BIR Ruling No. 092-65

August 20, 1965 BIR RULING NO. 092-65 The Regional Director Regional District No. 15 Zamboanga City S i r : Reference is made to your request for opinion on the question of whether or not the surviving spouse is a compulsory heir when the object of succession is exclusively the paraphernal property of the deceased wife, and whether or not the children who renounced their inheritance in favor of their father are subject to the inheritance and gift taxes. cdi In reply thereto, I have the honor to inform you as follows Mr. Percy Young Lee, the surviving spouse of the late Mrs. Concepcion Ko Lee is a compulsory heir in respect of her paraphernal property, pursuant to Article 887 of the New Civil Code. As regards the second question, the records show that seven (7) children of the late Mrs. Concepcion Ko Lee entered into an extra-judicial partition of the properties left by her wherein they adjudicated their individual shares or inheritance in favor of their father Mr. Percy Young Lee. In legal succession, accretion takes place in case of repudiation among heirs of the same degree. This is so because there is no right of representation. The co-heirs in legal succession are co-owners of the inheritance, for which reason there is always a right of accretion among them, unlike in testamentary succession where there may or may not be a right of accretion. (Arts. 1018, 977, 969, New Civil Code) However, if the renunciation by an heir or heirs is made in favor of one or more heirs but not all the other heirs, the act of renunciation is in effect an act of disposition inasmuch as the act of disposition and the benefits thereof are not enjoyed by everybody but only by one or more heirs. (Arts. 1050, 1015, 1016, New Civil Code). It should be noted that the instant case involves a legal succession and that the renunciation was made by all the compulsory heirs except the father Mr. Lee in whose favor the same was made. It would seem clear that when the children of the decedent renounced their individual shares or inheritance in favor of their father, accretion took place in the latter's favor and whatever property the decedent's children had renounced were added or incorporated to the father's share. Undoubtedly, when the children of the decedent renounced their inheritance they did not donate to their father the property which they would have inherited from their mother but which never became theirs because they renounced their rights thereto. Consequently, Mr. Lee by reason of the renunciation of the inheritance is deemed to have inherited the renounced portion of the decedent's estate from the time the latter died on August 30, 1961, in accordance with Article 1042 of the New Civil Code. In the light of the foregoing, this Office is of the opinion and so holds that the portion of the inheritance renounced by the children in favor of their father, Mr. Percy Young Lee is additional inheritance of the latter and not a donation from the former; that accordingly, no donor's and donee's gift taxes are due in this case; and that the children who renounced their inheritance are not subject to the inheritance tax. Very truly yours, (SGD.) BENJAMIN N. TABIOS Acting Commissioner of Internal Revenue