An estate refers to “All the money and property that is owned by the deceased at the time of death.”
An estate tax as a “tax on the right of the deceased person to transmit his/her estate to his/her lawful heirs and beneficiaries at the time of death.” (Bureau of Internal Revenue definition)
Example: Juan married Maria and they have three children namely: A, B, and C.
If Juan dies and he leaves a property worth P1 million, the heirs shall be one-half for Maria and one-half her three children.
Prior to the transfer of the property to the heirs, it is called the estate of Juan. To perfect the transfer, the estate of Juan should pay the estates taxes on the property to the BIR. It is not Maria, A, B, or C who should pay BIR but the estate of Juan.
In 2003, the Supreme Court in GR 152154 ruled that the aggregate amount of $356M now $658M deposited secretly in Swiss banks and which were later turned over in escrow to the Philippine National Bank because a Swiss court in 1998 said were ill-gotten.
The legally-acquired income by the Marcoses was $304,372.43 and any excess of these would be unexplained wealth, deemed ill-gotten and forfeited in favor of the State as per former Chief Justice Renato Corona.
In PCGG v. Peña (GR 149802, 2006), the SC likewise forfeited 111,415 controlling shares of Ferdinand Marcos Sr. in the Philippine Long Distance Telephone Co.
On April 25, 2012, shares of Marcos Sr. in Arelma SA, valued at $3,369,975 as of 1983, plus all interests and all other income that accrued thereon were also forfeited. In GR 213207 (2017),the SC ruled that all jewelry collections of former First Lady Imelda Marcos were deemed ill-gotten and forfeited.
Note that all these forfeited properties of $658M have been sequestered in favor of government and now in the hands of government. As such, the assets, whether money or property, were no longer owned by Marcos Sr. when he died in 1989.
His estate tax liability for properties left in his estate (presumed legal) was P23.29 billion. With interest plus penalties, it may have grown to P203.8B but it was only in December 2021 that BIR sent a demand letter to the estate of Marcos Sr. The assessment was thus demandable only then, unless disputed.
The complication was a question on the computation of the estate tax worth P23.29B because it included even those which have been forfeited and already in the hands of government. These properties can no longer be inherited by the heirs and the estate should not be taxed for the same any more.
In the interregnum, there was a supervening event – an estate tax amnesty.
President Rodrigo Duterte has signed Republic Act 11569 amending RA 11213 (Estate Amnesty Act to extend the validity of the estate tax amnesty program).
RA 11213 granted taxpayers a one-time opportunity to settle their tax obligations through an estate amnesty program that gives reasonable tax relief to estates with outstanding estate tax liabilities. Section 6 states that estate administrator, lawful heirs, or beneficiaries have two years or until June 15, 2021 to avail of the estate tax amnesty. RA 11569 has extended the deadline on June 14, 2023.
Those who avail of the estate tax amnesty enjoy immunity from the payment of estate taxes, civil, criminal, and administrative cases and penalties.
The Estate Amnesty Act covers the estate of decedents who died on or before Dec. 31, 2017, with or without assessments duly issued, whose estate taxes have remained unpaid or have accrued, as of Dec. 31, 2017.
The estate of Marcos Sr. has until 2023 to settle as per Duterte Law, like any of us here.
While Ferdinand Marcos, Jr. is one of the legal heirs with some manageable interest in the inheritance, he is not directly responsible for the same as it is not his personal liability but the estate of his father.
Unfortunately, he is running for office, the frontrunner can win but sana lang walang misinformation kaso we know how it goes.
Only in the Pilipins. Ay apo talaga!
Sigh.
April 30, 2024
