Estate Tax Obligations for Surviving Spouses in the Philippines

(Philippine law; updated to the TRAIN Law framework. Practical, but not a substitute for advice from your lawyer or accountant.)

1) What the estate tax is—and why the surviving spouse cares

Estate tax is a transfer tax on the privilege of transmitting a decedent’s property at death. In the Philippines, the estate (not the heir) is the taxpayer, but someone must file, substantiate, and pay—usually the executor/administrator, or any heir if there is none. A surviving spouse often leads the process because (a) marital property must be liquidated to separate the spouse’s own share, and (b) many assets (titles, bank accounts, shares, vehicles) cannot be transferred without the BIR’s electronic Certificate Authorizing Registration (eCAR).

Key headline rules under the TRAIN Law (RA 10963):

Single 6% estate tax rate on the net taxable estate.
Standard deduction: ₱5,000,000 (for citizens/residents).
Family home deduction: up to ₱10,000,000 (subject to conditions).
Many small and moderate estates end up with little or no tax once the spouse’s share, the standard deduction, and (where applicable) the family home deduction are applied.

2) Who must file and who is liable

Primary duty to file/pay: the executor or administrator. If none, any heir (including the surviving spouse) may file.
Solidary liability of transferees: heirs (including the surviving spouse) can be made solidarily liable up to the value of what they received if estate assets are distributed before taxes are fully paid.
Banks, registries, and transfer agents will refuse transfers without an eCAR, effectively enforcing compliance.

3) Filing deadline, extensions, and installments

Estate Tax Return (BIR Form 1801) is due within 1 year from death.
The Commissioner may grant:
- Extension to pay: up to 5 years (judicial settlement) or 2 years (extrajudicial), for meritorious cases; may require a bond.
- Installments: allowed if arranged on or before the original due date or the approved extended date; interest applies if late.
Pro tip for spouses: Apply early if liquidity is an issue; don’t wait for the last month.

4) What goes into the gross estate

Include all property owned by the decedent at death, wherever situated (for citizens/residents). Typical items:

Real property (land, house/condo), whether exclusive or part of the marital property.
Personal property: vehicles, jewelry, artworks, appliances.
Financial assets: bank deposits (local/foreign), time deposits, investment accounts, listed and unlisted shares, unit investments, bonds, crypto/digital assets (document and value them).
Business interests: sole proprietorship assets, partnership interests, closely-held company shares (use book value/valuation rules).
Life insurance proceeds: included if the beneficiary is the estate, executor/administrator, or if the designation is revocable. Excluded if the beneficiary is irrevocably designated.
Transfers in contemplation of death and revocable transfers are generally pulled back into the estate.

Citizens/residents: worldwide assets are included, with a foreign estate tax credit potentially available (subject to limits). Nonresident aliens: include only Philippine-situated property; the list has special rules for intangibles (see §10).

5) Marital property regimes and the “share of the surviving spouse”

Your property regime determines how much of the mass of marital property belongs to the surviving spouse before computing estate tax on the decedent’s share:

Absolute Community of Property (ACP) (default for marriages under the Family Code unless agreed otherwise): generally, most property acquired during the marriage belongs to the community. Upon dissolution, split 50-50 after settling community obligations.
Conjugal Partnership of Gains (CPG) (common for marriages before Aug 3, 1988, or when stipulated): property acquired by onerous title and the fruits/income during the marriage become conjugal; exclusive properties remain separate. The net conjugal gains are generally split 50-50.
Complete separation of property: each spouse keeps their own; only the decedent’s properties enter the estate.

Tax effect: The “share of the surviving spouse” (usually 50% of the net community/conjugal property) is deducted in computing the net estate. This is in addition to the standard and family home deductions.

6) Allowable deductions (citizens/residents)

Common deductions you should know and document:

Standard deduction: ₱5,000,000 (no substantiation beyond death certificate and return).
Family home deduction: up to ₱10,000,000, provided the property was the decedent’s actual principal residence, forms part of the gross estate, and you can substantiate ownership/occupancy (e.g., title, tax declaration, barangay certification, utility records).
Claims against the estate & unpaid mortgages: valid, legally enforceable debts existing at death. Expect to show notarized debt instruments, lender identification/TIN, and (if contracted near death) proof of how proceeds were used.
Losses arising from casualty/theft during estate settlement (strictly conditioned).
Transfers for public use (property or cash actually transferred to the government/public use).
Vanishing deduction (a.k.a. property previously taxed): if property came from a prior decedent/donor and was taxed within 5 years, a diminishing deduction may apply (100% if within 1 year prior to current decedent’s death, then 80%/60%/40%/20% for each subsequent year).
Share of the surviving spouse (see §5): 50% of the net marital property under ACP/CPG is deducted.

