TRANSFER TAX  Testator – if a decedent left a will.

 Executor – a person designated in the last will &

OBJECTS OF TAXATION testament to carry out the provisions of the
 Persons decedent’s will.
- Residence *responsible for distributing the properties according
- Personal tax / CTC to the will
*Personal Tax – toll tax, sedula, community tax  Administrator – a person appointed by the court
 Property and performs the same duty if executor refused
- Real/Personal Property to accept the appointment. (normally lawyers)
- Real Property Tax (tax on property itself, paid INHERITANCE (ESTATE)
by the owner)
 Others - All property, rights and obligations of a person
- Income – income tax (tax imposed to the which are not extinguished by death and all
income itself, not to the person) which have accrued thereto since the opening of
- Transactions – Business Transactions / succession. (subject to succession)
Business Tax (Value-Added Tax, OPT, and SUCCESSOR
Excise Tax)
- Privilege – transfer tax (donor’s tax, estate - A person who is called to the succession wither
tax) the provision of a will or by operation of law
*tax on privilege to transfer property. - Devisees and legatees are persons to whom
gifts of real and personal property are
TRANSFER TAX respectively given by virtue of a will.
- Taxes imposed upon the gratuitous disposition *receives the inheritance
of private properties or rights.
 COMPULSORY
*Gratuitous – transfer without asking for anything in - Those who succeed by force of law to some
exchange portion of the inheritance, in an amount
 Donations predetermined by law, known as the legitime.
- Donation inter vivos – DONOR’S TAX *cannot be deprived of their inheritance by law
*transferring property while you are still alive
- Donation mortis causa – ESTATE TAX *Legitime – percentage of property designated by
*transfer of property on the death of the law for the compulsory heirs (75%); only applies if
donor there is a will

*hindi pwedeng paghati-hatian ng mga  VOLUNTARY

tagapagmana ang estate hanggat hindi nagbabayad - Those instituted by the testator in his will to
ng estate tax succeed to the inheritance of the portion
thereof of which the testator can freely
SUCCESSION DEFINED dispose. (after distributing the legitime of
- A mode of acquisition by virtue of which the compulsory heirs; can also be a compulsory
Property, Rights and Obligations to the extent heir)
of the value of the inheritance, of a person are  LEGAL/INTESTATE
transmitted through his death to another or - Those who succeed to the estate of the
others either by his will or by operation of law. decedent by operation of law (heirs who will
- The rights to the succession are transmitted from inherit without a will, based on family
the moment of the death of the decedent. relations)

