Estate Tax on Conjugal (Community) Property When One Spouse Dies

Philippine law in effect as of 12 June 2025

1. Governing Laws & Regulations

Source	Key Provisions
National Internal Revenue Code (NIRC), as amended by the TRAIN Law (R.A. 10963, eff. 1 Jan 2018)	§§ 84–97 (estate tax rate, gross/net estate, deductions, filing & payment)
Family Code of the Philippines (E.O. 209, 1987)	Arts. 74-102 (absolute community), 103-124 (conjugal partnership of gains), 147-148 (unions without valid marriage)
BIR Revenue Regulations (RR) Nos. 12-2018, 17-2023 & related issuances	Procedural rules, updated forms (BIR Form 1801), zonal values, penalties, eCAR issuance
Estate Tax Amnesty (R.A. 11213, amended by R.A. 11569 & R.A. 11956)	Covers estates of decedents who died ≤ 31 May 2022; availment until 14 June 2025

Note: The 2018 TRAIN Law collapsed the old graduated estate-tax schedule into a flat 6 % tax on the net estate, while significantly enlarging deductions.

2. Property Regimes & Their Effect on the Estate

Absolute Community of Property (ACP) – the default for marriages on/after 3 Aug 1988, absent a prenuptial agreement.
Conjugal Partnership of Gains (CPG) – default for marriages before 3 Aug 1988 when no ante-nuptial agreement; may also be chosen in a marriage settlement.
Separation of Property – if validly stipulated.
Unions without a valid marriage – co-ownership rules (Arts. 147-148).

Estate-tax rule: Only ½ of ACP/CPG property (the decedent’s “net share”) enters the gross estate. The other half belongs to (and remains with) the surviving spouse but must be disclosed in the return to show the split.

3. Building the Estate-Tax Return (BIR Form 1801)

Date of Death fixes:
- valuation of assets (fair market value, zonal value, BIR or assessor’s whichever is higher);
- one-year filing period (extendible on meritorious grounds).
Identify and list all assets—worldwide—exclusive to the decedent plus the common/conjugal pool (realty, personalty, investments, digital assets, claims).
Compute Conjugal Split Common asset FMV × 50 % → decedent’s share → included in gross estate.

4. Standard Flow of Computation

Step	Illustration (₱)
1. Gross estate (exclusive property + decedent’s ½ of community)	12,000,000
2. Less: Deductions
a. Standard deduction	– 5,000,000
b. Family home (max 10 M)	– 2,500,000
c. Funeral (≤ 200 k or 5 %)	– 200,000
d. Judicial expenses	– 300,000
e. Medical (≤ 500 k, 1 yr)	– 400,000
f. Claims vs. estate	– 600,000
g. Surviving-spouse’s share (net conjugal property still imputed)	– (see § 86(E))
3. Net taxable estate	3,000,000
4. Estate tax @ 6 %	₱ 180,000

Tax planners often trigger the large ₱ 5 M standard deduction first; the surviving-spouse share is in addition to deductions.

5. Filing & Payment Mechanics

Item	Rule	Key Notes
Who files	Executor, administrator, or any legal heir	Solidary liability if unpaid.
Where	BIR RDO where the decedent was domiciled; if none, where estate’s executor is	Register docket no.
When	Within one (1) year from date of death	Extension for filing and/or payment up to 5 yrs (judicial estates) or 2 yrs (extrajudicial) on verified hardship; interest applies.
Mode of payment	Cash, manager’s check, ePayment, or installment (≤ 2 yrs, secured by bond or estate property)	Installment allowed only if estate lacks liquidity.
Documents (core)	Death certificate, TINs of heirs, notarized declaration of heirs or court order, list & valuation sheets, proof of deductions, Certificate authorizing registration (CAR) for each real property	CAR required to lift BIR lien and register titles.

6. Penalties for Non-Compliance

Surcharge – 25 % of basic tax (50 % if willful).
Interest – 20 % p.a. (or prevailing rate) on unpaid amount.
Compromise – possible, subject to BIR guidelines.
Titles cannot be transferred; banks may freeze accounts pending eCAR.

7. Estate Tax Amnesty (Quick Recap)

Applies to estates of decedents who died on or before 31 May 2022.
Flat rate: 6 % of net undeclared estate or minimum ₱ 5 K per estate.
Deadline: filings must be received by BIR on or before 14 June 2025.
Benefits: no penalties, no interest, immunity from civil/criminal prosecution under the NIRC for the covered estate.
Does not cover subsequently acquired or discovered assets.

8. Settlement Pathways

Judicial Settlement – Petition for issuance of letters testamentary/administration (Rule 73–90, Rules of Court).
Extrajudicial Settlement (EJS) under Rule 74: allowed if
- no will OR will already probated,
- no outstanding debts, and
- all heirs are of age or duly represented. Requires publication and execution of a Deed of EJS with waiver of bond.
Partition by Donation / Causa Mortis Transfers – unequal shares may trigger donor’s tax on excess.

9. Common Practical Pitfalls

Pitfall	How to Avoid
Treating the whole conjugal/community pool as taxable	Always segregate the surviving spouse’s 50 %.
Under- or over-stating zonal values	Obtain updated zonal schedules; attach assessor’s certifications.
Over-claiming deductions (e.g., funeral > P200 k)	Observe statutory caps; keep official receipts.
Missing the one-year deadline	File the return even without final values; amend later.
Freezing of bank deposits	Present BIR Form 1904 for estate TIN + BIR clearance request (RMC 62-2016).
Unequal distribution w/o donor’s-tax check	Secure tax-free partition ruling or pay donor’s tax on excess shares.

10. Recent Jurisprudence & BIR Rulings (Select)

Heirs of Malate v. BIR (CTA Case No. 10401, 2024) – clarifies that extension to pay estate tax requires a separate request from extension to file.
BIR Ruling DA-079-23 – cryptocurrency included in gross estate at FMV on blockchain snapshot date; surviving-spouse rule still applies if purchased with conjugal funds.
RMC 60-2023 – updated checklist for eCAR issuance; mandatory electronic submission of map overlays for real property.

(These illustrate current administrative thinking; always verify the latest issuances.)

11. Checklist for Heirs / Executors

Secure TIN for the estate (separate from decedent’s and heirs’).
Inventory all assets & liabilities within 60 days if possible.
Segregate conjugal/community vs. exclusive property.
Document valuations (zonal, fair-market, audited FS for businesses).
Compile deduction proofs (ORs, statements, medical bills, etc.).
Prepare BIR Form 1801 and attachments.
File & pay (or apply for installment/estate amnesty).
Obtain eCARs and pay transfer/registration & local taxes (transfer tax, doc-stamp, etc.).
Retitle assets (RPs, shares, vehicles, domain names).
Keep records for at least ten (10) years (Sec. 235, NIRC).

Key Take-Aways

Only the decedent’s 50 % share of conjugal/community property is taxable.
The flat 6 % estate-tax rate plus generous deductions mean most middle-class estates incur little or no tax—if filings are timely.
Failure to file within one year unlocks hefty surcharges, and heirs cannot dispose of real or personal property without BIR clearance.
The estate-tax amnesty window closes on 14 June 2025; after that, regular estate tax plus penalties revive.
Early, accurate valuation and segregation of conjugal shares are crucial to avoid disputes and penalties.

Disclaimer: This article is for general information only and does not constitute legal or tax advice. Consult a Philippine lawyer or tax professional for advice on specific estates or circumstances.