Exemption from the Payment of the Estate Tax

July 18, 1988 BIR RULING NO. 336-88 87 000-00 336-88 Gentlemen : This refers to your letter dated December 16, 1986 requesting a ruling as to whether the residuary estate left by a deceased ward who was under guardianship by reason of minority or incompetency and receiving benefits under R.A. No. 360 is exempt from the payment of the estate tax. In reply thereto, I have the honor to inform you that the estate tax is imposed on the privilege of a decedent to transmit property at death. It is not a tax on property. The estate tax accrues as of the date of the death of the decedent. (Lorenzo v. Posadas, 64 Phil. 353) What is being taxed is not the benefits received by the beneficiary from the United States administered by the U.S. Veterans Administration which is exempt from taxation under R.A. 360 but the privilege of the deceased ward to transmit his estate to his lawful heirs and beneficiaries. Such being the case, the estate of the aforesaid deceased ward is subject to the payment of the estate tax pursuant to Section 87 of the Tax Code, as amended. cdtech Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner