How to Compute Estate Tax for the Property of a Deceased Widow in the Philippines
A comprehensive, step‑by‑step guide under the National Internal Revenue Code (NIRC) as last amended by the TRAIN Law (R.A. 10963) and related issuances through July 20 2025.
1. Estate Tax in a Nutshell
| Item | Key Rule (2025) |
|---|---|
| Tax base | Net estate (gross estate – allowable deductions) |
| Rate | Single, flat 6 % under §84, NIRC (TRAIN) |
| Return | BIR Form 1801 (“Estate Tax Return”) |
| Deadline | Filed within one (1) year from date of death; extensions possible for “undue hardship” (BIR RMO 26‑2020) |
| Payment | Pay upon filing; if the estate’s liquidity is insufficient, installment payment is allowed within 2 years from original due date, interest‑free (NIRC §91) |
| Amnesty window | 6 % amnesty rate under R.A. 11569/11956 until 14 June 2025 for estates of decedents who died on or before 31 May 2022 |
| Document clearance | Electronic Certificate Authorizing Registration (eCAR) is required before property can be retitled or shares transferred |
2. Scope: Estates of Widows
“Widow” simply means the decedent’s spouse pre‑deceased her; the computation rules are the same as for any resident citizen, but two practical issues arise:
Property regime audit
- Conjugal Partnership of Gains (CPG) or Absolute Community of Property (ACP): you must first split the common property 50‑50; only the deceased widow’s ½ share enters her gross estate.
- Paraphernal/Exclusive property remains 100 % hers.
Surviving‑spouse deduction no longer applies (there is no surviving spouse), so the estate cannot claim that deduction.
3. Step‑by‑Step Computation
3.1 Determine Gross Estate
Include all property in the Philippines and, if the decedent was a citizen or resident alien, property worldwide:
| Category | Typical items | Valuation rule (at death) |
|---|---|---|
| Real property | Land, house, condominium | Higher of BIR Zonal Value or LGU Fair Market Value on assessor’s schedule |
| Personal–Tangible | Jewelry, vehicles, art | Fair market value or appraised value |
| Personal–Intangible | Bank deposits, stocks, receivables, insurance proceeds (to the extent of “revocability”), digital assets | Face value or quoted price; listed shares at lowest closing price on death date |
Bank freeze rule (§97, NIRC): banks may release deposits of a decedent only upon presentation of a BIR clearance or eCAR.
3.2 Deduct Conjugal/Community share (if any)
Only the widow’s ½ share of common property continues in the computation.
3.3 Apply Allowable Deductions (TRAIN)
| Deduction | Cap / Note |
|---|---|
| Standard deduction | ₱5,000,000 (automatic; no substantiation) |
| Family home | Up to ₱10,000,000 FMV; excess value returns to gross estate |
| Funeral expenses | Lower of ₱200,000 or 5 % of gross estate |
| Claims against estate | Valid personal debts & legit expenses incurred before death |
| Claims against insolvent persons | Debts owed to the decedent that became worthless |
| Transfers for public use | Donations mortis causa in favor of the government |
| Net share of surviving spouse | Not applicable (decedent is the widow) |
| Foreign estate tax paid | Tax credit for citizens/resident aliens, limited to proportion of foreign assets |
| Accrued retirement benefits (SSS/GSIS, etc.) | Exempt by statute |
Medical expenses deduction was repealed by TRAIN; ignore in 2025 computations.
3.4 Compute Net Estate & Tax
$$
\text{Net Estate}=
\text{Gross Estate}
-\bigl(\text{Conjugal Share} + \text{Deductions}\bigr)
$$
$$ \text{Estate Tax}= \text{Net Estate} \times 6% $$
3.5 Illustrative Example
Facts. Widow Maria died 10 March 2025. Assets (all conjugal):
- Family home (zonal value) ……… ₱ 12,000,000
- Land in Batangas …………………… ₱ 4,000,000
- Bank deposits …………………………… ₱ 1,500,000
- Jewelry ……………………………………… ₱ 300,000
Funeral expenses proved: ₱150,000. No debts.
| Step | Amount (₱) |
|---|---|
| A. Gross estate (half of conjugal) | ((12,000,000 + 4,000,000 + 1,500,000 + 300,000) × ½) = 8,900,000 |
| B. Deductions | |
| • Standard | 5,000,000 |
| • Family home | min(10 M, 12 M × ½) = 6,000,000 → capped at 5,000,000 (because total deductions may not exceed gross estate; practical cap) |
| • Funeral | 150,000 |
| Total deductions | 10,150,000 (but cannot exceed Gross Estate) → reduces to 8,900,000 |
| C. Net estate | 0 |
| Estate tax due | ₱0 – nothing payable |
Take‑away: between the standard and family‑home deductions, modest estates of widows often incur zero estate tax, but you must still file the return and secure an eCAR for title transfer.
