BIR Ruling [DA-224-03]

July 15, 2003 BIR RULING [DA-224-03] 24 (D) (1) 039-97 Bengzon Tugade & Escolin The Bengzon Law Firm 9th Floor, Ayala Life-FGU Center 6811 Ayala Avenue Makati City Attention: Atty. Manolito S. Soler Gentlemen : This refers to your letter dated October 22, 2002 requesting clarification of BIR Ruling No. DA050-2002 dated March 21, 2002 which is a reiteration of BIR Ruling No. 209-91 dated October 18, 1991, where this Office ruled that "In reply thereto, please be informed that the change of trustee of CAP Pension from Bank of Commerce to Allied Banking Corporation for the purpose of consolidating the administration of the CAP Pension is not taxable, and therefore, all properties both real and personal, monies, shares of stock, etc., in the name of the former trustee may be transferred to the newly designated trustee bank." In the aforesaid letter, you request for confirmation of your opinion that no capital gains tax, donor's tax and the corresponding documentary stamp tax are due on the transfer of real estate property covered by TCT No. 245714 issued by the Registry of Deeds for the Province of Pangasinan, from Bank of Commerce, as one of the Trustee Banks of CAP Pension, to Allied Banking Corporation (another Trustee Bank of CAP Pension), to guarantee the fulfillment by CAP Pension of its obligation under the pension plan agreement. SEHTIc In reply thereto, please be informed that since there is no actual transfer of beneficial title over the aforesaid property from Bank of Commerce to Allied Banking Corporation and the said transfer is without any monetary consideration, the same does not involve an actual transfer of ownership. Consequently, it is not subject to the capital gains tax and the corresponding documentary stamp tax imposed under Sections 24(D)(1) and 196 of the Tax Code of 1997. (BIR Ruling No. 039-97 dated April 3, 1997) Furthermore, the transfer is not subject to the donor's tax prescribed in Section 99 of the Tax Code of 1997, since the transfer from one trustee to another of all properties, real and personal of CAP Pension is not a gift considering that the beneficiary of the two trusts is the same. 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