By Jun Ramirez
The Bureau of Internal Revenue (BIR) recently release the much-awaited regulations on the new and lower estate and donor’s taxes pursuant to the Tax Reform for Acceleration and Inclusion (TRAIN) law.
Revenue Regulations (RR) No. 12-2018 signed by BIR Commissioner Caesar R. Dulay uniformly fixed the rates on both estate and donor’s taxes at six percent, scrapping the old graduated and higher tax schedules.
The allowable deductions from the gross estate of the deceased are standard deduction of P5 million for resident and P500,000 for non-resident, plus claims against the unpaid debt and mortgages.
The tax exemption for the estate of family home has also been hiked from P1 million to P10 million.
Unlike before, the heirs are allowed to withdraw the bank deposits of the deceased, but subject to six percent final withholding tax
The tax rate applies to the estate of the deceased who died after the effectivity of the TRAIN law on January 1, 2018.
Section 11 of the RR No. 12-2018 stated that the “donor’s tax for each calendar year shall be six percent on the basic of the total gifts with the first P250,000 exempt from the tax.”