Mr. Carmelo Santiago

September 25, 2008 BIR RULING [DA-(I-024) 257-08] DA429-04 Mr. Carmelo Santiago No. 1730 Banyan Street Dasmarias Village Makati City S i r : This refers to your letter dated September 24, 2008 stating that Five Hundred Fifty Five Corporation (Corporation), as Trustee, is a domestic corporation duly registered with the Securities and Exchange Commission (SEC) with principal office address at Unit 201 Simjuanco Building, No. 210 Zodiac Street, Palm Village, Makati City; that on the other hand, you, as the Trustor, are the majority stockholder of the said corporation; that the Trustee upon instructions from the Trustor purchased a parcel of land together with the improvements thereon located at Dasmarias Village, Makati City, by using your own funds; that for this purpose, the Trustee through Board Resolution executed a Declaration of Trust and Assignment in your favor; that pursuant to said Deed, the Trustee acknowledged that it is purchasing the above-mentioned property for and in behalf of the Trustor, who has previously advanced funds to the Trustee; that the Trustee also acknowledged the right and interest of the Trustor as beneficial owner of the said property; that on September 24, 2008, pursuant to the Declaration of Trust, the Trustor instructed the Trustee to cause the transfer in trustor's name of the said property, which he beneficially owns; and that said transfer which will be made pursuant to the trust established in the Declaration of Trust, shall be without consideration. Based on the foregoing representations, you now request for opinion on the tax consequence of the said transfer. In reply thereto, please be informed as follows: 1. The transfer of title over the said property by Five Hundred Fifty Five Corporation, as Trustee, in your favor, as Trustor, to be effected through a Declaration of Trust is not subject to capital gains tax imposed under Section 24 (D) (1) of the Tax Code of 1997 nor to the creditable withholding tax prescribed in Revenue Regulations No. 2-98, as amended. Considering that the transfer is not for monetary consideration and merely acknowledges and confirms the title and ownership over the said property by you. (BIR Ruling No. DA222-00 dated April 27, 2000) 2. The transfer of title over the said property in your favor is likewise not subject to the 12% value-added tax because the said property is not held primarily for sale to customers or for lease in the ordinary course of business. 3. The transfer of the above-mentioned property in your favor without any monetary consideration is not subject to gift's tax imposed under Section 99 of the Tax Code of 1997, since there is no donative intent on the part of the parties. LLjur 4. Finally, the Declaration of Trust executed by the Trustee and the Trustor whereby the former will convey to the latter the said property without monetary consideration is likewise not subject to the documentary stamp tax imposed under Section 196 of the Tax Code of 1997. However, the notarial acknowledgment is subject to the documentary stamp tax of P15.00 under Section 188, supra. 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