Sequestered Assets of Mr. Jose L. Africa Includible in Gross Estate Subject to Estate Tax

February 23, 1996 BIR RULING NO. 025-96 78 248 000-00 025-96 Atty. Victor Africa Telcoms Plaza, 316 Gil J. Puyat Avenue Salcedo Village, Makati City S i r : This refers to your letter dated January 19, 1996 requesting a ruling as to whether or not the sequestered assets of your late father, Mr. Jose L. Africa is includible in his gross estate subject to estate tax. cdll It is represented that in a proposed extrajudicial settlement of the estate of your father, you will be the recipient of certain assets which however, are being claimed by the government for being "ill gotten wealth" of your late father; that the said assets are the subject of a judicial proceedings in the Sandiganbayan with the possible consequence that if the Government wins, said assets will be owned by the Government; that the sequestered assets are now in the possession and/or control of the Government and in fact enjoying all the attributes of ownership pertinent thereto; and that at the time of the death of your father, he neither possesses nor enjoy said assets, since he was not allowed to exercise his voting rights on his stockholdings as well as to receive the dividends thereof. In reply thereto, please be informed that the value of all property, real or personal, tangible or intangible, wherever situated, the beneficial ownership of which was in the decedent at the time of his death shall be included in his taxable estate. [Section 78, Tax Code, as amended] Since the aforementioned sequestered assets are in the name of your father at the time of his death, said assets are includible in his gross estate. However, inasmuch as the said assets are held by the government in custodia legis and ownership thereof is being questioned in Court, collection of the estate tax that would have been due on the transmission of the said estate to the heirs shall be suspended. If later on the late Jose L. Africa is adjudged by the Court to be the real owner of the sequestered properties, the corresponding value thereof shall be declared as part of his gross estate and the estate tax due thereon paid within thirty (30) days after the decision has become final and executory. Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue