Non-resident Aliens Subject to Philippine Income Tax on Their Respective Share in the Proceeds from Sale of Real Properties

November 7, 1986 BIR RULING NO. 233-86 55 000-00 233-86 Gentlemen : This refers to your letter dated October 18, 1986 requesting a ruling as to whether the heirs of the ESTATE OF LINNIE JANE HODGES who are non-resident aliens are subject to Philippine income tax on their respective share in the proceeds from the sale of certain real properties of the estate. It is represented that the Estate of Linnie Jane Hodges owns real properties in the Philippines; that the heirs of the estate are non-resident aliens; that the said properties are gradually being sold since the Supreme Court has ruled that the heirs being non-resident aliens has to divest themselves of property holdings in the Philippines; that the estate has paid the corresponding capital gains tax due on the sale of said properties which are capital assets; and that the proceeds of the sale had been partly distributed to the heirs. In reply thereto, I have the honor to inform you in the affirmative. Pursuant to Section 212 of the Income Tax Regulations implementing Sections 54 and 55 of the Tax Code as amended, since, as represented, the final capital gains tax has already been paid by the estate on its sale of the aforementioned real properties, the heirs shall no longer be subject to Philippine income tax on their respective share in the distributed proceeds of such sale. (See also Sec. 29(b)(3) Tax Code). Very truly yours, (SGD.) ROMULO M. VILLA Acting Commissioner