Atty. Mari D. Fabian

September 8, 2009 BIR RULING [DA-(C-199) 507-09] Atty. Mari D. Fabian 2118 Herrera Tower V.A. Rufino corner Valero Streets Salcedo Village Makati City Sir/Madam : This refers to your letter dated July 2, 2009, which was referred to this Office by Revenue Region No. 8, Makati City, dated July 14, 2009, stating that on September 14, 2007, the Spouses Guillermo and Ms. Cecilia Cu Unjieng (Trustors) appointed Multi-National Investment Bancorporation (Assignor-Trustee) which has principal office address at the 41st Floor, Rufino Pacific Tower, 6784 Ayala Avenue, Makati City, as trustee by way of the creation of a trust account which was designated as 2007-TA-273; that the property forming the trust account consisted of cash in the amount of Twenty-Million Pesos (P22,000,000.00) * which the Trustors delivered to the Assignor-Trustee simultaneously with the execution of the Trust Agreement; that by virtue of the powers vested in the Assignor-Trustee under the trust agreement, the Assignor-Trustee purchased and acquired, for and on behalf of the Trustors, one (1) condominium unit located at the Ritz Tower Condominium, Ayala Avenue, Makati City (Trust Property); that the Real Property was registered in the name of Multi-National Investment Bancorporation (MIB)-Trust Account No. 273 under Condominium Certificate of Title No. 106243 of the Registry of Deeds for Makati City; that as provided in the aforementioned trust agreement, only legal title over the Trust Property shall pass to the Assignor-Trustee while beneficial ownership thereof shall vest upon the trust account owned by the Trustors; that the Trustors have recently appointed BDO Private Bank, Inc. (Assignee-Trustee) as successor trustee and the latter has accepted the assignment; that consequently, the Trustors have instructed the Assignor-Trustee to transfer the trusteeship and any and all trust rights, title, participation and interests over the Trust Property to the Assignee-Trustee. Based on the foregoing representations, you now request exemption from the payment of capital gains tax relative to the transfer of the aforesaid property from its original trustee, Multi-National Investment Bancorporation, to BDO Private Bank, Inc., as the successor trustee of the above-named Trustors, considering that there is no change or transfer of beneficial ownership over the said property. In reply thereto, please be informed that since there is no actual transfer of ownership over the said condominium unit as a result of the change of trustee from Multi-National Investment Bancorporation to BDO Private Bank, Inc. by virtue of an Agreement of Trust Rights over the Trust Property, the said transfer is not subject to capital gains tax under Section 24 (D) of the Tax Code of 1997. Moreover, the Agreement of Trust Rights over the Trust Property is not subject to documentary stamp tax under Section 196, supra . However, the notarial acknowledgment is subject to the documentary stamp tax of P15.00 under Section 188 of the Tax Code of 1997. (BIR Ruling No. DA-072-95 dated February 6, 1995) DaAIHC 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.) JAMES H. ROLDAN Assistant Commissioner Legal Service