BIR Ruling [DA-044-04]

February 4, 2004 BIR RULING [DA-044-04] 60 (B); 368-88 Deutsche Bank AG Manila Branch 26th Floor, Ayala Tower One Ayala Triangle Makati City Attention: Ms. Naneth S. Vinoya Trust Deputy Head and Mr. Paulino G. Erjas Trust Operations Head Gentlemen : This refers to your letter dated August 25, 2003 stating that on August 24, 1999, Deutsche Bank AG Manila Branch Trust Department (DB Trust) was appointed by CMG Plans, Inc. (CMG) as trustee of its Pre-Need Trust Funds by virtue of a Trust Agreement; that the beneficial owners of all assets held under these trust funds are the plan-holders of CMG's pre-need trust plans; that on the other hand, United Coconut Planters Bank-Trust Banking Division (UCPB-Trust) was similarly appointed by CMG as trustee of its Pre-need Trust Fund under a Trust Agreement dated December 18, 1996; that the CMG's pre-need plan-holders are likewise the beneficial owners of this trust fund; that on November 20, 2002, CMG executed a Secretary's Certificate confirming the appointment of DB Trust as successor trustee of UCPB-Trust; that this resulted in the transfer and consolidation of CMG's entire trust fund from UCPB-Trust to DB Trust, which included a certain piece of land situated in Antipolo, Rizal covered by TCT No. R-9809; that on December 12, 2002, UCPB-Trust executed a Deed of Assignment in favor of DB Trust assigning and relinquishing all its rights and interest over the aforementioned real property; and that pursuant thereto, DB Trust has been authorized to initiate the following: registration of the Deed of Assignment with the Register of Deeds of Antipolo; Transfer of the TCT from UCPB-Trust to the name of Deutsche Bank AG Manila Branch Trust Department as Trustee of CMG Plans, Inc. Pension Fund (Trust Account No. TR-027). Based on the foregoing representations, you now request exemption from the payment of capital gains tax relative to the transfer of the aforesaid property from its original trustee, UCPB-Trust, to DB Trust, as the successor trustee of CMG Pre-Need Trust Fund, considering that there is no change or transfer of beneficial ownership over the said property. EDATSI In reply thereto, please be informed that since there is no actual transfer of ownership over the aforementioned property as a result of the change of trustee from UCPB-Trust to DB Trust under a Deed of Assignment, the said transfer is not subject to capital gains tax under Section 24(D) of the Tax Code of 1997. Moreover, the Deed of Assignment is not subject to the documentary stamp tax under Section 196 of the same Code. However, the notarial acknowledgment is subject to the documentary stamp tax of P15.00 under Section 188 of the Tax Code of 1997. (BIR Ruling No. DA072-95 dated February 6, 1995) This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. Very truly yours, (SGD.) MILAGROS V. REGALADO Assistant Commissioner Legal Service