BIR Ruling No. 008-61

January 11, 1961 BIR RULING NO. 008-61 This is in answer to your letter of . . . requesting us to advise your Office as to whether or not the amount of P8,807.40 representing the share of Candido Cruz in the proceeds of the life insurance policy taken by his deceased brother, John T. Cruz, is subject to the inheritance tax which may be withheld pursuant to the provisions of Republic Act No. 1051. LLjur From the papers you submitted to this Office, it appears that the share in question was collected thru the Philippine Consulate General at New York, U.S.A., and the Department of Foreign Affairs is now remitting the same to the aforementioned heir. If the designation of the said heir as beneficiary to the insurance is irrevocable, his share in the proceeds of the insurance is exempt from the estate and inheritance tax; whereas, if the designation is revocable, his share is subject to said taxes. (Sec. 88(e) Tax Code). At any rate, even if said share is subject to tax it is not subject to the withholding provisions of Republic Act No. 1051 because it is not a payment made by the Government of money belonging to it. The Government in this case is merely remitting funds collected by it in behalf of said heir. Such remittance is not in payment of either services rendered or articles sold to the Government by a private individual. prll However, Republic Act No. 1051 covers only taxes which can be immediately determined and fixed at the time they are sought to be withheld, such as the contractor's percentage tax, forest charges, franchise tax, and ad valorem taxes on minerals and mineral products. The inheritance tax is not of this nature and is therefore not covered by said Act. (Revenue Regulations No. V-40).