Updated for the TRAIN Law framework (flat 6% estate tax on the net estate), but focused here on the gross estate—the starting point before deductions.

1) What “Gross Estate” Means

The gross estate is the total value, at the moment of death, of all property and property rights owned, controlled, or deemed transferred by the decedent, wherever situated (for resident citizens and resident aliens), subject to situs limits for non-residents. You compute it before any deductions (funeral, judicial expenses, debts, standard deduction, family home deduction, etc.).

2) Who Is Taxed on What (Residency & Citizenship)

Resident citizens / resident aliens: Include worldwide assets in the gross estate.
Non-resident citizens / non-resident aliens: Include Philippine-situs assets only (see situs rules below).
Intangibles of non-resident aliens: May be excluded under the reciprocity rule if the country of domicile either (a) imposes no transfer tax on intangibles of Filipino decedents or (b) exempts Filipinos under similar circumstances. Obtain a competent proof (foreign law certification) before excluding.

3) What the Gross Estate Includes

Think of inclusions in two buckets: (A) outright ownership and (B) deemed transfers/retained powers.

A. Property Outrightly Owned at Death

Real property
- Land, buildings, condominium units, and improvements.
- Valuation: Fair market value (FMV) at death; for Philippine realty, use the higher of (i) BIR zonal value (if any) or (ii) assessor’s FMV from the latest schedule of market values. Include improvements separately when they have distinct values.
Tangible personal property
- Vehicles, jewelry, art, antiques, equipment, inventories (if sole proprietor), household goods (to the extent not exempt).
- Valuation: FMV at death (appraisal or market price less appropriate selling costs if justified).
Intangible personal property
- Bank deposits (peso and foreign currency), time deposits, cash on hand at death.
- Securities: Listed shares (see valuation below), unlisted shares, bonds, mutual funds, UITF/feeder funds, derivatives held as of death.
- Receivables/notes owing to the decedent (face value less impairment).
- Interests in partnerships/sole proprietorships, business goodwill (if measurable), and intellectual property owned by the decedent.

Special valuation notes for securities

Listed shares: Use the market price on date of death. If no trading that day, use the nearest trading day price(s) and follow exchange rules (average or closing convention used by BIR practice).
Unlisted common shares: Use adjusted book value (equity attributable to common divided by outstanding common shares), based on the latest audited financials nearest the date of death, adjusted for material events up to death.
Unlisted preferred shares: Typically par value or a present-value measure if dividend/ redemption features are substantive.
Mutual funds/UITFs: Net asset value per unit (NAVPU) at date of death.

B. Property Deemed in the Estate (Transfers & Retained Powers)

These catch situations where ownership was shifted but control or enjoyment was retained:

Transfers in contemplation of death
- Gifts or transfers made because of anticipated death (e.g., donee gets property only at, or shortly before, death and circumstances show testamentary intent).
Revocable transfers
- Transfers where the decedent retained a power to revoke, alter, amend, or terminate the transferee’s enjoyment. If the power existed at death (alone or with another), the property is included.
Transfers with retention of possession, enjoyment, income, or the right to designate who enjoys
- E.g., donation with reserved usufruct, deed of donation propter nuptias with reserved income, or bare title given away while the decedent kept usufruct or lifetime income. The property’s value is included while the decedent retained such rights at death.
Life insurance proceeds
- Included if: (i) the beneficiary is the estate, executor, or administrator, or (ii) the beneficiary designation was revocable at death (the decedent could change it).
- Excluded if: the beneficiary was irrevocably designated and is someone other than the estate/executor/administrator. Keep written proof (policy and endorsements).
Powers of appointment
- General power (power exercisable in favor of the decedent, their estate, or their creditors): included.
- Special/limited power: generally excluded.
Annuities and similar interests
- Include the portion attributable to the decedent’s contributions where payments survive the decedent, subject to specific contract terms.
Property passing under buy-sell, option, or similar arrangements
- If a decedent owned an interest subject to a buy-sell at death, include FMV at death; the buy-sell price may be relevant for valuation only if it’s a bona fide, arm’s-length, binding agreement entered well before death and reflects fair value (substance over form).

4) Situs Rules (What Counts as “Philippine-Situs”)

Real property: Situs where located. Philippine land/buildings are Philippine-situs.
Tangible personal property: Situs where physically located at death.
Intangibles (key guideposts):
- Shares in domestic corporations: Philippine-situs.
- Franchises exercised in the Philippines: Philippine-situs.
- Deposits in Philippine banks: generally treated as Philippine-situs.
- Reciprocity rule can exclude intangibles for non-resident aliens (see Section 2), but never for real or tangible personal property.

5) Community/Conjugal vs. Exclusive Property

In absolute community or conjugal partnership of gains, identify what is exclusive vs community/conjugal.
Only the decedent’s share is included in their gross estate:
- Usually 1/2 of community/conjugal property (unless a different share applies).
- Exclusive property of the decedent is included in full.
Keep proof: marriage regime (marriage certificate, pre-nup), titles indicating how property was acquired, and improvements funded by exclusive vs conjugal funds.

6) Valuation Principles and Evidence

Time of valuation: Exact time of death.
Evidence: Titles, deeds, certificates, bank certifications, broker statements, policy schedules, appraisals, audited financial statements, receivable ledgers.
Real property: Get assessor’s certification and check BIR zonal values; use the higher as the baseline FMV.
Businesses/equity interests: Use the latest reliable financials, adjust for material events up to death (e.g., large write-offs, dividends declared but unpaid, significant asset revaluations).
Foreign assets: Translate values using Bangko Sentral reference rates at date of death (or documentary bank rates consistently applied), and document conversions.