*Process of transferring assets from the deceased to COMPULSORY

their heirs.
 Primary
ELEMENTS OF SUCCESSION a. Legitimate children and their legitimate
descendants
1. Decedent b. Surviving spouse
2. Inheritance (Estate) c. Illegitimate children and their descendants,
3. Successor legitimate or illegitimate
a. Compulsory Heirs  Secondary
b. Voluntary Heirs d. Legitimate parents and legitimate
c. Legal or Intestate Heirs ascendants. (They inherit only in default of
DECEDENT “A”)
e. Illegitimate parents (no other descendants).
*Person who passed away; source of inheritance They inherit only in default of “A” and “C”
*Secondary heirs will only inherit if there are no The amount of liability to be assumed by the heir(s)
primary heirs. shall be limited only to the extent of the value of
properties and rights inherited.
NOTE: Brothers and sisters are neither compulsory
heirs nor strangers. However, they may be voluntary *The remaining 2M will not be uncollectible. The
heirs. creditor cannot go after Ryan’s personal assets to
collect the liability. The creditor will bear the loss.
ACCRUAL VS PAYMENT OF TAX
KINDS OF SUCCESSION
The estate tax accrues from the time of death;
while the payment of the estate is at the time the  Testamentary or Testate Succession
estate tax return is filed, which is 1 year from the - A type of succession that results from the
date of the decedent’s death, except in cases designation of an heir, made in a will
when extension are granted by the Commissioner or executed in the form prescribed by law.
when installment payment of the estate tax is  Legal or Intestate Succession
allowed. - A type of succession which is effected by
operations of law since the decedent did not
*If estate tax is not paid, the property cannot be
execute a will or if the last will & testament
disposed or enjoyed by the heirs. There is no
executed by him is void.
transfer of ownership.
 Mixed Succession
*There will also be penalties, which will accumulate - A type of succession which is effected by
through interest if not paid on time (1 year). operations of law since the decedent did not
execute a will or if the last will & testament
*Can be extended through request on BIR, there executed by him is void. A type of succession
should be valid reason and submit an evidence to which is effected partly by “will” and partly by
support the reason.
operation of law. (There is a will but there are
ILLUSTRATION: properties that are not covered by the will,
which will be based on the operations of law.)
Isabelle suffered a heart attack causing her death on
November 1, 2024. Her estate is composed of the QUESTION: What happens to your legal heirs if you
following: decide to leave everything to your friend under a
testamentary or testate succession?
 Cash in bank P1,000,000
 Commercial building 5,000,000 The compulsory heirs have their legitime, which is
 Cars 1,000,000 protected by the law. You can leave inheritance to
 House and Lot 3,000,000 anyone you want only up to certain point.
Regardless of what is written in the will, the
Ryan is the only heir of Isabelle. Her remains were compulsory heirs will still receive their rightful share.
cremated on November 8, 2024. The executor of
TESTAMENTARY OR TESTATE SUCCESSION
Isabelle’s estate filed the estate tax return and paid
the corresponding estate tax on April 30, 2025. The - A type of succession that results from the
properties left by the decedent were finally designation of an heir, made in a will executed in
distributed to Ryan on June 30, 2025. the form prescribed by law.
Deadline: Nov. 1, 2025 KIND OF WILLS
When will the transfer of ownership from the 1. Notarial / Ordinary / Attested Will
decedent to the heir take effect?
Requisites for a Valid Notarial Will
November 1, 2024
a. Must be in writing and executed in a language or
The rights to succession are transmitted from the dialect known to the testator
moment of death of the decedent, notwithstanding b. Must be subscribed at the end thereof by the
the actual transfer dated June 30, 2025. testator himself (signature at the end)
When should the estate tax accrue? c. Must be attested and subscribed by three or
more credible witnesses in the presence of the
November 1, 2024 testator and of one another.
Under the TRAIN Law, the filing of the estate tax *Notary public approved.
return is within one (1) year from date of death.
2. Holographic Will
Assume that Isabelle’s’ total outstanding
A written will which must be entirely written, dated
liabilities as of the time of her death amounted to
P12,000,000, how much of the outstanding and signed by the hand of the testator himself.
liabilities of the decedent should be assumed by  Codicil – a supplement or addition to a will,
Ryan? made after the execution of a will and annexed
P10,000,000 to be taken as a part thereof. (P.S.)
QUESTION: Can an alien, who is in abroad, have a 4. Refusal without justifiable cause to support
will which produces effect in the PH? the testator who disinherits such heir.
Yes, foreign will. *Inheritance is not just about wealth but also about
values and respect to the family.
As long as it follows the conflict of law rules between
the countries. It should be legal on the country in *The rights to inherit comes with responsibilities.
which the will is created.
RIGHT OF REPRESENTATION
May a will be revoked?
*If the heir died before the testator, they will be
Yes, a will may be revoked by the testator at any time represented by their children.
before his death. Any waiver or restriction of this
right is void.  The law further provides that “representation” is
not available to:
MODES OF REVOKING A WILL 1. As to compulsory heirs: In case of
repudiation, the one who repudiates
1. By implication of law (automatically due to legal
(rejected) his inheritance cannot be
processed)
represented. Their own heirs inherit in their
2. By some will, codicil, or other writing executed as
own right.
provided in case of wills
2. As to voluntary heirs
3. By burning, tearing, cancelling, or obliterating the
3. Voluntary heirs, legatees and devisees
will with the intention of revoking it. (dramatic
who:
approach of physical destruction)
a. Predecease the testator
*As long as it is clear that the testator has the b. Renounce the inheritance cannot be
intention to revoke the will. represented by their own heirs, with
respect to their supposed inheritance.
DISINHERITANCE  Right of representation takes place only in favor
It is a testamentary disposition by which a of children of brothers or sisters, whether full or
compulsory heir is deprived of, or excluded from the half blood and only if they concur with at least
inheritance to which he has a right. (cutting off the one uncle or aunt. (back up)
heir)  This rule applies only when the decedent does
not have descendants.
Requisites:
LEGAL OR INTESTATE SUCCESSION
1. Effected only through a valid will
2. For a cause expressly stated by law Causes of Legal Succession or Intestacy
3. Cause must be stated in the will itself (reason
1. If a person dies without a will, or with a void will,
must be stated)
or one which has subsequently lost its validity
4. Cause must be certain and true 2. When the “Will” does not institute an heir
5. Unconditional 3. Partial institution of heir. Consequently, intestacy
6. Total
takes place as to the undisposed portion.
7. The heir disinherited must be designated in such
a manner that there can be no doubt as to his
identity. (clearly stated)
*Revocation and disinheritance are both in the
control of the testator.
COMMON CAUSES OF DISINHERITANCE
*serious offenses
*it legally affects the legitime or share of a legally
entitled heir.
1. When the heir has been found guilty of an
attempt against the life of the testator, his/her
descendants/ascendants, and spouse.
2. When the heir has accused the testator of a
crime for which the law prescribes imprisonment
for 6 years or more, if the accusation has been
found groundless (false accusation)
3. When the heir by fraud, violence, intimidation
or undue influence causes the testator to make
a will or to change one already made
(manipulation)