Estate Tax Requirements After a Foreign Spouse’s Death in the Philippines

Philippine legal and tax context, explained end-to-end (general information; not legal advice).

1) First principles

The Philippines imposes an estate tax (not an inheritance tax). The taxpayer is the estate, and the tax is triggered at the moment of death.
For deaths on or after 1 January 2018, the estate tax rate is a flat 6% of the net taxable estate (after allowable deductions). (Older deaths follow the pre-2018 graduated rates and older deduction rules.)

2) Why the decedent’s status matters (citizen/resident vs non-resident alien)

For estate tax, “resident” means domiciled in the Philippines at death (a facts-and-circumstances test: habitual abode + intent to remain), and is separate from immigration or visa labels.

Citizen or resident (including a resident alien) → Worldwide assets are potentially taxable in the Philippines.
Non-resident alien (NRA) → Only Philippine-situs property is taxable here.

Tip: If the foreign spouse lived long-term in the Philippines (home here, family here, center of life here), expect the BIR to treat them as resident for estate-tax purposes—even if they held a foreign passport.

3) What goes into the gross estate

Include what the decedent owned or had interests in at the date of death:

Immovables in the Philippines: land, house/condo, buildings, improvements.
Movables: vehicles, jewelry, art, boats, etc.
Financial assets: bank deposits, time deposits, cash on hand, receivables, crypto held on Philippine exchanges (facts-and-circumstances), insurance with the estate/executor/administrator as beneficiary, retirement plan balances (check plan rules), business interests.
Shares of stock:
- In domestic corporations → Philippine-situs intangibles.
- In foreign corporations → situs depends on circumstances; for NRAs, reciprocity rules may exempt (see §6).

Special valuation rules (as of death):

Real property: use the higher of (a) BIR zonal value or (b) LGU assessor’s fair market value.
Listed shares: use the average of the highest and lowest trading prices on date of death.
Unlisted shares: generally net asset value from the most recent financials bracketing the death date (adjust for material changes).
Foreign currency assets: convert at the BSP reference rate on date of death.

4) Conjugal/community property & the surviving spouse’s share

Most marriages celebrated in/after 1988 default to Absolute Community of Property (ACP) unless there’s a valid marriage settlement (e.g., Separation of Property) or a pre-1988 Conjugal Partnership of Gains (CPG) applies.

Under ACP/CPG, only the decedent’s net half of community/conjugal property forms part of their gross estate.
The “net share of the surviving spouse” is deducted after computing deductions, before applying the 6% tax.

Note on foreign ownership limits: A foreigner cannot acquire land by purchase in the Philippines (constitutional restriction). That affects who actually owns certain assets—and therefore what enters the estate. (Condominiums are allowed subject to the 60/40 rule; shares and personal property are generally fine.) BIR follows legal ownership/beneficial interests recognized under Philippine law.

5) Deductions (to arrive at the net taxable estate)

The post-2018 rules simplified deductions. Key ones to know:

Standard deduction (no substantiation beyond identifying assets):
- ₱5,000,000 for citizens/residents (Filipino or resident alien).
- ₱500,000 for non-resident aliens (NRA).
Family home deduction: up to ₱10,000,000 of the family home’s value if the decedent was a citizen or resident at death and the home is part of the estate. (Not available to NRAs.)
Claims against the estate / unpaid mortgages: valid, notarized debts incurred in good faith for full consideration.
Casualty/theft losses: if occurring around death and not compensated by insurance.
Transfers for public use: property bequeathed to the national government or its agencies/instrumentalities.

NRAs: In addition to the ₱500,000 standard deduction, other deductions are typically prorated by a ratio of Philippine-situs assets to total worldwide assets (you’ll need to disclose both to the BIR to compute the ratio). The family home deduction doesn’t apply to NRAs.

Exclusions from the gross estate (commonly encountered):

Life insurance proceeds where the irrevocable beneficiary is someone other than the estate/executor/administrator.
Surviving spouse’s net share in community/conjugal property (as explained above).

