Request for Permission to File Estate Tax Return and Capital Gains Tax Returns on Transfers of Certain Properties in RDO No. 52, Parañaque, Metro Manila

November 21, 1996 BIR RULING NO. 123-96 83 (d); 84; 21 (e) 000-00 123-96 Ms. Maria Pilar A.. Recto No. 11 MJS Avenue Levitown Executive Paraaque, Metro Manila M a d a m : This refers to your letter dated October 28, 1996 stating that the late Helen L. Omictin died intestate on August 3, 1977 at Larena, Siquijor Province leaving two parcels of land situated at No. 134 Don Rufino Ave., Tahanan Village, Paraaque, Metro Manila covered by TCT Nos. 448547 and 448546; that the decedent was survived by her husband, Mr. Eulogio M. Omictin, Jr. And Ms. Marilou Omictin Tomimbang; that the estate of the decedent did not file an estate tax return and did not pay the estate tax due thereon; that on May 6, 1990, the heirs, Mr. Eulogio M. Omictin, Jr. And Marilou Omictin Tomimbang sold their respective interest in said properties to Ms. Nancy Magpiong Ward, a US citizen and a resident of Honolulu, Hawaii, USA; that the heirs-sellers did not pay the capital gains tax and documentary stamp tax on the transaction; that on October 8, 1996, Ms. Nancy Magpiong Ward sold the said properties to Mrs. Ma. Evelyn M. Escudero and you for a consideration of P4 million; and that Mrs. Ma. Evelyn M. Escudero and you agreed to assume the payment of all the taxes on the aforementioned three (3) transfers of the said real properties. In connection therewith, you are requesting permission to file the estate tax return as well as the capital gains tax returns on the transfers of said properties in Revenue District Office No. 52, Paraaque, Metro Manila. In reply thereto, please be informed that except in cases where the Commissioner of Internal Revenue permits, the estate tax return shall be filed and the estate tax paid with the Revenue District Officer, Collection Agent or any authorized Treasurer of the city or municipality in which the decedent was domiciled at the time of his death or if there is no legal residence in the Philippines, then with the Office of the Commissioner of Internal Revenue (Secs. 83 (d) and 84, Tax Code, as amended). Such being the case, although the Commissioner of Internal Revenue may permit the filing of the estate tax return and the payment of the estate tax due on the transmission of the estate of a decedent with the RDO, Collection Agent or duly authorized Treasurer of the city or municipality other than the RDO Collection Agent or duly authorized Treasurer of the city or municipality where the decedent was domiciled at the time of his death, nevertheless the Estate Tax Clearance has to be issued by the Revenue District Officer which has jurisdiction over the domicile of the decedent at the time of his death as there might still be some property registered in the name of the decedent which were not included in the estate tax return filed with the RDO, other than the RDO of the place where the decedent was domiciled at the time of his death. In this connection, the RDO where the Estate Tax Return was filed and the estate tax was paid shall issue a letter to the RDO where the decedent was domiciled at the time of his death confirming that the tax due on the transmission of the estate of the decedent corresponding to the aforesaid properties has been paid. (BIR Ruling No. 100-96 dated September 13, 1996) Moreover, under Revenue Regulations No. 11-96 dated August 7, 1996 amending Revenue Regulations No. 13-85, as amended, as amplified by Revenue Memorandum Order No. 34-96, dated November 15, 1996, and regarding the preparation and issuance of tax clearance certificate (TCL) [formerly Certificate Authorizing Registration (CAR)] for registration of real estate transactions in line with the computerized tax administration, the estate tax clearance shall be issued by the RDO of the revenue district where the decedent was domiciled or registered, regardless of the location of his properties. If the decedent was domiciled in the Pilot RDO, TCL shall be issued. On the other hand, if the decedent was domiciled in a non-pilot RDO, the old form for CAR shall be issued. If the decedent is not registered, the executor/administrator or any of the heirs shall register the Estate of the decedent with the Revenue District Office in the place of residence of the decedent at the time of his death, and the TCL shall be issued by the RDO of said district office. (Sec. 3 (3.1) and (3.2), Revenue Regulations No. 11-96). However, since as represented the decedent, Helen L. Omictin died at Larena, Siquijor province, which is very far, and the heirs are non-residents of the Philippines, the estate tax return may be filed and the payment made with the RDO in Paraaque where the property is located. With regard to the tax clearance for Capital Gains tax, upon filing of the capital gains tax return by an individual, estate or trust, and full payment of the capital gains tax due on the sale, transfer, barter, exchange or other disposition of real property, including conditional sale of property classified as capital asset, the Revenue District Officer (RDO) of the revenue district where the transferor is registered shall issue the corresponding tax clearance (TCL) certificate authorizing the registration of the real property in favor of the transferee by the Register of Deeds. (Sec. 2, Revenue Regulations No. 11-96) Considering, that Ms. Nancy Magpiong Ward, the transferor in the last transaction involving the said properties is a non-resident alien and is not a registered transferor for purposes of Revenue Regulations No. 11-96, as amplified by Revenue Memorandum Order No. 34-96, the filing of the capital gains tax return and the payment of the capital gains tax due on the sale as well as the issuance of the tax clearance authorizing the registration of the real properties in favor of Mrs. Ma. Evelyn M. Escudero and you by the Register of Deeds may be issued by the Revenue District Officer of Paraaque, Metro Manila where the property is located and where the transferee is a resident. cdta Very truly yours, ESTELITA C. AGUIRRE Acting Commissioner of Internal Revenue