Transfer Tax
Chapter 1
Succession and Transfer Taxes
The modes and mechanics of acquiring ownership and other real rights over property are fairly complex. One can gain, transfer and lose ownership on a number of ways. Under the New Civil Code (NCC), ownership may be acquired through: 1. 2. 3. 4. 5. 6. 7. 8. Occupation Intellectual creation Law Donation Tradition Contract Prescription Succession
Art. 712 (New Civil Code): “Ownership is acquired by occupation and by intellectual creation. Ownership and other real rights over property are acquired and transmitted by law, by donation, by testate and intestate succession, and in consequence of certain contracts, by tradition. They may also be acquired by means of prescription”.
Transfer Taxes and Succession Defined
Transfer taxes are taxes imposed upon the gratuitous disposition of private properties or rights. Gratuitous transfer is one that neither imposes burden nor requires consideration from transferee or recipient. The transfer of ownership is free because of the absence of financial consideration. Hence, gratuitous transfers are essentially donations. The reverse side of gratuitous transfer is onerous, one where the transferee gives consideration in return for the property or right(s) received. However, onerous transfers
1
are subject to business taxes instead of transfer taxes. discussed in chapters 7 to 11 of this book.
Succession and Transfer Taxes
Gratuitous transfer or donation may take effect at the time of death of the donor or during the lifetime of both the donor and the donee. The former is known as “donation mortis causa” subject to estate tax while the latter is known as “donation inter vivos” subject to donor’s tax. Consequently, transfer taxes, which are typically assessed on the net value of the taxable assets transferred, fall into two basic categories, namely; estate tax and donor’s tax.
Business taxes are
Succession is a mode of acquisition by virtue of which, the property,
Succession and Transfer Taxes
The modes and mechanics of acquiring ownership and other real rights over property are fairly complex. One can gain, transfer and lose ownership on a number of ways. Under the New Civil Code (NCC), ownership may be acquired through: 1. 2. 3. 4. 5. 6. 7. 8. Occupation Intellectual creation Law Donation Tradition Contract Prescription Succession
Art. 712 (New Civil Code): “Ownership is acquired by occupation and by intellectual creation. Ownership and other real rights over property are acquired and transmitted by law, by donation, by testate and intestate succession, and in consequence of certain contracts, by tradition. They may also be acquired by means of prescription”.
Transfer Taxes and Succession Defined
Transfer taxes are taxes imposed upon the gratuitous disposition of private properties or rights. Gratuitous transfer is one that neither imposes burden nor requires consideration from transferee or recipient. The transfer of ownership is free because of the absence of financial consideration. Hence, gratuitous transfers are essentially donations. The reverse side of gratuitous transfer is onerous, one where the transferee gives consideration in return for the property or right(s) received. However, onerous transfers
1
are subject to business taxes instead of transfer taxes. discussed in chapters 7 to 11 of this book.
Succession and Transfer Taxes
Gratuitous transfer or donation may take effect at the time of death of the donor or during the lifetime of both the donor and the donee. The former is known as “donation mortis causa” subject to estate tax while the latter is known as “donation inter vivos” subject to donor’s tax. Consequently, transfer taxes, which are typically assessed on the net value of the taxable assets transferred, fall into two basic categories, namely; estate tax and donor’s tax.
Business taxes are
Succession is a mode of acquisition by virtue of which, the property,