6) Reciprocity for a foreign decedent’s intangible property

If the decedent is a non-resident alien, intangible personal property in the Philippines (e.g., shares in domestic corporations, bank deposits, certain debts) may be exempt from Philippine estate tax if the decedent’s country either:

imposes no estate/inheritance tax at all, or
grants a similar exemption to a Filipino who is not a resident of that country.

What BIR expects to support a reciprocity claim:

A competent proof of foreign law (e.g., certified statute extract or official certification), apostilled/consularized, with English translation if needed.
Identification and proof of non-residency in the Philippines at death.

Without adequate proof, BIR will not allow reciprocity. Banks may still withhold (see §9), and you’ll need to claim the credit/refund later.

7) Sample computations (for intuition)

Scenario A – Resident alien decedent (worldwide), ACP; no family home claim

Philippine assets: Condo ₱20,000,000 + bank ₱3,000,000 → ₱23,000,000
Assume all community property → surviving spouse share: ₱11,500,000
Gross estate (decedent’s side): ₱11,500,000
Less standard deduction (resident): ₱5,000,000
Net taxable estate: ₱6,500,000
Estate tax @ 6%:
- Multiply ₱6,500,000 by 6 → ₱39,000,000; divide by 100 → ₱390,000 due.

Scenario B – Non-resident alien decedent (only PH-situs), ACP; no family home

Same PH assets and community split as above → decedent’s side ₱11,500,000
Less standard deduction (NRA): ₱500,000
Net taxable estate: ₱11,000,000
Estate tax @ 6%:
- Multiply ₱11,000,000 by 6 → ₱66,000,000; divide by 100 → ₱660,000 due.
If reciprocity validly exempts intangible items (e.g., bank/shares) from the PH estate, recompute after removing those items.

8) Who files, when, and where

Who: The executor/administrator named in the will or appointed by court; if none, any heir may file. The estate must get its own TIN (separate from the decedent’s). When: Within 1 year from death (TRAIN Law).

BIR may grant extensions to file for meritorious reasons (limited window) and extensions to pay if payment on time would cause undue hardship—typically up to 2 years (extrajudicial) or 5 years (judicial), often with a bond and interest under the NIRC. Where: The BIR RDO having jurisdiction over the decedent’s domicile at death; for NRAs, at the RDO where any Philippine property is located or where the executor/administrator is registered.

How to file:

Use BIR Form 1801 (Estate Tax Return) via eBIRForms and pay via BIR’s ePayment channels or Authorized Agent Banks.
File and pay even if probate is pending; ask for extension or installments if warranted.

Penalties: Late filing/payment can trigger a surcharge, interest, and compromise penalties under the NIRC.

9) Bank withdrawals of the decedent’s deposits

Banks may allow withdrawals from accounts in the decedent’s name subject to a 6% withholding on the amount withdrawn, which is creditable against the estate tax. This accommodates urgent expenses while safeguarding collection.

To release remaining balances without withholding, banks will require BIR’s eCAR (see next).

10) Getting the eCAR and transferring titles

The Electronic Certificate Authorizing Registration (eCAR) is required to retitle or transfer:

Real property at the Registry of Deeds (and to pay LGU transfer taxes/registration fees).
Shares of stock at the corporate stock & transfer book (and with the SEC for certain filings).
Vehicles at the LTO.
Bank accounts for final release of funds.

The BIR (ONETT/estate unit) issues one eCAR per property (or per property lot/condo unit or per block of shares).

11) Documents you’ll typically prepare

Death certificate (Philippine or foreign; foreign docs must be apostilled/consularized and translated if not in English/Filipino).
Proof of marriage + property regime (marriage certificate; pre-nup if any).
Decedent’s and heirs’ IDs/TINs; estate’s TIN.
List and valuation of assets (titles, tax declarations, zonal value printouts; bank certifications of balances as of date of death; brokerage statements; vehicle OR/CR; business financials).
Liabilities (notarized loan documents, mortgage statements).
Will (if any) and/or court orders (probate/letters testamentary/administration).
Extrajudicial Settlement (Rule 74) or Affidavit of Self-Adjudication (if single heir), with publication proof.
Reciprocity support (for NRAs): certified foreign law text/certification.
Foreign tax credit support (if resident decedent paid estate/inheritance tax abroad): proof of payment and computation (see §12).

