BIR Ruling [DA-399-03]

November 6, 2003 BIR RULING [DA-399-03] 91 (B) DA 285-98 dtd 6/29/98 Atty. Angel H. Gatmaitan 310 Prudential Bank Bldg. Plaza Lacson cor. Escolta St. Sta. Cruz, Manila S i r : This refers to your letter dated August 10, 2003 requesting on behalf of the Estate of the late Dr. Roy P. Villasor for an extension of up to the maximum time feasible within which to file and pay the corresponding estate tax due on the transmission by the said estate of its properties in favor of the heirs pursuant to Section 91(B) of the Tax Code of 1997. It is represented that the late Dr. Roy P. Villasor died last February 13, 2003; that the heirs of the decedent are his spouse Aurora L. Mejia Vda. De Villasor and three (3) children, namely, Roy Manuel, Ma. Aurora and Reynaldo Angel; that the decedent left substantial number of properties mostly located at Bacolod City and in Metro Manila consisting of land and shares of stocks, among others; that the heirs are finding difficulty in collating the necessary records and documents for the transfer. More so, the estate has no cash or liquid assets to pay the estate tax due; that the heirs have to liquidate some of the properties for the purpose but it would take time due to the present depressed condition of the real estate industry; and that the Last Will and Testament of the decedent is under Probate Proceeding before the RTC of Makati City docketed as SP Case No. M-5713 entitled "In Re: Probate of the Last Will and Testament of the late Dr. Roy P. Villasor, Ma. Aurora M. Villasor, Petitioner." IaSAHC In reply, please be informed that pursuant to Section 91(B) of the Tax Code of 1997, which provides, viz : "SEC. 91. Payment of Tax . xxx xxx xxx "(B) Extension of Time When the Commissioner finds that the payment on the due date of the estate tax or of any part thereof would impose undue hardship upon the estate or any of the heirs, he may extend the time for payment of such tax or any part thereof not to exceed five (5) years, in case the estate is settled through the courts, or two (2) years in case the estate is settled extrajudicially. In such case, the amount in respect of which the extension is granted shall be paid on or before the date of the expiration of the period of the extension, and the running of the Statute of Limitations for assessment as provided in Section 203 of this Code shall be suspended for the period of any such extension. xxx xxx xxx "If an extension is granted, the Commissioner may require the executor, or administrator, or beneficiary, as the case may be, to furnish a bond in such amount, not exceeding double the amount of the tax and with such sureties as the Commissioner deems necessary, conditioned upon the payment of the said tax in accordance with the terms of the extension." xxx xxx xxx Accordingly, in view of the aforestated justifiable reasons, your request for extension of 5 years from August 10, 2003 to August 10, 2008 within which to pay the estate tax due thereon is hereby granted, provided that the executor, administrator or beneficiary shall furnish a bond in such amount not exceeding double the amount of the tax and with such sureties as the Commissioner deems necessary, conditioned upon the payment of the said tax in accordance with the terms of the extension. It shall be understood, however, that the estate shall be liable to the corresponding interest that have accrued thereon up to the time of payment of the estate tax due on the transmission by the said estate of the properties in favor of the heirs pursuant to Section 249 of the Tax Code of 1997. (BIR Ruling No. DA-285-98 dated June 29, 1998) Very truly yours, (SGD.) JOSE MARIO C. BUAG Deputy Commissioner Legal and Inspection Group