This article provides a comprehensive, practice-oriented guide to Philippine estate tax—what’s taxed, the documentary requirements, where and when to file, how to value assets, available deductions/credits, and the workflow from death to transfer of title. It reflects the National Internal Revenue Code (NIRC), as amended (notably by the TRAIN Law), and standard Bureau of Internal Revenue (BIR) practice.

I. Legal Framework & Core Concepts

Estate tax is a transfer tax on the privilege of transmitting a decedent’s estate to the heirs. It is imposed on the net estate of the decedent at a flat six percent (6%) rate.

Who is taxed
- Resident citizens / resident aliens: worldwide gross estate.
- Nonresident citizens / nonresident aliens: Philippine-situs property only; special reciprocity rules apply to certain intangibles owned by nonresident aliens.
Taxable event & valuation date: Death; assets are valued as of the date of death (no alternate valuation date).
Who files: The executor or administrator; if none, any heir may file.
Where to file: The RDO (Revenue District Office) having jurisdiction over the decedent’s domicile at death. For nonresidents with no executor/administrator in the Philippines, filing is typically centralized with the competent RDO designated by the BIR for nonresidents.
When to file/pay: Within one (1) year from death.
- Extension to file: The Commissioner may grant a reasonable extension for meritorious cases.
- Extension/Installments to pay: The Commissioner may allow extension of time to pay (up to 5 years if under judicial settlement; up to 2 years if extrajudicial) and installment payment; interest/surcharges may be relieved as provided when conditions are met.

II. Scope of the Gross Estate

Include at date-of-death value:

Real property (land/condominiums/buildings) wherever situated (subject to residency rule).
Tangible personal property (vehicles, jewelry, art, equipment).
Intangibles (bank deposits, stocks, bonds, receivables, interests in partnerships/companies, beneficial interests in trusts).
- Situs for intangibles (nonresident aliens): Philippine-situs intangibles are generally taxable unless the decedent’s home country grants reciprocity (exempts similar property of Filipinos or imposes no estate tax on such intangibles).
Transfers in contemplation of death / revocable transfers / property passing under a general power of appointment (anti-avoidance inclusions).
Proceeds of life insurance if the estate/executor/administrator is the beneficiary, or the beneficiary designation is revocable. If the beneficiary is irrevocably designated and is not the estate, proceeds are excluded.

III. Valuation Rules

Real property: Higher of BIR zonal value or Fair Market Value (FMV) per the local assessor’s tax declaration on the date of death.
Listed shares: Mean between highest and lowest quoted selling prices on the date of death (or nearest trading day if no trading).
Unlisted common shares: Book value based on the latest audited/available financial statements nearest the date of death; exclude appraisal surplus.
Unlisted preferred shares: Par value, unless otherwise provided by regulation.
Government securities, bonds, mutual funds, UITFs: use redemption/Net Asset Value as of date of death.
Bank deposits/foreign currency accounts: principal plus accrued interest up to date of death.
Jewelry/artworks/unique assets: professional appraisal is recommended; maintain appraisal report.

IV. Deductions from the Gross Estate

The TRAIN Law simplified deductions and increased thresholds:

Standard deduction (Residents): ₱5,000,000 (no substantiation beyond proof of death and residency). Nonresident aliens: ₱500,000 standard deduction.
Family home deduction (Residents): up to ₱10,000,000 of the family home’s value, provided it formed part of the decedent’s estate.
Claims against the estate (debts): Valid, existing, enforceable personal obligations of the decedent incurred in good faith before death; must be properly substantiated (e.g., notarized loan documents, lender certifications, proof of application of proceeds). For loans secured by real property, present the annotated title and instrument.
Claims against insolvent persons and unpaid mortgages on included property (to the extent not already netted in valuation).
Losses arising from casualty/theft not compensated by insurance, if occurring during settlement and before the due date for filing; strict substantiation and timing rules apply.
Transfers for public use (e.g., donations to the government or qualified institutions effective at death).
Property previously taxed (vanishing deduction): For property received by the decedent from a prior decedent within five years and previously subjected to donor’s or estate tax; the deduction is graduated depending on the interval since prior transfer.
Share of the surviving spouse: In conjugal/community regimes, determine the gross conjugal/community estate, deduct the surviving spouse’s net share to arrive at the decedent’s exclusive/net share before other deductions.

Removed itemized deductions: TRAIN abolished the old funeral and medical expense deductions; these are now absorbed by the standard deduction.