4. Estate Tax Amnesty (until 14 June 2025)
| Feature | Rule |
|---|---|
| Who may avail | Estates of decedents on or before 31 May 2022, whether or not previously assessed |
| Rate | 6 % of net estate or 6 % of FMV of undeclared property, whichever is higher |
| Minimum tax | ₱5,000 |
| Where to file | Same BIR RDO where the estate is registered/decedent last resided |
| Effect | Immunity from penalties, interest, civil/criminal prosecution; once paid, BIR issues eCAR |
| Exclusions | Properties involved in pending cases for illicit origin (e.g., Anti‑Money Laundering, forfeiture) |
Practical tip: heirs may file a provisional amnesty return using “as‑is‑where‑is” valuation if documents are incomplete, then submit the full inventory before eCAR release.
5. Filing & Documentary Requirements
Obtain TIN of the Estate (BIR Form 1904).
Prepare BIR Form 1801 with:
- Sworn Estate Tax Return
- Certified Schedule of Properties (with appraisals)
- Copy of death certificate
- Marriage contract + former spouse’s death certificate (to prove widow status)
- Original titles & latest tax declarations
- Bank certifications (balances at death)
- List of debts & supporting vouchers
- CPA‑certified statement of assets & liabilities if gross estate > ₱10 M (per RMC 34‑2021)
Pay at AAB/eFPS/Landbank Link‑Biz or via OTC‑Online (eSPT).
Secure eCAR from BIR’s One‑Time Transaction (ONETT) team.
Register new titles (Registry of Deeds/LTO/Company Secretary).
6. Penalties for Late Filing
| Violation | Add‑on |
|---|---|
| Late filing/payment | 25 % surcharge on basic tax |
| Willful neglect / false return | 50 % surcharge |
| Interest | 20 % p.a. (NIRC §249) or prevailing rate set by BSP |
7. Settlement Paths for Widows’ Estates
Extrajudicial Settlement with/without heirs (Rule 74, ROC)
- Allowed if there are no debts or all creditors paid.
- Publish a 3‑week notice in a newspaper; execute ‘Deed of Extrajudicial Settlement’; pay estate tax; secure eCAR; re‑title.
Judicial Settlement
- Necessary if heirs are minors, incapacitated, or the estate is contested.
Small Estate Affidavit (A.M. No. 21‑06‑08‑SC, expanded 2022)
- If gross value ≤ ₱10 M and no will, heirs may use a notarized affidavit to collect personal property; real property still needs deed and eCAR.
8. Special Practical Issues
| Issue | Guidance |
|---|---|
| Prior inheritance from deceased spouse | Property inherited from the first spouse now forms part of the widow’s estate unless she already transferred it to heirs via donation. |
| Unregistered land / untitled property | Obtain DENR‑approved survey and secure an original title in the estate’s name before distribution. |
| Overseas realty | Philippine resident citizens must include it; claim foreign estate‑tax credit; attach proof of payment abroad. |
| Digital assets (crypto, NFT, in‑game items) | Present wallet screenshots, exchange valuations on death date; include as intangible property. |
| Business interests | Provide CPA valuation or latest audited equity; if sole proprietorship, treat as personal property. |
9. Common Pitfalls & How to Avoid Them
- Using zonal values older than the valuation table on date of death → always verify the effective schedule.
- Ignoring bank freeze → secure an eCAR first to access deposits.
- Missing the 1‑year deadline → penalties may dwarf the tax; request an extension early via a “Letter of Request for Extension” to the Commissioner/Regional Director.
- Failure to document debts → only debts evidenced by notarized instruments or creditor certifications are deductible.
- Estate tax vs. donor’s tax confusion → donations by heirs after death incur donor’s tax; estate tax applies only on the transfer due to death.
10. Quick Compliance Checklist
- Secure estate TIN
- Inventory all assets (with FMV evidence)
- Audit conjugal vs exclusive property
- Compute deductions & net estate
- Prepare BIR Form 1801 + attachments
- File & pay (or avail of amnesty) within 1 year
- Obtain eCAR
- Transfer titles/registrations
11. Frequently Asked Questions (FAQs)
Q1. Must we file if the estate is below ₱5 M and tax is zero? A. Yes. Filing is mandatory to obtain an eCAR and legally transfer the property.
Q2. Can the heirs sign the return electronically? Yes, through BIR’s eSPT/ONETT portals, provided all notarized documents are uploaded.
Q3. What if the heirs discover an unlisted property after filing? File an amended return and pay the 6 % tax (or amnesty rate if still within coverage) on that additional asset.
Q4. Are SSS or GSIS survivorship benefits taxable? No, statutory benefits are excluded from the gross estate.
12. Disclaimer
This article is for general information only and not a substitute for independent professional advice. Estate‑tax rules are strictly enforced; consult a Philippine tax lawyer or CPA for case‑specific guidance.
Bottom line: For a deceased widow, computing estate tax centers on correctly splitting conjugal assets, maximizing the TRAIN‑era standard and family‑home deductions, and applying the 6 % flat rate—or amnesty—within the statutory deadlines. Careful documentation and timely filing ensure a smooth transfer of her legacy to the rightful heirs.