In the wake of a spouse's passing, the surviving spouse is often thrust into a complex web of legal and administrative obligations. Among the most critical—and time-sensitive—is the settlement of the decedent's estate tax. Under the National Internal Revenue Code (NIRC) of 1997, as amended by the TRAIN Law (Republic Act No. 10963), the surviving spouse typically assumes the role of the primary administrator or executor responsible for compliance with the Bureau of Internal Revenue (BIR).

Failure to understand these requirements can lead to substantial surcharges, interest, and legal hurdles in transferring titles to heirs. This article outlines the essential legal framework for estate tax filing in the Philippine context.

1. The Taxable Event and Scope

Estate tax is not a tax on property, but rather an excise tax on the privilege of transmitting property at the time of death.

Gross Estate: For a married decedent, the gross estate includes the decedent's exclusive properties and their share in the conjugal or communal property.
Net Estate: The tax is computed based on the net estate, which is the gross estate minus allowable deductions (such as the Standard Deduction, claims against the estate, and the Family Home).

2. Mandatory Filing Requirements

Under the current TRAIN Law regime (for deaths occurring Jan 1, 2018, onwards), the filing requirements are as follows:

When to File: The Estate Tax Return (BIR Form 1801) must be filed within one (1) year from the decedent's death.
Extension: The Commissioner of Internal Revenue may, in meritorious cases, grant an extension of not more than thirty (30) days for filing the return.
Where to File: The return must be filed with the Authorized Agent Bank (AAB), Revenue District Officer (RDO), or Collection Officer having jurisdiction over the last residence of the decedent.

3. Notice of Death (Abolished)

It is important to note that the TRAIN Law abolished the requirement to file a "Notice of Death" within 2 months. The surviving spouse now focuses directly on the preparation of the return within the one-year window.

4. Required Documentation

The BIR requires a comprehensive set of documents to process the estate tax return and issue the Certificate Authorizing Registration (CAR), which is necessary to transfer property titles.

Mandatory Documents:
Certified true copy of the Death Certificate.
Taxpayer Identification Number (TIN) of the decedent and the heirs.
Affidavit of Self-Adjudication or Deed of Extrajudicial Settlement (if the estate is settled out of court) or a Court Order (if settled judicially).
Real Property: Certified true copy of the Transfer Certificate of Title (TCT) and a copy of the Tax Declaration at the time of death.
Personal Property: Certificates of Deposit, investment documents, or Certificates of Stocks.
CPA Certification: If the gross value of the estate exceeds ₱5,000,000, the estate tax return must be accompanied by a statement certified by an independent Certified Public Accountant.

5. Deductions Specific to Surviving Spouses

The law provides specific reliefs to prevent the immediate impoverishment of the surviving spouse:

Standard Deduction: A flat deduction of ₱5,000,000 is allowed without need for substantiation.
Family Home: If the family home was part of the conjugal property, the decedent's interest (up to ₱10,000,000) is deductible from the gross estate.
Share of Surviving Spouse: Before the tax is computed, the one-half (1/2) share of the surviving spouse in the conjugal/communal property is deducted from the gross estate, as this portion belongs to the spouse and is not being "transmitted" by death.

6. Payment of Tax

The general rule is "Pay-as-you-file." However, if the cash available in the estate is insufficient, the BIR may allow:

Payment by Installment: Spread over two (2) years from the statutory date of filing, without civil penalties or interest.
Partial Disposition of Estate: The BIR may allow the sale of certain estate assets to pay the tax liability.

7. Bank Account Withdrawals

Upon the death of a depositor, the surviving spouse may withdraw any amount from the decedent's bank account, provided the bank withholds a 6% final withholding tax. This provides immediate liquidity for funeral expenses or daily needs without waiting for the full settlement of the estate tax.

Conclusion

Navigating estate tax requirements requires meticulous record-keeping and a clear understanding of the one-year filing window. For surviving spouses, the priority should be the consolidation of titles and the accurate valuation of assets to ensure that the 6% estate tax rate is applied correctly, thereby securing the legal transition of the family’s heritage.