What went away under TRAIN: the old medical and funeral caps were removed and effectively replaced by the higher standard deduction and family home deduction. Administration/judicial expenses: generally deductible when necessary and actually incurred for estate settlement (keep official receipts and court documents).

7) Special bank-deposit rules (important for spouses)

Bank withdrawals after death: Banks may allow withdrawals from the decedent’s accounts subject to 6% withholding on the amount withdrawn. The withheld amount is creditable against the final estate tax due (not a separate tax).
Joint accounts (e.g., “and/or”): by practice, 50% is presumed to belong to the decedent unless you can prove otherwise (e.g., source of funds). Expect banks to require the eCAR for retitling/closure.
Do not distribute balances informally. Keep a clear estate ledger so the withheld 6% can be properly credited when you file.

8) Valuation rules (how to price assets at death)

General rule: Fair market value as of the date of death.
Real property: use the higher of (a) BIR zonal value or (b) local assessor’s fair market value (on the tax declaration) at death.
Listed shares: closing price on the date of death.
Unlisted shares: book value from the company’s latest available financials closest to the date of death; special rules for preferred shares.
Bank deposits: principal plus accrued interest up to the date of death.
Crypto/foreign assets: preserve date-of-death snapshots and exchange-rate evidence.

9) Nonresident aliens and reciprocity on intangibles

Gross estate includes only Philippine-situated property.
Standard deduction for nonresident aliens: historically ₱500,000 (different from the ₱5M for citizens/residents).
Other itemized deductions (claims, losses, etc.) are generally pro-rated: Philippine-situs gross estate divided by worldwide gross estate.
Intangibles reciprocity: Shares, bank deposits, and similar intangibles in the Philippines owned by a nonresident alien may be exempt if their home country does not impose estate/inheritance tax on similar intangibles of nonresidents or grants reciprocal exemption to Filipinos. You must prove the foreign law (e.g., certified law/opinion).

10) Estate Tax Amnesty (context the spouse should know)

Congress enacted an Estate Tax Amnesty (RA 11213, extended by later laws), with extended coverage and availment periods in subsequent amendments. As of the last major extension known at the time of writing, availment ran through 14 June 2025 and coverage expanded compared with earlier iterations. If you are evaluating older, unsettled estates, study whether amnesty rules (rates, penalties relief, coverage cut-off dates) apply. (Dates and coverage can change; confirm the current BIR issuances.)

11) The eCAR—and why nothing moves without it

The electronic Certificate Authorizing Registration (eCAR) is the BIR’s clearance that estate taxes for listed assets are paid. You typically need one eCAR per asset (e.g., per land title, per condo, per block of shares). Government offices—Register of Deeds, LTO, stock transfer agents, banks—generally won’t retitle/transfer without the corresponding eCAR.

12) Paperwork the surviving spouse should prepare (typical)

ETR (BIR Form 1801), signed by the executor/administrator or heir.
Death certificate.
Marriage certificate and, if relevant, marriage settlements (to prove ACP/CPG/separation).
Proof of title/ownership (TCT/CCT/Stock certificates/ORCR for vehicles).
Valuation documents: latest tax declarations, zonal value certification, broker/transfer agent certifications, bank certificates stating balances at death, company audited FS for unlisted shares.
Debts/claims: notarized loan documents, statements of account, proof of use of proceeds if required.
Family home proof: barangay certification, IDs/utility bills showing occupancy; title/tax dec in the decedent’s or spouses’ names.
Computation schedules and asset-by-asset list (exclusive vs. conjugal).

13) Penalties, interest, and enforcement levers

Surcharge: generally 25% for late filing/payment; 50% in cases of willful neglect or fraud.
Interest: double the legal interest rate (historically 12% p.a., but this follows the prevailing legal rate).
Enforcement: No eCAR, no transfers. Banks withhold on withdrawals. Heirs who received property can be pursued up to the value they received.