V. Credits and Special Rules

Foreign estate tax credit: For citizen/resident decedents on foreign-sourced property, foreign estate taxes paid may be credited, subject to per-country and overall limitations.
Final withholding on bank withdrawals after death: Banks may allow withdrawals from the decedent’s accounts subject to a 6% final withholding on the amount withdrawn within one year from death, creditable against the estate tax due (coordinate with the RDO to claim the credit in the return).
Tax amnesty (historical): The Estate Tax Amnesty law covered delinquent and past-due estates for deaths on or before 31 December 2021, with applications extended by subsequent legislation through 14 June 2025. (Check current availability before relying on amnesty; outside that window, regular rules apply.)

VI. Compliance Workflow (From Death to Title Transfer)

A. Preparatory Steps

Secure civil registry documents
- PSA/Local Civil Registrar death certificate (several copies).
- Marriage certificate (if applicable).
- Birth certificates of compulsory heirs.
Open the estate for tax purposes
- Apply for an Estate TIN using BIR Form 1904 and secure the estate’s registration (BIR Certificate of Registration).
Inventory & valuation file
- Real property: latest tax declarations, certified true copies of titles (TCT/CCT), and zonal value printouts.
- Bank/deposits: bank certifications showing balances and accrued interest as of date of death and any post-death withdrawals/withholding.
- Securities: stock certificates, broker/transfer agent certifications, board lot quotations/market prices on death date, FS for unlisted shares.
- Vehicles: LTO CR/OR and valuation.
- Businesses: partnership agreements, capital accounts, latest FS.
- Insurance policies: policy documents; certification whether beneficiary designation is irrevocable.
- Debts/claims: notarized loan docs, schedules of unpaid principal and interest to date of death, proof of proceeds and consideration.
- Other assets/unique items: appraisals, photos, contracts.

B. Filing the Return (BIR Form 1801)

Complete and file BIR Form 1801 (Estate Tax Return) via eBIRForms (or as otherwise allowed by the RDO). Attach the Computation Sheets and Inventory.
Deadline: within 1 year from death (note extensions/instalments may be granted on meritorious grounds—apply before the due date).
Payment: Pay the estate tax and any documentary stamp tax that may be incidentally due on instruments executed during settlement (e.g., extrajudicial settlement deed), through Authorized Agent Banks/ePayment channels. If installment is approved, comply with the BIR installment schedule and security (if any).

C. Post-Payment: eCAR and Transfers

eCAR application (Electronic Certificate Authorizing Registration)
- One eCAR per property class and per RDO (e.g., a separate eCAR for each real property, and a separate eCAR for a block of shares). Submit the paid return, proof of payment, and document set specific to each property.
Title transfers
- Real property: Present eCAR to Registry of Deeds; update Tax Declaration at the Assessor; settle any Real Property Tax arrears/clearances. If transfer is by extrajudicial settlement, ensure compliance with Rule 74 (publication for 3 consecutive weeks, bond if personal property is involved, and affidavits).
- Shares of stock: Present eCAR to the corporate secretary/transfer agent; issue new certificates to heirs; pay any documentary stamp tax as applicable on the issuance/transfer documents.
- Vehicles: Present eCAR to LTO for transfer of registration.
- Bank accounts: Present eCAR and bank requirements for release/retitling or closure.

VII. Documentary Checklist (Typical; tailor to the estate)

General

BIR Form 1801 (filed) and payment proof (e.g., eFPS/eBIRForms confirmation + bank payment slip).
Estate TIN registration (Form 1904) and BIR Certificate of Registration.
Death certificate (PSA/LCR).
IDs of heirs/executor and SPA if represented.
Affidavit of Self-Adjudication / Deed of Extrajudicial Settlement / Court Order (if judicial).
Inventory of Assets & Liabilities with valuation basis.
Proof of relationship (marriage/birth certificates).

Per Asset Class

Real property: Certified true copy of TCT/CCT, latest Tax Declaration (land & improvement), Real Property Tax clearance/OR, zonal value printout.
Bank deposits: Bank certification of balances and interest as of death; statement of post-death withdrawals and any 6% FWT; bank’s freeze-lifting requirements.
Listed shares: Broker certificate of holdings and market quotations on date of death.
Unlisted shares: Corporate secretary certification of shares, latest FS, book value computation.
Vehicles: CR/OR, valuation, deed/order of distribution.
Insurance: Policy and beneficiary certification (irrevocable vs revocable/estate).
Debts: Notarized loan agreements, promissory notes, mortgage documents and annotations, lender certifications, proof of consideration.

Deductions/Claims Evidence

Standard deduction: basic identity/residency documents.
Family home: proof of use as family home (e.g., IDs, utility bills) and valuation up to ₱10,000,000.
Claims against estate: substantiation of indebtedness (see above), proof of application of loan proceeds.
Vanishing deduction: proof of prior taxed transfer and tax payment; computation schedule.
Losses: police/insurer reports, evidence of occurrence and noncompensation.

