BIR Ruling No. 023-12

January 11, 2012 BIR RULING NO. 023-12 RA 6426, PD 1246 Atty. Atilano Huaben B. Lim 4 Amethyst St., Sta. Monica II Dalandanan, Valenzuela City Sir : This refers to your letters dated June 25, 2010 and October 12, 2010 stating that your client, Romeo B. Go opened joint accounts with Augusto P. Urrutia at the then Equitable PCI Bank (now Banco de Oro), and Bank of the Philippine Islands at their Meycauayan, Bulacan branches; that thereafter, on September 5, 2007, Mr. Urrutia died unmarried, intestate, and without any children or issue; and that both the aforementioned banks, refused to allow Mr. Romeo B. Go to withdraw/close the subject Peso and US Dollar deposits unless there is a certification from the Bureau of Internal Revenue that the estate tax has been paid or that the estate is exempt from the payment of the said tax in compliance with Section 97 of the National Internal Revenue Code (NIRC). For this reason, you requested that a ruling be issued in favor of your client allowing him to withdraw his share of the deposits in the joint accounts without having to pay the estate tax of his deceased co-depositor. In reply thereto, please be informed that pursuant to Section 85 of the Tax Code of 1997, the value of the gross estate of the decedent shall be determined by including the value at the time of his death of all property, real or personal, tangible or intangible, wherever situated. Moreover, interest on a deposit account maintained by two persons is deemed to be equally owned by them for income tax purposes. The same presumption may likewise apply for estate tax purposes, thus, only half of the balance of the deposit should be reported for estate tax purposes pertaining to the decedent. Thus, the one-half portion of the balance of the said accounts shall not be included in the computation of the gross estate of the decedent. This shall serve as authority for the aforementioned banks to release half of the balances in the joint accounts between Romeo B. Go and Augusto P. Urrutia. After the shares of Romeo B. Go in the said bank accounts have been paid to him, the accounts shall cease to be "and/or" accounts and shall be converted to individual accounts in the name of Augusto P. Urrutia. The aforementioned banks are further required to submit reports to the Law Division, Bureau of Internal Revenue, National Office Building, that they have effected these changes within 30 days after the withdrawal by Romeo B. Go of his share in said bank accounts. DCaEAS 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.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue