BIR Ruling [DA-472-99]

August 17, 1999 BIR RULING [DA-472-99] Ms. Nelly O. Alindogan 268 P. Guevarra Avenue San Juan, Metro Manila M a d a m : This refers to your letter dated March 10, 1999 requesting for a ruling as to whether or not renunciation by the surviving spouse of her share in the estate of her husband in favor of their children and grandchildren who inherit in their own right is subject to donor's tax. It is represented that Francisco G. Alindogan, Sr. died intestate on December 21, 1983 in Metro Manila, Philippines; that he is survived by his wife Zoila O. Alindogan and their children namely: Erlinda, Yolando and Nelly, all surnamed Alindogan, and grandchildren by their only son, Francisco Alindogan, Jr. who predeceased the decedent, namely: Maria Angelica Q. Alindogan, Maria Belinda Q. Alindogan, Maria Cloudeliza Alindogan De Guzman, Dante Q. Alindogan and Edmundo Q. Alindogan; that the decedent left several real properties covered by TCT Nos. 18764, 87855, 87856 and 79218; that the decedent likewise left shares of stocks in the following corporations: Corporations No. of Shares Philex Mining Corporation 666,989 Rizal Memorial Colleges, Inc. 11 Consolidated Mines, Inc. 292,776 Acoje Oil Exploration 40,000 Pacifica, Inc. 100,000 Paper Industries Corp. of the Phils. 1,005 Phil. School of Business Administration 66 Republic Resources & Dev't. Corp. 100,000 Total 1,266,781 ======== and that in the Extra-judicial Settlement of the estate of said decedent, the surviving Spouse, Zoila O. Alindogan, waived all her rights, interest and participation in the above-described properties (real and personal) in favor of all her children and grandchildren for and in consideration of her love and affection for them. In reply, please be informed that when a person renounces/repudiates his inheritance, right of accretion takes place and the same is added or incorporated to that of his co-heirs, co-devisees or co-legatees. The share of the renouncer shall accrue to his co-heirs in the same proportion that they inherit pursuant to Articles 1018 and 1019 of the New Civil Code. However, among two or more compulsory heirs or to any of them and a stranger, the right of accretion shall take place only with respect to the free portion; and, if the part repudiated be the legitimate, no right of accretion shall take place as the other heirs shall succeed to it in their own right pursuant to Article 1021 of the same Code. Accordingly, your query as to whether or not the renunciation or waiver of Zoila Alindogan of her share in the estate of her late husband, Francisco Alindogan, Sr. in favor of their children, namely: Erlinda O. Alindogan, Yolando O. Alindogan and Nelly O. Alindogan and grandchildren, or the children of her son, Francisco Alindogan, Jr., who predeceased the decedent, and therefore, his children inherit in their own right, namely: Maria Angelica Q. Alindogan, Maria Belinda Q. Alindogan, Maria Cloudeliza Alindogan De Guzman, Dante Q. Alindogan and Edmundo Q. Alindogan is subject to donor's tax is answered in the negative pursuant to Articles 1018, 1019 and 1021 of the New Civil Code of the Philippines. (BIR Ruling No. DA-251-99 dated April 23, 1999) 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.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal and Enforcement Group)