14) Practical workflow for a surviving spouse

Secure the death certificate and freeze the paper trail (inventory assets/liabilities).
Identify the property regime (ACP/CPG/separation).
Open an estate TIN and, if useful, an estate bank account.
Gather valuations as of the date of death (realty, shares, deposits).
Compute the spouse’s share in marital property; prepare deduction support (standard, family home, claims).
Decide settlement route: extrajudicial (if no will, no minor heirs, no debts—or debts settled/assumed) or judicial.
File BIR Form 1801 within 1 year; request installments/extension early if needed.
Pay, secure eCARs, then complete retitling (Register of Deeds/LTO/transfer agents/banks).
Keep an audit file (receipts, valuations, bank 6% withholding slips) in case of post-review.

15) Worked example (numbers kept round for clarity)

Facts

Married under ACP.
Community assets at death:
- Family home (FMV) = ₱12,000,000
- Rental condo (FMV) = ₱15,000,000
- Bank deposits = ₱2,000,000
- Total community: ₱29,000,000
Community debt (mortgage on condo): ₱4,000,000
Decedent’s exclusive property: Inherited land = ₱5,000,000
Assume citizen/resident; all assets in PH.

Computation (common BIR presentation):

Gross estate (list 100% of assets): ₱29,000,000 (community) + ₱5,000,000 (exclusive) = ₱34,000,000
Deductions:
- Claims/mortgage: ₱4,000,000 → interim balance ₱30,000,000
- Standard deduction: ₱5,000,000 → ₱25,000,000
- Family home deduction: min{₱12,000,000, cap ₱10,000,000} = ₱10,000,000 → ₱15,000,000
- Share of surviving spouse: first net the community: ₱29,000,000 − ₱4,000,000 = ₱25,000,000; spouse’s 50% = ₱12,500,000 → Net taxable estate = ₱15,000,000 − ₱12,500,000 = ₱2,500,000
Estate tax @ 6%: ₱150,000

Note how the spouse’s share, the ₱5M standard deduction, and the ₱10M family home deduction dramatically reduce the taxable base.

16) Frequent pitfalls (especially relevant to spouses)

Mixing exclusive and community assets (e.g., inherited property is exclusive unless converted; don’t assume everything is 50-50).
Missing valuation dates (must be as of death, not the date you file).
Under-documenting debts (unsupported loans are disallowed).
Forgetting the bank 6% withholding credit (keep the bank’s certificate; apply it in your return).
Skipping the family home deduction for titles in one spouse’s name only (it can still qualify if it was truly the decedent’s principal residence and forms part of the estate).
Transferring or selling before eCAR (registries/agents won’t complete the transfer; you risk penalties).
Ignoring foreign assets (citizens/residents: worldwide reporting; consider foreign tax credits).
Letting the 1-year filing period lapse without requesting extension/installments.

17) Quick answers (FAQ-style)

Do I, as surviving spouse, pay estate tax on “my half”? No. Your own half of the net community/conjugal property is not part of the decedent’s taxable estate; it is a deduction.
Is there still a “notice of death” to BIR? The TRAIN regime removed the old “notice of death” requirement; you focus on filing the estate tax return with attachments within 1 year.
Can the family home deduction exceed the amount of the family home that’s actually in the gross estate? No. It’s capped at ₱10M and cannot exceed the value included in the gross estate.
What if the estate has no cash? Apply early for installments/extension, consider partial asset sales under court supervision, and use the bank-withheld 6% credits.
Do nonresident aliens get the ₱5M standard deduction? No; historically ₱500,000 for nonresident aliens, and most other deductions are pro-rated.

18) Bottom line for surviving spouses

Identify the regime (ACP/CPG/separation) and carve out your share first.
Document the big three: standard deduction, family home, claims/mortgages.
File within a year, or secure extensions/installments if necessary.
Do not distribute until eCARs are issued.
For older, unsettled estates, check whether an Amnesty applies (coverage and deadlines are time-sensitive).

Laws and BIR rules evolve. If your situation straddles unusual facts (foreign assets, complex businesses, mixed marital regimes, minors, or a contested will), working with counsel and a tax professional will save time and prevent costly do-overs.