7) Step-by-Step: Computing the Gross Estate

Profile the decedent Residency/citizenship; marital property regime; date of death.
Inventory assets (by class and situs)
- Real property (with TCT/CCT, lot/area, location, improvements).
- Tangibles (vehicles, jewelry, art, equipment).
- Intangibles (bank balances, stocks, funds, receivables, IP).
- Business interests (sole prop, partnership share, corporation equity).
- Insurance policies (owner, insured, beneficiary type, revocability).
- Property previously donated with reserved usufruct/control.
Tag inclusions under outright ownership or deemed transfers (Section 3).
Determine situs for each asset (Section 4), especially for non-residents.
Value each item at date of death (Section 6).
Aggregate values → Gross Estate.

(Only after this figure do you compute the net estate by subtracting allowable deductions.)

8) Worked Example (Illustrative)

Facts (resident Filipino, married under absolute community):

Family home (Quezon City): assessor FMV ₱9,000,000; BIR zonal ₱11,500,000.
Vacant lot (Laguna): assessor ₱2,000,000; zonal ₱1,800,000.
SUV: ₱1,200,000 FMV.
Bank deposits (PH banks): ₱3,000,000.
Listed shares (PSE): ₱4,200,000 market value at death.
Unlisted common shares (100,000 shrs; adjusted book value ₱30/shr): ₱3,000,000.
Life insurance (owner = decedent; beneficiary = spouse, irrevocable): ₱2,000,000 face.
Donation inter vivos of a rental condo two years before death with reserved lifetime usufruct (property FMV at death): ₱6,000,000.
All assets (except the unlisted shares) are community; unlisted shares are exclusive (acquired before marriage).

Gross estate computation:

Family home: ₱11,500,000 (higher of assessor/zonal) → include only decedent’s 1/2 if community property is split later for net estate purposes. But for gross estate, best practice is to list full values by property then indicate the fraction belonging to decedent. To keep alignment with estate forms, compute the decedent’s interest directly:
- Decedent’s 1/2 of family home: ₱5,750,000
Vacant lot (community): decedent’s 1/2 of ₱2,000,000 (higher of ₱2.0M vs 1.8M): ₱1,000,000
SUV (community): decedent’s 1/2 of ₱1,200,000: ₱600,000
Bank deposits (community): decedent’s 1/2 of ₱3,000,000: ₱1,500,000
Listed shares (community): decedent’s 1/2 of ₱4,200,000: ₱2,100,000
Unlisted common shares (exclusive): ₱3,000,000 (100%)
Life insurance (beneficiary irrevocable): ₱0 included
Condo donated with reserved usufruct: ₱6,000,000 included (deemed retained enjoyment at death)

Gross Estate = ₱5,750,000 + ₱1,000,000 + ₱600,000 + ₱1,500,000 + ₱2,100,000 + ₱3,000,000 + ₱6,000,000 = ₱19,950,000

(Only after this would you move to deductions to arrive at the net estate.)

9) Common Inclusion/Exclusion Pitfalls

Assuming all life insurance is excluded. It’s excluded only if the beneficiary is irrevocably designated and not the estate/executor/administrator.
Forgetting retained usufruct or income. Any donation where the decedent kept use or income is typically pulled back into the estate.
Ignoring community vs exclusive provenance. Validate acquisition dates and sources of funds.
Relying on book values for realty. Use zonal or assessor’s FMV, and pick the higher.
Overlooking receivables and accrued income earned before death.
Missing reciprocity for non-resident aliens holding Philippine intangibles—this can materially change the gross estate.

10) Documentation Checklist (to substantiate the Gross Estate)

Civil status & regime: Marriage certificate, pre-nuptial agreement.
Titles & tax declarations: TCT/CCT, assessor certifications, improvement permits.
Zonal values: BIR certifications/screens showing applicable zonal rates at date of death.
Bank certifications of balances as of date of death.
Broker/transfer agent certifications for shareholdings and market prices.
Company financials for unlisted share valuation (audited FS + adjustments).
Insurance policies and beneficiary endorsements noting revocable/irrevocable status.
Donation deeds showing any reserved usufruct/retained powers.
Receivable schedules and supporting contracts.
Foreign asset statements plus FX conversion proof at date of death.
Reciprocity proof (for non-resident alien decedents’ intangibles).

11) Quick Reference—What to Include in the Gross Estate

Property owned at death (real, tangible, intangible).
Property transferred but with retained:
- Power to revoke/amend;
- Possession, usufruct, income, or right to designate;
- General power of appointment;
- Insurance proceeds payable to estate/executor/administrator, or with revocable beneficiary.
Situs-eligible property for non-residents.
Only decedent’s share of community/conjugal; 100% of exclusive.

12) Final Notes

The gross estate is an inventory and valuation exercise pinned to the exact time of death. Treat it like a due-diligence audit: complete listing, correct situs, proper valuation, and clear evidence.
Getting the gross estate right prevents over- or under-stating the taxable base and reduces downstream disputes when you compute the net estate and tax due.

If you want, I can turn this into a fill-in worksheet or spreadsheet tailored to your facts so you (or your counsel) can populate each line item and compute the gross estate systematically.