For Nonresident Decedents

Proof of nonresidency and citizenship at death.
List of Philippine-situs properties with valuations.
Reciprocity proof (for intangible exemptions), typically via foreign law certification/authority ruling.

VIII. Computation Outline

Gross Estate (by asset class, at date-of-death values).
Less: Deductions
- Standard deduction (₱5,000,000 for residents; ₱500,000 for nonresident aliens).
- Family home (up to ₱10,000,000; residents).
- Claims, mortgages, losses, transfers for public use, vanishing deduction.
- Surviving spouse’s net share (for conjugal/community regimes).
= Net Taxable Estate
× 6%
Less: Credits
- Foreign estate tax credit (if applicable).
- 6% bank final withholding on post-death withdrawals (creditable).
= Estate Tax Payable

Tip: Prepare a working paper detailing per-asset valuation basis (zonal vs assessor vs market), debt substantiation, and deduction qualifications; this eases BIR review and eCAR issuance.

IX. Common Practical Issues & Pitfalls

Late filing/payment: Triggers 25% surcharge (50% for willful neglect/false return) plus interest and compromise penalties. If cash flow is the issue, apply early for installment/extension.
Undersubstantiated debts: Loans without notarized documents, missing proof of consideration, or family loans lacking documentation are commonly disallowed.
Family home claim: Fails when the property was no longer used as family home at death, or when claimed over ₱10M.
Unlisted share valuations: Use book value from the latest FS nearest death; coordinate with the corporation to obtain timely FS and certifications.
Reciprocity for intangibles (nonresident aliens): Requires proof of foreign law (e.g., apostilled/legalized certification); absence leads to taxation in the Philippines.
Multiple RDOs and fragmented eCARs: Plan early which RDO handles each eCAR. Real properties located in different jurisdictions can complicate processing.
Notice of Death: Formerly required; now abolished—but do keep prompt documentation and estate registration.

X. Extrajudicial vs. Judicial Settlement (Interaction with Tax)

Extrajudicial settlement (EJS): Permitted when there is no will and no minor/incapacitated heir (or if represented with court approval). Requires a notarized deed, publication for three consecutive weeks, and a bond if personal property is involved (per Rule 74). BIR accepts an EJS (or Affidavit of Self-Adjudication for a sole heir) as basis for eCAR issuance, subject to tax payment.
Judicial settlement / probate: File the estate tax even while the case is pending; you may request extension to pay (up to 5 years). The court order of partition will then be used with the eCAR to transfer titles.

XI. Step-By-Step Timeline (Practical Playbook)

Weeks 1–4: Secure death certificate & heir documents; open estate TIN (Form 1904); begin full inventory; send bank and corporate requests for certifications; gather valuations.
Months 2–6: Finalize valuations; compute gross estate; determine deductions (standard/family home/debts/others); prepare Form 1801 with attachments; draft EJS/ASA or note pending probate.
By Month 12 (or earlier): File and pay (or secure installment/extension approval).
Post-payment (4–12 weeks typical): Apply for eCARs; once released, proceed to Registry of Deeds / LTO / transfer agent / banks to retitle/release assets.
Close-out: Update assessor records; distribute assets per EJS/court order; keep a permanent file of the estate tax return, eCARs, receipts, and transfer proofs.

XII. Recordkeeping & Audit Readiness

Maintain a binder (physical or digital) containing:

Master checklist and timeline.
Copies of all IDs, certificates, TIN registration.
Valuation basis worksheets and third-party certifications.
Debt substantiation and flow of funds proof.
Filed Form 1801, acknowledgments, and proof of payments.
eCARs and all transfer documents/receipts.
Communication logs with banks, brokers, RDOs, and registries.

XIII. FAQs (Practitioner Notes)

Is there capital gains tax on transfers at death? No; transmission at death is subject to estate tax, not CGT. But you’ll still deal with DST and registry fees on certain instruments.
Can we distribute assets before paying estate tax? As a rule, no—registries/banks require eCAR (or applicable BIR clearance) to transfer/release.
What if there’s only a small bank account and no other assets? You still file Form 1801, but the standard deduction often eliminates tax due; obtain eCAR to close/withdraw funds without issues.
What if the decedent had foreign assets? Include them (if resident/citizen), claim foreign tax credit with proof of payment, and attach certified translations where needed.

XIV. Bottom Line

Start early, document everything, and treat the return as a project plan: open the estate TIN, complete valuations, substantiate deductions, file Form 1801 within a year (or secure extensions/installments), pay, then obtain eCARs to retitle. Doing each piece thoroughly minimizes BIR queries and speeds up the release and transfer of the estate’s assets to the rightful heirs.