Mr. Lee Hiong T. Wee

September 24, 2008 BIR RULING [DA-(I-023) 253-08] 27 (D) (2); 176; DA-436-06; DA-039-07; DA-038-07; UN-069-94 Mr. Lee Hiong T. Wee # 1404 Summit One Tower 530 Shaw Boulevard Mandaluyong City S i r : This refers to your letter dated July 8, 2008 requesting confirmation that the assignment in your favor of the 102,960 common shares of stock of First Marcel Properties, Inc. ("FMPI") being held in trust by your trustee, Marcel Trading Corporation ("Marcel"), is not subject to capital gains tax, documentary stamp tax and donor's tax. It is represented that Marcel, a corporation duly organized and existing under Philippine laws, was issued on July 30, 1997 FMPI Stock Certificate No. 001 for 102,960 common shares of stock ("FMPI shares") and held it in trust in your favor. Subsequently, Marcel executed an Acknowledgment of Trust with Deed of Conveyance dated August 5, 1997, acknowledging and declaring that it holds in its name the FMPI shares in trust in your favor. In December 2007, the Board of Directors of Marcel authorized the assignment of the FMPI Shares back to you as the trustor. Thus, on May 10, 2008; Marcel executed the Deed of Assignment of Shares of Stock assigning, transferring and conveying the FMPI shares in your favor without monetary consideration. In reply, please be informed that under Section 27 (D) (2) of the Tax Code of 1997, as amended, a final tax at the rates of 5% and 10% shall be imposed upon the net capital gains realized during the taxable year from the sale, exchange or other disposition of shares of stock in a domestic corporation except shares sold or disposed of through the stock exchange. However, since in the instant case, the assignment of the FMPI shares back to you by Marcel as the trustee thereof in a Deed of Assignment of Shares of Stock executed on May 10, 2008 is merely a confirmation of title in your favor as the beneficial owner and is without monetary consideration, the said transfer is not subject to capital gains tax under Section 27 (D) (2) of the Tax Code of 1997, as amended. (BIR Ruling Nos. [DA-436-06] dated 19 July 2006, [DA-039-07] dated 25 January 2007, DA-038-07] dated 25 January 2007 and [UN-069-94] dated 22 February 1994. HSTCcD Moreover, the transfer of the FMPI shares from Marcel to you is also exempt from donor's tax imposed under Section 98 of the Tax Code due to lack of donative intent on the part of the trustee. Finally, the transfer of the FMPI shares from the trustee, Marcel, in your favor as the trustor, without consideration, is not subject to documentary stamp tax imposed under Section 176 of the Tax Code of 1997, as amended. However, the notarial acknowledgment to the Deed of Assignment of Shares of Stock is subject to the documentary stamp tax of P15.00 under Section 188 of the same Tax Code. (BIR Ruling Nos. DA 121-06 dated March 16, 2006, DA 436-06 dated July 19, 2006 and DA-080-02 dated April 29, 2005) This ruling is being issued on the basis of the foregoing facts represented. However, if upon investigation, it will be disclosed 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