Estate Tax Amnesty and Extra-Judicial Settlement in the Philippines
(Comprehensive 2025 Guide for Heirs, Practitioners & Advisers)
1. Why These Two Topics Belong Together
Estate tax must be paid (or the amnesty availed of) before any Philippine property can legally be transferred to heirs. In practice, settlement of an estate therefore has two parallel tracks:
| Track | What it does | Key governing law |
|---|---|---|
| Estate-Tax Compliance / Amnesty | Cures all unpaid estate taxes, penalties & interest so titles can be re-issued | Tax Code (as amended by R.A. 10963), R.A. 11213 (Estate Tax Amnesty Act) as further amended by R.A. 11569 (2021) and R.A. 11956 (2023); BIR RRs 6-2019, 17-2021 & 6-2023 |
| Settlement of the Estate | Determines who gets what and effects the transfer | Rule 74, Rules of Court (Extra-Judicial Settlement or “EJS”); Civil Code on succession; special statutes on land, shares, bank deposits, etc. |
You may work on both tracks simultaneously, but the Bureau of Internal Revenue (BIR) will not issue the Certificate Authorizing Registration (CAR) until it is satisfied with the tax side.
PART I ESTATE TAX AMNESTY (2025 status)
2. Legislative Timeline & Coverage
| Date | Milestone | What changed |
|---|---|---|
| 14 Feb 2019 | R.A. 11213 signed | 2-year amnesty; covered estates of decedents who died ≤ 31 Dec 2017 |
| 28 Jun 2021 | R.A. 11569 | Availment period extended to 14 Jun 2023 |
| 5 Aug 2023 | R.A. 11956 | Availment period further extended to 14 Jun 2025 and cut-off for date of death moved to ≤ 31 May 2022 |
Bottom line (as of 29 Apr 2025):
You may still avail until 14 June 2025 for estates of persons who died on or before 31 May 2022.
3. Tax Computation Under the Amnesty
| Item | Rule |
|---|---|
| Tax rate | 6 % of the net estate at time of death (same flat rate as regular law) |
| Minimum amount | ₱ 5,000 if the net estate is zero or negative |
| Basis of valuation | Higher of (a) BIR zonal value, or (b) Prov./City Assessor’s FMV, as of date of death |
| Deductions | All ordinary & special deductions in the Tax Code still apply (standard ₱5 M, family home ₱10 M, vanishing deduction, etc.) |
| Penalties & interest | 100 % waived once amnesty tax is paid |
| Installments | Up to 2 years without interest, counted from the filing of the Estate Amnesty Return |
No open cases, assessments or tax evasion charges will be pursued once the CAR is issued.
4. Who Cannot Avail
- Estate with final and executory tax assessment (unless abated by BIR under other laws).
- Delinquent withholding agents (rare for estates).
- Properties under the Anti-Money Laundering Act “freeze” or recovery cases.
- Decedents who died after 31 May 2022.
Where an estate partially falls outside the cut-off (e.g., property acquired after death by the heirs), the amnesty applies only to assets existing at date of death.
5. Documentary Checklist (Typical)
| # | Document | Notes |
|---|---|---|
| 1 | Estate Amnesty Return (BIR Form 2118-EA) + 3 sets | Obtain TIN of the Estate first |
| 2 | Deed of Extra-Judicial Settlement or Court Order | Must be notarised; attach schedule of assets |
| 3 | Birth/Marriage certificates of heirs | PSA-authenticated |
| 4 | Death certificate of decedent | PSA |
| 5 | Certified true copy of titles / tax declarations / stock certificates | For each property |
| 6 | Estate computation worksheets & Statement of Assets and Liabilities | Optional but helps BIR examiners |
| 7 | Official receipts for filing fees and DST | DST of ₱15 per ₱1,000 of declared estate value still applies |
| 8 | If paying in installments: Promissory note & post-dated cheques |
File at the Revenue District Office (RDO) where the decedent was last domiciled; if abroad, where the executor/settlement is located.
6. Step-by-Step Availment
- Secure TIN of the estate (automatically issued at any RDO).
- Gather documents & compute net estate and 6 % tax.
- Pay through AAB/GCash/Landbank LinkBiz.
- File return with complete documents; obtain claim stub.
- Receive CAR (Form 1921) → present to Register of Deeds, company corporate secretary, bank, etc. for re-titling.
Processing time: 1–3 months in straightforward cases (longer for multiple RDOs or missing valuations).
PART II EXTRA-JUDICIAL SETTLEMENT (EJS)
7. Legal Basis & Requisites
| Requirement | Authority | Practical meaning |
|---|---|---|
| No will, or will not probated | Rule 74 § 1 | If a will exists, probate is mandatory; otherwise use EJS |
| No outstanding debts, or all debts paid | Rule 74 § 1 | Creditors may still sue within 2 years if concealed |
| All heirs are of legal age (or minors duly represented) | Rule 74 § 1 | Guardianship or court approval needed for minors |
| Estate not under court administration | Rule 74 §§ 1-2 | Once an estate case is filed, switch to judicial settlement |
If any requisite is missing, settlement must proceed judicially under Rules 73-90.
8. Two Modes of EJS
| Mode | When used | Publication? | Bond? |
|---|---|---|---|
| A. Deed of EJS / “Agreement Among Heirs” | Regular estates | Yes – once a week for 3 consecutive weeks in a newspaper of general circulation | None |
| B. Summary Settlement of Small Estates | Gross value ≤ ₱10,000 (still unchanged) | Notice posted in the municipality & adjudicating court order | Bond = value of estate |
In practice, Mode A is far more common because ₱10,000 has long been outdated.
