BIR Ruling No. 220-83

December 8, 1983 BIR RULING NO. 220-83 Gentlemen : This refers to your letter dated June 26, 1982 in behalf of your client, Mr. Eduardo S. Lichauco, requesting a ruling to the effect that the Deed of Quitclaim executed on March 12, 1981 by Mr. Lichauco in favor of Mrs. Lichauco over a parcel of land with all improvements existing thereon covered by Transfer Certificate of Title No. 345212 of the Register of Deeds of Rizal, is not subject to donor's tax. It appears that on December 6, 1980, the spouses Eduardo S. Lichauco and Josefina Trinidad-Lichauco, entered into an Agreement to Dissolve Conjugal Partnership which was approved by the Court of First Instance of Rizal in a decision rendered on January 20, 1981, in Special Proceedings No. 9413; that to implement the said Agreement Mr. Eduardo Lichauco executed a Deed of Quitclaim on March 12, 1981, whereby he waives, cedes, assigns unto Mrs. Josefina T. Lichauco, all his rights, title and interest in and to a parcel of land with all improvements existing thereon, situated in Makati, Rizal, and covered by Transfer Certificate of Title No. 345212 of the Register of Deeds of Rizal; that the quitclaim shall take effect upon approval by the Court of First Instance and the delivery to Mr. Lichauco of P1,000,000.00, Philippine Currency, as his share in the balance of the conjugal assets; and that the Deed of Quitclaim was likewise approved by the CFI, in an Order dated March 17, 1981. In reply, I have the honor to inform you that no donor's tax accrued and became collectible on account of the abovestated quitclaim because no donation took place or could take place between Mr. Lichauco and Mrs. Lichauco. They segregated and adjudicated for their individual and separate ownership the properties which from the celebration of their marriage right-fully belonged to them equally. Accordingly, there is no clear and unmistakable intent on the part of one or the other to part away with his or her dominion oven an exclusive property. What actually happened was the appropriation to themselves by Mr. and Mrs. Lichauco of their respective shares in the dissolved conjugal partnership. Thus, in return for the waiver, cession, assignment and execution of quitclaim by Mr. Lichauco of all his rights, title and interest over his one-half share in their conjugal house and lot in favor of Mrs. Lichauco, he received one million pesos (P1,000,000.00), as his share in the balance of the conjugal assets. Article 133 of the Civil Code of the Philippines provides that every donation between the spouses during the marriage is void. Although there was a dissolution of the conjugal partnership, the marriage still subsists. Mr. Lichauco therefore, cannot validly donate, directly or indirectly to Mrs. Lichauco, or vice versa. Accordingly, the aforestated Deed of Quitclaim executed by Mr. Eduardo Lichauco may be registered with the Register of Deeds of Makati, without the necessity of payment of donor's tax by him. aisadc Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner Bureau of Internal Revenue