BIR Ruling [DA-228-05]

May 19, 2005 BIR RULING [DA-228-05] Sec. 24 (c); 176-188; BIR Ruling No. 031-99 College Assurance Plan Philippines, Inc. 126 Amorsolo corner V.A. Rufino Streets, Legaspi Village Makati City Attention: Atty. Gregorio V. Marquez Head, Integrated Legal Affairs Operations Gentlemen : This refers to your letter dated December 21, 2004, requesting for a ruling that the Deed of Assignment from a trustor to the trustee is exempt from taxation. It is represented that College Assurance Plan Philippines, Inc. (Trustor) assigned one (1) membership certificate covered by Camp John Hay Golf Club, Inc. Membership Certificate No. 00891 to Conrado Muasque (Trustee) on December 21, 2004; that a Declaration of Trust was executed by the same parties dated February 3, 2005; that the Trustor is the real and absolute owner of one (1) proprietary membership certificate which it has allowed to be registered on the name of the Trustee; that the assignment is without consideration; and that the Trustee acknowledges and accepts to be the recipient of Proprietary Membership No. 00891 to have and hold in trust for and as the property of the Trustor. In reply, please be informed that under Section 24(C) of the Tax Code of 1997, a final tax at the rates of 5% and 10% shall be imposed upon the net capital gains realized during the taxable year from the sale, barter, exchange or other disposition of shares of stock in a domestic corporation, except shares sold, or disposed of through the stock exchange. In the instant case, there is no sale, barter or exchange of the 1 membership share of College Assurance Plan Philippines, Inc. is the real owner of the proprietary share involved while Conrado Muasque acted merely as Trustee. Accordingly, the transfer of the shares from the Trustor College Assurance Plan Philippines, Inc., the real owner therefore to the Trustee Conrado Muasque, without monetary consideration and by virtue of a Deed of Assignment respectively executed by College Assurance Plan Philippines, Inc. and Conrado Muasque is not subject to the capital gains tax. The conveyance is merely to be treated as a continuation and confirmation of title in favor of the ultimate and real beneficiary of the subject properties. Moreover; the said Deed is not subject to the donor's tax and the documentary stamp tax imposed under Section 176 of the Tax Code of 1997, but only to the documentary stamp tax on certificates under Section 188 of the same Code. (BIR Ruling No. 115-94) EScAHT This will therefore, serve as authority for the Corporate Secretary to transfer the membership share of College Assurance Plan Philippines, Inc. in the name of Conrado Muasque. 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, Commissioner of Internal Revenue By: (SGD.) JOSE MARIO C. BUAG Deputy Commissioner Legal and Inspection Group