General Principles of Estate Taxation

talks about what properties will be subject to estate tax

two categories: a) worldwide properties b) properties within the
PH

Types of taxpayers 1) citizens 2) residents

- for citizen: as long as PH citizen (even if you have a green card),
taxed worldwide >>> Why? = they remain protected by the
State
- resident - worldwide
- nonresident alien only properties within the PH subject to
estate tax
What if a decedent is a dual-citizen? >> worldwide because as long as
AT LEAST ONE of citizenships is PH
The estate is a separate taxable entity
it is not tax efficient to die with dual-citizenship
worst scenario = citizen AND resident of multiple of countries >>
taxed by a lot more jurisdictions
Thats why its goot to have an estate planner == best plan
would result with nothing to settle upon death
Need good grounding in family law, succession, corpo to be good
with estate taxes
For non-resident aliens
Principle of reciprocity intangible properties of NRA may be exempt
from estate taxes
Intangible personal property = no physical existence --- stocks,
receivable etc.
Concept of residence in estate taxes means animus revertendi =
where you want to go back at the end of the day
2 cases read together would illustrate the concept of residence == if
you note in the case of Velilla, the decedent passed away outside PH.
ON the other hand, in the case of Lara, decedent died in PH.
>> if you look closely, it would clearly show that when you talk about
residence, it has something to do with INTENT. Courts look at the
factual circumstances of each case to determine intent. In Velila,
decedent was forced out of the PH so his domicile was still here despite
the fact that he died outside.

How to calculate estate tax?

0. Determine status of taxpayer (resident, NRA, citizen)
1. Start with Gross Estate
two components: 1) gross conjugal if married; 2) gross exclusive
2. Deduct allowable deductions
two kinds: a) ordinary b) special
== gross conjugal estate
3. Then deduct the share of surviving spouse in the gross conjugal
estate (if married) (equivalent to gross conjugal less deductions
multiplied by 50%)
== net estate
4. multiply tax rate
Estate tax due ==
Less Tax Credit
==== Estate tax paid
You also need to know what value to use for purposes of determining
Estate Tax
What is the nature of Estate tax? == tax on the privilege to transfer
property upon death
What is zonal value? = the PH is divided into zones, and depending on
which zone, value different
FMV price which it will bring when it is offered for sale by one who
desire, but is not obliged to sslfng;lkasfjgl;kafsgj;lakfsgja;fdlsjg CASE
DIGEST
In terms of practicality, its not a good idea to have your estate being
composed of mostly life policies