12) Cross-border issues

Foreign Tax Credit (FTC): If the decedent was a citizen/resident of the Philippines and foreign estate/inheritance taxes were paid on non-Philippine property, a Philippine tax credit may be allowed—capped by formulas that limit the credit to the portion of PH estate tax attributable to the foreign-situs property (and per-country limits).
Treaties: The Philippines has very few estate/inheritance tax treaties. Do not assume treaty relief; verify.
Probate of a foreign will: A will executed abroad by a foreigner can be allowed in the Philippines if it complies with the law of the place where executed or the decedent’s national law. Estate tax filing should not wait for the end of probate; seek extensions if needed.

13) Local (LGU) taxes & fees on real property transfers

Apart from the national 6% estate tax, LGUs collect a local transfer tax on the transfer of real property by succession (rates vary by locality), plus registration fees at the Registry of Deeds, and updated real property tax clearances.

14) Estate income tax vs estate tax

After death, the estate becomes a separate taxpayer (with its own TIN) for income earned during administration (rent, interest, dividends). That is different from the one-time estate tax. File the estate’s income tax returns until distribution to heirs is completed.

15) Practical roadmap (checklist)

Secure documents: death certificate, IDs, marriage/premarital regime papers.
Inventory assets & debts; determine residency/domicile at death.
Establish ownership (ACP/CPG/separate); value each asset as of date of death.
Apply the right deduction set (resident vs NRA) and consider reciprocity for intangibles (NRAs) or FTC (residents).
Get estate TIN; prepare and file BIR Form 1801 within 1 year of death; seek extensions if needed.
Pay the estate tax (and any 6% bank withholding is creditable).
Obtain eCAR(s); settle LGU transfer taxes; complete retitling/transfer.
During administration, file the estate’s income tax returns until closure.

16) Common pitfalls to avoid

Treating a long-term foreign spouse as “non-resident” without domicile analysis.
For NRAs: claiming deductions without providing worldwide asset disclosure for the proration requirement.
Insufficient proof for reciprocity → losing exemption on intangibles.
Forgetting the surviving spouse’s net share deduction under ACP/CPG.
Using sale prices instead of date-of-death values.
Waiting for probate to finish before filing → late filing penalties.
Overlooking LGU transfer taxes and eCAR per property logistics.

17) Quick answers to frequent questions

Is inheritance taxable to the heir? No income tax on the receipt of inheritance; the estate pays the estate tax.
Can we pay in installments? You may apply for extension of time to pay (with bond/interest) or use partial bank withdrawals (6% creditable withholding) for liquidity.
Do we need a will? Not required for tax filing, but probate/letters of administration or extrajudicial settlement will be needed to transfer titles.
What if there’s no Philippine property and the foreign spouse was an NRA? There is no Philippine estate tax (no PH situs assets).
What about amnesties or changing rules? The Philippines has enacted time-bound estate tax amnesties and occasionally updates procedures. Check current BIR guidance before you act.

18) What to gather before meeting counsel or your accountant

passport/ID, marriage certificate, prenup (if any), titles/tax declarations, bank & brokerage certifications (balances as of date of death), loan/mortgage papers, corporate documents for businesses, proof of residency/domicile (leases, IDs, utility bills), and any foreign-law/tax proofs for reciprocity or FTC claims.

Final note

This guide captures the core statutory framework and common BIR practice after a foreign spouse’s death affecting Philippine assets (or worldwide assets if the decedent was resident here). Because fine details (deadlines, interest rates, forms, and amnesties) change, coordinate with a Philippine tax counsel or CPA and your BIR RDO/ONETT for your estate’s specific facts.