Estate Tax Base When a Property Title Reads “Married To” and the Principal Owner Dies (Philippine Legal Context, updated to 18 June 2025)
1. Overview
In the Philippines, almost every Torrens title issued for property acquired during a valid marriage is worded along the lines of:
“TCT No. ____ – Juan Dela Cruz, married to Maria Reyes”
That seemingly harmless phrase—“married to”—has far-reaching consequences the moment Juan dies. It triggers (a) the succession rules of the Family Code and Civil Code, and (b) the estate-tax rules of the National Internal Revenue Code (NIRC) as amended by the TRAIN Law (Republic Act 10963) and subsequent regulations. The key question for heirs, examiners, and conveyancing lawyers is:
How much of the property showing only Juan’s name—but annotated “married to” Maria—actually enters Juan’s taxable estate?
This article consolidates all doctrinal, statutory, administrative, and practical points you must know.
2. Statutory Framework
| Subject | Governing Text | Key Sections |
|---|---|---|
| Family relations & property regimes | Family Code of the Philippines (E.O. 209, 1988) | Arts. 75-144 |
| Succession (rights to property upon death) | Civil Code (Book III) | Arts. 774-1105 |
| Estate taxation | NIRC of 1997 as amended by TRAIN | Secs. 84-97 |
| Implementing rules | BIR RR 12-2018, RMC 62-2018 & later clarifications | Various |
No single provision mentions “married to” in a title; the effect flows from the interaction of the Family Code’s property regime with the NIRC’s definition of gross and net estate.
3. Property Regime Determines the Taxable Share
3.1 Presumptive Regimes
Absolute Community of Property (ACP) Default for marriages after 3 Aug 1988 (effectivity of the Family Code) unless the spouses executed and registered a marriage settlement.
- All property acquired before and during the marriage—except those specifically excluded by law—is community.
- Each spouse owns an undivided ½ interest.
- Upon death of one spouse, only the decedent’s ½ enters the gross estate.
Conjugal Partnership of Gains (CPG) Default for marriages before 3 Aug 1988 that did not adopt ACP retroactively.
- Property acquired for a valuable consideration during marriage is conjugal; exclusive property remains separate.
- Again, only ½ of conjugal assets forms part of the decedent’s estate.
Separation of Property (Total or Partial)
- Must be established by a duly recorded pre-nup or a court-approved separation of property.
- If proven, the property titled solely to Juan (even if annotated “married to”) is 100 % Juan’s; the full value goes into the estate.
Practical rule: In BIR practice, an owner’s name followed by “married to” is treated as prima-facie evidence that the property is community/conjugal. The heirs can rebut this only by presenting the registered marriage settlement or final judicial order creating separation of property.
3.2 Exclusive vs. Community/Conjugal Assets
| Classification | Example | Enters Estate? |
|---|---|---|
| Exclusive (acquired before marriage or by gratuitous title, or by redemption/substitution for exclusives) | Land Juan inherited from his parents in 2000 | 100 % |
| Community/Conjugal: 50 % of value | House bought in 2010 using salaries | 50 % |
4. Computing the Estate-Tax Base
4.1 Step 1 – Identify and Segregate
List all properties under the decedent’s name (TCTs, CCTs, bank accounts, investments).
Mark which assets are:
- Exclusive (full entry)
- ½ share of community/conjugal (split entry)
For real property titled “Juan Dela Cruz married to Maria Reyes”, treat only ½ of fair market value (FMV) as gross-estate inclusion, unless a separation regime is proven.
4.2 Step 2 – Determine Gross Estate
Gross Estate = (Exclusive assets 100 %) + (Community/Conjugal assets 50 %) + (Proceeds of life insurance “payable to estate”) + (Includible transfers in contemplation of death) + (Other property interests)
4.3 Step 3 – Apply Allowable Deductions (TRAIN-era)
| Deduction | Cap / Mechanics (Jan 2018-present) |
|---|---|
| Standard deduction | PHP 5 million |
| Family home | Lower of FMV or PHP 10 million |
| Funeral expenses | 5 % of gross estate, max PHP 200 k |
| Medical expenses (incurred within 1 yr) | Max PHP 500 k |
| Claims against estate | Valid, enforceable debts substantiated |
| Allowable transfers to charitable institutions | 100 % deductible if qualified |
| Share of surviving spouse | Automatically removes other ½ of community property from computation (already done in Step 1) |
4.4 Step 4 – Net Estate and Tax Due
- Net Estate = Gross Estate − Deductions
- Estate-tax rate: 6 % flat (TRAIN)
- Estate Tax Due = 6 % × Net Estate
Estate tax must be paid within one (1) year from date of death; extensions require a BIR-approved installment plan or partial bond.
