whose The person called to
Refers to all property,
property is the succession either rights and obligation of
transmitted through by the provision of a a person which are not
succession, whether or will or by operation of extinguished by his
not he left a will. law. death
EXAMPLE

DECEDENT ESTATE

Rosario died leaving a five hectare coconut land


to his son, Honesto

HEIR
KINDS OF SUCCESSION

TESTAMENTARY
Made in 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 partly by law.
KINDS OF SUCCESSOR

LEGATEE DEVISEE

An heir to a particular An heir to a particular REAL


PERSONAL property given by property given by virtue of will
virtue of will
CLASSIFICATION OF SUCCESSORS

PRIMARY COMPULSORY HEIR SECONDARY COMPULSORY HEIR


1. Legitimate children and their 1. Legitimate parents and legitimate
legitimate descendants ascendants
2. Legitimate surviving spouse 2. Illegitimate parents
3. Illegitimate children and their
descendants (legitimate and
illegitimate)
PERSONS AUTHORIZE TO MANAGE
ESTATE

EXECUTER ADMINISTRATOR

person appointed by a testator person appointed by the


to carry out the directions and COURT to administer his
requests of his WILL and the property
disposal of his property
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.
DISQUALIFIED TO MAKE AND WITNESS A WILL
NOT ALLOWED TO MAKE A WILL:

 Below 18 years old


 Incapacitated
 Two or more person who make a
will jointly
NOT ALLOWED TO WITNESS A
WILL:

 Any person not domiciled in the


Philippines
 Those convicted of falsification of a
document, perjury or false
testimony
HOLOGRAPHIC WILL
A will that is kept secret

Must be:
 Written, dated and signed by the hand of the testator
 May be made outside or inside the Philippines
 Need not to be witnessed
 Not subject to formalities

CODOCIL
A supplement or addition to the will

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