BIR Ruling [DA-719-06]

December 15, 2006 BIR RULING [DA-719-06] 24 (D) (1); 196; 188; DA-458-2006; DA-574-2006 Ms. Marilou L. Del Rosario 8-A Gilmore Townhouse, Gilmore St. Quezon City M a d a m : This refers to your letter dated October 16, 2006 requesting for a ruling that the transfer of the Certificate of Ownership of Garden Peace identified as Sec. E, Block 328, Lots A and B of the Loyola Memorial Park covered by Certificate No. 78-19405 and Contract No. 31052 (a continuing easement and a perpetual right of user granted by the Group Developers, Inc.) (herein referred to as the "Property") by Salvador Del Rosario, as trustee in favor of Marilou Del Rosario, as trustor/beneficiary is exempt from capital gains, income, donor's and documentary stamp taxes. Based on your representations, as well as from the documents submitted, it appears that on March 14, 1998, Salvador Del Rosario and Marilou Del Rosario executed a Declaration of Trust with Deed of Assignment ("Deed"), whereby the former is the Trustee/Assignor and the latter is the Beneficiary/Assignee; that Salvador Del Rosario ("Trustee/Assignor") acknowledges that the Property was purchased out of the money belonging to Marilou Del Rosario ("Beneficiary/Assignee") and is being held by the Trustee/Assignor in trust and for the benefit of the Beneficiary/Assignee; that the Trustee/Assignor acknowledges that the Property was acquired with the intention of reconveying the same to the said Beneficiary/Assignee; and that pursuant to the Deed, the Trustee/Assignor has transferred and assigned all rights, title, and interest over the Property. In reply, please be informed that since the transfer of the aforesaid Property by Salvador Del Rosario, as trustee, in favor of Marilou Del Rosario, as trustor, is without monetary consideration and is merely a confirmation of title in favor of the beneficial owner, the same is not subject to the income and capital gains taxes imposed under Section 24(D)(1) of the Tax Code of 1997, as amended. Likewise, the conveyance of realties to trustees or other persons without consideration is not taxable under Section 185 of the Revised Documentary Stamp Tax Regulations. Thus, the transfer by Salvador Del Rosario to Marilou Del Rosario pursuant to the Declaration of Trust With Deed of Assignment, which is made without monetary consideration, is not subject to the documentary stamp tax imposed under Section 196 of the Tax Code of 1997, as amended. However, the notarial acknowledgment to the said deed is subject to the documentary stamp tax of P15.00 pursuant to Section 188 of the Tax Code of 1997. EAICTS 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.) JAMES H. ROLDAN Assistant Commissioner Legal Service