Castillon Law Office and Associates

November 12, 2008 BIR RULING [DA-(ET-012) 424-08] 85 (A); DA-437-03 Castillon Law Office and Associates 8-B, Berlin St., Capitol Homes Subdivision Commonwealth Ave., Quezon City Attention: Atty. Egmedio J. Castillon, Jr. Gentlemen : This refers to your letter dated June 30, 2008 requesting in effect, for a clarification on whether or not your client, Ms. Rosalina Nares, who is a Filipino citizen, previously married to an alien who is now deceased, is required to settle the estate tax of her husband before she may dispose her exclusive property. cDACST It appears that Rosalina Nares is the registered and absolute owner of parcels of land located at Brgy. San Dionisio, Paraaque City and covered by Transfer Certificates of Title (TCT) Nos. 34515 and 34516. She is the widow of Masaru Hagiwara who is a Japanese national as evidenced by the latter's Passport No. ME 9713162 issued by Japan on 6 November 1989. On September 2, 1993, Mr. Masaru Hagiwara died of cardiac arrest at the Makati Medical Center, Makati, Metro Manila. Per records presented, Rosalina Nares, acquired said properties out of her exclusive and paraphernal funds. In reply, please be informed that aliens in general are prohibited from owning landholdings in the Philippines. The Constitution in particular purposely aims to preserve our nation's domain for the future generation of Filipinos. In the case of Krivenko v. The Register of Deeds, City of Manila , 79 Phils. 461, portion of which is quoted as follows: "We are construing the Constitution as it is, and not as we may desire it to be. Perhaps, the effect of our construction is to preclude aliens, admitted freely into the Philippines from owning sites where they may build their homes . But if this is the solemn mandate of the Constitution, we will not attempt to compromise it even in the name of amity or equity." (underlining supplied) Moreover, since foreigners are prohibited expressly or explicitly by the Constitution and other laws from acquiring real properties in the Philippines, it is thus apparent that the aforementioned properties are not conjugal or absolute property of the spouses. Not being conjugal or absolute property, the said lots will not form part of the gross estate of Mr. Hagiwara. We hasten to add that under LRC Consulta No. 175 dated January 6, 1958, re: Bascara v. Register of Deeds of Bataan, which provides, thus: "Where property registered and covered by a Torrens title is paraphernal in character and the Certificate of Title issued in the name of the wife describes her civil status as married, in case she has become a widow the amendment of the civil status as appearing on the same Certificate may not be absolutely necessary, for after all the deceased husband or his heirs have no interest and need not participate in the transaction involving such paraphernal property. Hence, this office of the opinion as it hereby holds that Ms. Nares may sell, transfer or encumber the aforementioned real properties without having to secure an estate tax clearance for the estate of her deceased husband. HESCcA This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be ascertained that the facts are different, then this ruling shall be considered as null and void. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service