9. Minimum Contents of a Deed of EJS
- Antecedents (name, citizenship, marital status, residence of decedent; date/place of death).
- Heirship clause (relationship to decedent; statement that they are the only heirs).
- Debt-free statement or list of debts already settled.
- Complete inventory:
- Real property: TCT/CCT No., Lot/Blk, location, area, assessed & market values.
- Personal property: bank balances, shares, vehicles (plate/VIN), jewellery, etc.
- Manner of partition (who gets what; equal vs. unequal; cash equalisation).
- Warranty & indemnity vs. hidden heirs/creditors.
- Signatures & notarisation.
Attach a “Project of Partition” map or sketch plan if subdividing a parcel of land.
10. Publication & Post-Publication Exposure
Failure to publish does not void the deed as between heirs, but it preserves a two-year window in which:
- (a) Unknown heirs may demand reconveyance;
- (b) Creditors may pursue heirs pro-rata to the value each heir received (Rule 74 § 4).
After two years, titles are conclusively presumed valid, absent fraud.
11. Registration & Transfer of Titles
| Property | Where to file | Documents |
|---|---|---|
| Land / Condo | Register of Deeds where property is located | CAR, original title, EJS deed, latest real-property tax clearance, HOA clearance (if any), transfer taxes OR |
| Shares of stock | Corporate Secretary | CAR + Deed; SEC’s 2019 Guidelines require annotation on stock & transfer books |
| Bank deposits | Bank branch | Deed + CAR + bank forms; 6% “final tax” on income earned after death still applies |
| Vehicles | Land Transportation Office | Deed + CAR + CR/OR |
Expect transfer taxes at the LGU (usually 0.5 % of FMV) apart from the BIR taxes.
PART III KEY STRATEGIC & PRACTICAL POINTS
- Settle debts first. Even a single unpaid credit-card bill disqualifies you from extra-judicial settlement until it is satisfied or waived.
- Consolidate valuations early. Obtaining zonal values and updated tax declarations can take weeks in rural RDOs or assessor’s offices.
- Heirs abroad can sign by apostilled SPA. The BIR accepts e-apostilles since 2023.
- Disputed family home? The first ₱10 million of the family home’s FMV is deductible before applying the 6 % rate. Allocate this deduction where it gives the biggest tax savings.
- Installments vs. quick clearance. While interest-free, installment filing means no CAR until the last instalment is paid—delaying any sale or mortgage of the property.
- Partial amnesty filing. You may declare only some properties now and file a supplemental estate return for newly discovered assets before 14 June 2025, still at 6 %.
- Judicial settlement may still be cheaper if heirs are hostile; publication + court approval of a compromise can protect you from later suits.
PART IV CONSEQUENCES OF NON-COMPLIANCE AFTER 14 JUNE 2025
| Scenario | Consequence |
|---|---|
| Estate tax return filed late, after amnesty lapses | 6 % basic tax plus 25 % surcharge & 20 % p.a. interest from the statutory due date (one year from death) |
| Deed of sale without CAR registered | Register of Deeds will refuse; bank loans will not proceed |
| Hidden assets discovered | BIR may assess at any time within 10 years from discovery; criminal tax fraud charges possible |
A bill to further extend or make the amnesty permanent is pending in Congress, but until enacted do not rely on it.
PART V CHECKLISTS AT A GLANCE
1. Pre-Filing Heir “To-Do” List
- Obtain PSA death certificate
- Secure TIN for the Estate
- Inventory assets & debts
- Gather valuation documents (zonal, assessor’s, bank balances)
- Draft & notarise Deed of EJS
- Pay debts; secure quitclaims from creditors
- Prepare estate tax computation worksheets
2. BIR Filing Day
- Three signed originals of BIR Form 2118-EA + attachments
- Payment confirmation / cheques
- Valid IDs & SPA for authorised representative
- Photocopies (at least 3) of everything for stamping
3. Post-CAR Titling
- Pay LGU transfer tax within 60 days of CAR release
- Present CAR & file EJS deed at Register of Deeds / Corporation
- Monitor issuance of new titles / stock certificates
- Publish notice of the EJS (if not already done)
PART VI FREQUENTLY ASKED QUESTIONS (FAQ)
| Question | Short Answer |
|---|---|
| Can I avail of the amnesty if a court-administered probate is already pending? | Yes. File a Motion to Avail of Estate Tax Amnesty; the court order plus Letters Testamentary substitutes for the EJS deed. |
| Is the 6 % amnesty rate applied before or after deductions? | After deductions; compute net estate first. |
| Do I still file the regular Estate Tax Return (BIR Form 1801)? | No; use 2118-EA. If you miss the amnesty, you revert to 1801. |
| Are digital assets (e-wallet, crypto) covered? | Yes, declare them as personal property. Zonal value is N/A; use FMV at date of death. |
| What if one heir refuses to sign the EJS? | You cannot proceed extra-judicially; file settlement proceedings in court under Rule 73. |
Final Thoughts
With the deadline of 14 June 2025 fast approaching, now is the optimal—and likely the last—window to:
- Clean up decades-old estates at a predictable 6 % cost, and
- Transfer titles quickly via extra-judicial settlement where the heirs are cooperative.
Both procedures are technical, but they need not be adversarial or exhausting. Timely planning, complete documentation, and professional guidance will spare the family exponential penalties—and preserve harmony—long after the amnesty clock runs out.
This article is for general information only and is not a substitute for tailored legal or tax advice. Consult a Philippine lawyer or accredited tax practitioner for your specific case.