Request for Exemption from Payment of Capital Gains Tax and Documentary Stamp Tax on Registration of Voluntary Partition Between Co-Owners of Parcel of Land

June 22, 2016 BIR RULING NO. 274-16 Sec. 24 (D) (1) NIRC; BIR Ruling No. 204-2013 Agustina D. Lemyaen No. 90 Purok 8, Upper Pinget Baguio City Madam : This refers to your letter dated November 18, 2014 wherein you requested for exemption from payment of Capital Gains Tax and Documentary Stamp Tax on the registration of a Voluntary Partition between you (Ms. Lemyaen) and the other co-owners of a parcel of land. It is represented that Ms. Lemyaen together with other individuals agreed to buy a land registered in the names of Arturo Calubad and Antonio Keh which is covered by Transfer Certificate of Title (TCT) No. 016-2011001017, their respective individual shares are as follows: Names Area (in sq.m.) Teresa S. Luis 200 Ramon S. Luis 400 Jovita P. Santiago 200 Raniel S. Luis 200 Esteban W. Sapdoy 400 Agustina D. Lemyaen 1912 Rowin Zarael Lemyaen 200 Alejo D. Bestog 400 Danilo C. Mangigil, Jr. 200 Janice M. Catanglan 200 Meriam P. Langcao 400 Boyle M. Langcao 200 Geralyn A. Dongla 200 Aida P. Pati 600 Frankie D. Suvilla 200 Dominga W. Barba 200 Dominga P. Bakidan 200 Perry A. Liwanen 200 Lily A. Talawec 200 Norma L. Guimte 200 Dick P. Eliseo 200 Elisol P. Lao-ay 354 Tecla L. Padsoyan 200 Norvelita A. Logronio 200 Regina B. Federico 200 Cecilia E. Danglosi 200 Rommel A. Sapdoy 200 Antonio A. Palicas 400 Francisco B. Barba Jr. 200 Joyce P. Aguilan 200 Mary Teresa A. Laus 200 Alfredo Mangigil 200 Arnel B. Pablo 200 Arlyn P. Bestog 135 It is further represented that for their convenience in transacting with the vendors, the aforementioned individuals (trustors) agreed to appoint two of them in the persons of Agustina D. Lemyaen and Alejo D. Bestog (trustees) to be named as vendees in deed of sale so as to avoid inconvenience and expenses for the others to be travelling to Manila just to sign the deed of sale and other pertinent documents. SDAaTC On February 7, 2014, a Deed of Absolute Sale covering the same TCT was executed with Ms. Lemyaen and Mr. Bestog as vendees. As a consequence, a new title, TCT 016-2014000385 was issued to the vendees. The agreement between the trustors and the trustee was registered with the Registry of Deeds after the new Transfer Certificate of Title was issued in the name of Ms. Lemyaen and Mr. Bistog. On November 16, 2014, a contract of voluntary partition was executed by the co-owners. In reply thereto, please be informed as follows: The transfer of title over the aforesaid property by Ms. Lemyaen and Mr. Bestog (trustee), in favor of the other co-owners (trustors), the beneficial owners thereof, to be effected through a Deed of Voluntary Partition is not subject to capital gains tax imposed under Section 24 (D) (1) of the National Internal Revenue Code of 1997, as amended, (NIRC) considering that the transfer is not for monetary consideration but merely acknowledges and confirms the title and ownership over the above-mentioned properties of the trustors. Finally, the Deed of Voluntary Partition executed by and between the trustees Ms. Lemyaen and Mr. Bestog, and the other co-owners, whereby the former will convey to the latter the above-mentioned property without monetary consideration is likewise not subject to the documentary stamp tax imposed under Section 196 of the NIRC. However, the notarial acknowledgment is subject to the documentary stamp tax of P15.00 under Section 188, supra. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue