Deductions from Gross Estate Under Philippines Tax Rules and Singapore Tax Rules
DEDUCTIONS FROM GROSS ESTATE
UNDER PHILIPPINES TAX RULES AND SINGAPORE TAX RULES
ADVENTIST UNIVERSITY OF PHILIPPINES
PUTING KAHOY
2008
DEDUCTIONS FROM GROSS ESTATE
PHILIPPINES TAX RULES
Funeral Expenses
For deaths occurring on or after January 1, 1998, the amount allowable as deduction shall be the lower amount between the actual funeral expenses (whether paid or unpaid) and five percent (5%) of the gross estate, but in no case to exceed two hundred thousand pesos (P200,000).
Judicial Expenses ‘Judicial expenses of the testamentary or intestate proceedings’ are those incurred in the:
• inventory taking of assets comprising the gross estate
• their administration
• the payment of debts of the estate
• distribution of the estate among the heirs
Claims against the Estate A claim against the estate is an obligation contracted by the decedent when he was alive which he should have settled or paid during his lifetime. It may arise out of contract, tort, and operation of law.
Claims against Insolvent Person
For claims of the deceased against insolvents persons to be deductible:
1. the full amount of the claim must be included in the gross estate
2. the incapacity of the debtors to pay their debts due to insolvency must be proven
Unpaid Mortgages
For unpaid mortgage to be deductible:
1. the fair market value of the property mortgaged must be included in the gross estate in full
2. the unpaid mortgage shall be to the extent that it was contracted bona fide and for an adequate and full consideration in money or money’s worth
Unpaid Taxes
These are taxes which have accrued as of the death of the decedent but which were unpaid as of the time of death.
Casualty Losses
There shall also be deducted losses incurred during the settlement of the estate arising from fires, storms, shipwreck, or other casualties, or robbery, theft or embezzlement; subject to the following conditions that such losses:
1. are not compensated for by insurance or otherwise;
2. at the time of the
UNDER PHILIPPINES TAX RULES AND SINGAPORE TAX RULES
ADVENTIST UNIVERSITY OF PHILIPPINES
PUTING KAHOY
2008
DEDUCTIONS FROM GROSS ESTATE
PHILIPPINES TAX RULES
Funeral Expenses
For deaths occurring on or after January 1, 1998, the amount allowable as deduction shall be the lower amount between the actual funeral expenses (whether paid or unpaid) and five percent (5%) of the gross estate, but in no case to exceed two hundred thousand pesos (P200,000).
Judicial Expenses ‘Judicial expenses of the testamentary or intestate proceedings’ are those incurred in the:
• inventory taking of assets comprising the gross estate
• their administration
• the payment of debts of the estate
• distribution of the estate among the heirs
Claims against the Estate A claim against the estate is an obligation contracted by the decedent when he was alive which he should have settled or paid during his lifetime. It may arise out of contract, tort, and operation of law.
Claims against Insolvent Person
For claims of the deceased against insolvents persons to be deductible:
1. the full amount of the claim must be included in the gross estate
2. the incapacity of the debtors to pay their debts due to insolvency must be proven
Unpaid Mortgages
For unpaid mortgage to be deductible:
1. the fair market value of the property mortgaged must be included in the gross estate in full
2. the unpaid mortgage shall be to the extent that it was contracted bona fide and for an adequate and full consideration in money or money’s worth
Unpaid Taxes
These are taxes which have accrued as of the death of the decedent but which were unpaid as of the time of death.
Casualty Losses
There shall also be deducted losses incurred during the settlement of the estate arising from fires, storms, shipwreck, or other casualties, or robbery, theft or embezzlement; subject to the following conditions that such losses:
1. are not compensated for by insurance or otherwise;
2. at the time of the
References: Ballada, S., & Ballada, W. (2007). Transfer and Business Taxation (8th ed.). Manila: DomDane Publishers. Inland Revenue Authority of Singapore. (2008). How to calculate estate duty. Retrieved March 12, 2008, from http://www.iras.gov.sg/irasHome/page03.aspx?id=1186#Exemptions