Atty. Juanito P. Urbi

May 4, 2009 BIR RULING [DA-(DT-022) 217-09] Sec. 90 (A); 97; 105-99 dtd 7/13/99; DA-060-2005 dtd 2/22/05 Atty. Juanito P. Urbi BIR Village, Quezon City Sir : This refers to your letter dated March 18, 2009, requesting a confirmatory ruling to the effect that you and the heirs who have renounced, waived and repudiated the rights and interest in your inheritance in the estate of your deceased mother are not liable to the donor's tax. It is represented that you, Juanito P. Urbi, Ma. Corazon P. Tacud, Victoria T. Ureta, Estrella T. Valdez, Perfecto P. Tacud, the heirs of the late Hermilando P. Tacud and Eligio P. Tacud, are the sole heirs of your deceased mother, the late Martina P. Vda. de Tacud, who died intestate on September 27, 2006, leaving a parcel of residential land, together with the family home erected thereon situated at No. 29 Malunggay St., Project 7, Quezon City, embraced by Transfer Certificate of Title (TCT) No. TR-118842 (12210) issued by the Registry of Deeds of Quezon City; that in the settlement of the estate of the decedent, you, the heirs, executed a Deed of Extrajudicial Settlement of Estate With Waiver of Right, whereby, you, Juanito P. Urbi, Ma. Corazon P. Tacud, Victoria T. Ureta, Estrella T. Valdez, and Eligio P. Tacud renounced, waived, and repudiated all your rights and interests, in the aforesaid residential lot and family home, such that the entire property shall be divided only between Perfecto P. Tacud and the heirs of Hermilando P. Tacud, represented by his widow, Lucena Santos Vda. de Tacud, in the manner and in the proportion set forth therein. TACEDI In reply, please be informed that as a rule, when a person renounces/repudiates his part of the inheritance, the right of accretion takes place and the same is added or incorporated to that of the co-heirs, co-devises or co-legatees. The share of the one who renounces his part of the inheritance shall accrue to his co-heirs in the same proportion that they inherit pursuant to Articles 1018 and 1019 of the New Civil Code of the Philippines. In the instant case, when you, Juanito P. Urbi, Ma. Corazon P. Tacud, Victoria T. Ureta, Estrella T. Valdez and Eligio P. Tacud waived your shares in the inheritance, accretion had been effectively taken place in favor of Perfecto P. Tacud and heirs of Hermilando P. Tacud represented by his widow Lucena Santos Vda. de Tacud, and consequently, the renounced shares were added or incorporated to the share of the latter named heirs. Undoubtedly, when you and your co-heirs renounced your shares in the inheritance, you did not donate the property which had never become yours. Such being the case, the renunciation is not subject to donor's tax imposed under Section 98 of the Tax Code of 1997. Moreover, the inheritance, you and the other heirs renounced to Perfecto P. Tacud and to the heirs of the late Hermilando P. Tacud, is an additional inheritance to them. Consequently, the corresponding estate tax computed in accordance with the schedule provided for under Section 84 of the same Tax Code, shall be imposed upon transfer of the net estate to Perfecto P. Tacud and to the heirs of Hermilando P. Tacud. (BIR Ruling No. DA-251-99 dated April 23, 1999) SHacCD 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