5. Procedural Highlights
| Requirement | Notes |
|---|---|
| BIR Form 1801 (Estate Tax Return) | File at RDO where decedent resided or where the property/estate administrator is registered. |
| TIN of Estate | Secure via eTIS; use in all estate-related filings. |
| Certified Copy of TCT/CCT | Submit to BIR; annotate “½ share belongs to decedent” in the asset schedule. |
| Extrajudicial Settlement (EJS) or Judicial Proceedings | Mandatory if heirs wish to transfer title; publish EJS for 3 consecutive weeks in a newspaper of general circulation and post bond if minors are involved. |
| Electronic Certificate Authorizing Registration (eCAR) | Issued by BIR per property after estate tax payment; present to Registry of Deeds for title transfer. |
| Real-Property Tax Clearance & Zonal Valuation | Attach to strengthen FMV declaration; BIR examiners cross-check. |
6. Jurisprudence and Administrative Rulings
| Citation | Gist |
|---|---|
| Spouses Abalos v. PNB, G.R. 158989 (5 Sep 2007) | Title in husband’s name but acquired during marriage is conjugal despite third-party lender’s claim. |
| Heirs of Malate v. Tan, G.R. 167133 (20 Jan 2016) | Conjugal nature must be established before levy; “married to” creates presumption. |
| BPI Family v. Heirs of Mañalac, G.R. 214264 (1 Feb 2023) | Reinforced good-faith buyer rule: third parties may rely on title stating “married to” but must still verify spousal consent. |
| BIR Ruling (BIR RMC 17-2022) | Clarified that for titles “Juan married to Maria”, the ½ share is removed before applying deductions. |
While case law usually arises in creditor or land-registration disputes, the same presumption guides BIR assessments.
7. Common Scenarios
| Scenario | Estate-tax treatment |
|---|---|
| 1. Title: “Juan Dela Cruz married to Maria Reyes” – Purchased 2015 – No pre-nup | ACP. Include 50 % of FMV. |
| 2. Title: “Juan Dela Cruz married to Maria Reyes” – Pre-nup recorded 2010 establishing separation of property | 100 % includible (exclusive). BIR will inspect pre-nup and its Registry entry. |
| 3. Title shows “Juan Dela Cruz” only, but tax declaration dates to 2012 marriage | Still presumed community if heirs/adverse party show acquisition during marriage; proof shifts to those contesting. |
| 4. Multiple properties, some inherited by Juan pre-marriage | Those properties are exclusive; show supporting deeds of partition/extra-judicial settlement of previous estate. |
8. Pitfalls and Practice Pointers
- Failure to segregate the surviving spouse’s share inflates the net estate, risking a 25 % surcharge plus 12 % interest p.a.
- Over-segregation (claiming more than 50 %) invites deficiency assessment—BIR may issue tax lien notices before eCAR release.
- Unrecorded pre-nups are ineffective against third parties and the BIR. Recording must be with the local civil registry and annotated on titles to defeat the community presumption.
- Documentation timing: File the estate-tax return first; then file the EJS with the Register of Deeds, attaching the eCAR.
- Pre-2021 estates may still avail of the Estate-Tax Amnesty (RA 11569, RR 17-2021) until 14 June 2025 for unpaid or under-paid estate taxes of decedents who died on or before 31 May 2022. This amnesty works after splitting community/joint assets—same “married to” rules apply.
9. Frequently Asked Questions
“The title shows only my late husband’s name—do I really own 50 %?” Yes, if the property was acquired during a marriage governed by ACP or CPG and no valid pre-nup says otherwise.
“Can I insist that the whole value be taxed because it’s simpler?” You may, but it is never recommended. You would waive your statutory share, pay higher taxes, and risk civil partition actions later.
“Does the BIR accept zonal value or assessed value?” BIR uses the highest of (a) zonal value, (b) assessed value times the assessment level, or (c) FMV in a duly executed deed of extrajudicial settlement. Use the same basis for both halves.
“We discovered a pre-nup after paying estate tax; can we get a refund?” Yes, file a claim for tax credit or refund within two (2) years from payment, attaching the newly discovered or registered pre-nup.
10. Conclusion
When the only name on the title is the decedent’s but a “married to” annotation appears, do not assume the entire property is subject to estate tax. Philippine law presumes the property belongs ½ to the surviving spouse and ½ to the decedent—unless a registered marriage settlement or a court order proves a different regime.
Correctly applying this rule:
- Shields the surviving spouse’s share from unnecessary taxation.
- Avoids penalties for under- or over-reporting.
- Smooths the issuance of BIR eCARs and the eventual retitling of property.
Keeping meticulous records of marriage settlements, titles, and acquisition dates long before death will spare families costly disputes and delays in the inevitable settlement of estates.