Initial Steps for Estate-Tax Settlement When the Heirs Are Abroad

(Philippine perspective; updated to laws in force as of May 1 2025)

Scope & limits. The discussion below is a doctrinal overview drawn from the Tax Code (as last amended by the CREATE Act / RA 11534), the Civil Code, the Rules of Court, BIR Regulations and Revenue Memoranda through early 2025, and the Estate-Tax Amnesty Law as extended by RA 11956 (effect until 14 June 2025). It is not legal advice; facts vary and regulations evolve, so always verify the most current issuances and consult Philippine counsel.

1. Confirm the Core Facts

Fact to Pin Down	Why It Matters	Typical Proof
Date of death	Triggers the one-year filing period under §90, NIRC (extendible on meritorious written request)	PSA-issued death certificate
Citizenship & residence of decedent	Determines the breadth of the taxable estate (worldwide vs. Philippine-situs assets)	Passport, immigration records, old ACR-I Card
Exact asset list & locations	Drives valuation, documentary requirements, and which courts / registries must be approached	Titles, bank certifications, share registers, vehicle OR/CR, business FS
Number & identity of heirs	Needed for extrajudicial settlement, SPA wording, and anti-money-laundering KYC	Birth/marriage certificates, CENOMAR if single

2. Choose the Initial Legal Route

Extrajudicial Settlement (EJS) – allowed if
- no will or the will is already probated,
- no minor or incapacitated heirs or they are duly represented, and
- heirs are in complete agreement (§1, Rule 74, ROC).
Form: Deed of Extrajudicial Settlement and Adjudication with Waiver/Confirmation of Heirship; must be notarised (or consularised / apostilled) and published once a week for 3 consecutive weeks in a newspaper of general circulation.
Judicial Settlement / Probate – required when there is a contested will, conflicting claims, or a minor heir without a duly appointed guardian. Initial filings go to the proper Regional Trial Court (Special Proceedings).

Tip when heirs are abroad: judges increasingly allow videoconference testimony under A.M. 20-07-04-SC (2020 Rules on Remote Appearances). Coordinate early because courts still vary in practice.

3. Appoint a Local Personal Representative

Why: Almost every government office, bank, and registry requires a physically present signatory.

Instrument: Special Power of Attorney (SPA) naming a trusted Philippine-resident attorney-in-fact or estate administrator.

Must be executed by each overseas heir before a Philippine consulate or a local notary in the foreign country and then apostilled (Hague Convention, in force for PH since 14 May 2019).
The SPA should:
- authorize signing and filing of BIR Form 1801 and related annexes;
- allow opening/closing of estate and settlement bank accounts;
- permit transfer and consolidation of titles; and
- empower compromise or use of the Estate-Tax Amnesty if applicable.

Practical pitfall: Many SPAs omit the phrase “to receive, sign, and accept the electronic Certificate Authorizing Registration (eCAR),” causing banks/LRA registries to refuse the attorney-in-fact later.

4. Secure the Estate’s Own Taxpayer Identification Number (TIN)

Under RMO 24-2019 an estate is a distinct tax entity.

File BIR Form 1904 (TIN for One-Time Transactions) at the Revenue District Office (RDO) that has jurisdiction over the decedent’s place of residence at death.
Attach death certificate and any SPA.
The estate TIN will be used for Form 1801, eCAR, and any income tax returns while the estate is under administration.

5. Compile the Documentary Backbone

Minimum universal set (photocopies + originals for authentication):

Death certificate (PSA).
Marriage certificate and birth certificates of heirs (PSA).
Decedent’s notarised list of liabilities (if any).
Certificate of Title / CCTs – latest owner’s duplicate.
Tax declarations & real-property tax clearance (LGU).
Bank certification of balances as of date of death.
Vehicle OR/CR; LTO clearance for transfer.
Stock certificates or BIR-validated book-valued FS of corporations.
If availing of Estate-Tax Amnesty – BIR Form 2118-EA and proof of payment.
SPA / Apostilled documents of overseas heirs.
Three newspaper issues carrying the EJS publication (if using EJS).

6. Determine and Document Asset Valuations

Asset Type	Valuation Basis (Sec. 88, NIRC & BIR RR 12-2022)
Real property	Higher of BIR zonal value or LGU fair-market value as of date of death
Listed shares	Closing price on date of death (PSE data)
Unlisted shares	Book value per latest audited FS before death
Bank deposits	Actual balance + accrued interest up to date of death
Cash abroad	Convert using BSP reference rate on date of death

Heirs abroad: Secure digital copies of brokerage statements and have the issuing bank/firm provide an apostilled certification. Philippine banks routinely freeze accounts immediately upon learning of death; the SPA holder should request certification before closure for estate settlement.

7. File the Estate-Tax Return (BIR Form 1801)

Deadline: Within one (1) year from date of death (§90, NIRC).
Extensions up to 30 days are discretionary; file a written request citing “undue hardship because heirs reside abroad” before the original deadline lapses.
Where: RDO of last residence or RDO 39-South Quezon City (Large Taxpayers) if the decedent was classified as such.
How:
- eFPS is optional but increasingly encouraged; attach scanned, signed PDFs.
- Present hard-copy originals for face-to-face validation if the eCAR will later be used for property transfers.

8. Pay or Secure Extension / Installment

Scenario	Tool	Key Points
Full cash payment	Any AAB (Authorized Agent Bank) or G-Cash/PayMaya if < PHP 500 k	Keep bank-validated BIR Form 0605
Unable to pay in full	Application for Payment by Installment (BIR Form 1905 + sworn request)	Must post a bond equal to tax due plus 25 %; maximum 2-year term
Within Amnesty window (until 14 June 2025)	Estate-Tax Amnesty (RR 33-2023)	Rate 6 % of net estate or minimum PHP 5 000, no penalties/surcharges

9. Secure the Certificate Authorizing Registration (eCAR)

Processing time: 20–30 calendar days after BIR accepts payment/documents.
One eCAR per immovable property and one consolidated eCAR for personal property.

Remote heirs checklist:

Provide the attorney-in-fact with a USB or cloud folder containing scanned IDs and SPA; BIR often asks for a second set.

Some RDOs now issue the eCAR electronically with QR-code validation in lieu of the green paper CAR. Acceptable to LRA and banks since RMC 39-2022.

10. Transfer Title & Release Frozen Assets

Register Deed of Adjudication/EJS + eCAR with the Registry of Deeds / LRA (real property) or LTO (vehicles).
Present eCAR and Bank Compliance Certificate to lift the deposit freeze (§97, NIRC).
For listed shares, submit to the transfer agent; for unlisted, note in the stock and transfer book and file an Updated General Information Sheet (SEC).

11. Wrap-Up Compliance

Estate Income Tax Return (BIR Form 1701/1702) – if the estate earns income while under administration.
Final Accounting – deliver to heirs or file with the probate court.
Cancellation of Estate TIN – upon final distribution (BIR Form 1905).

Frequent Pain Points Unique to Overseas Heirs

Problem	Quick Fix
SPA rejected as “foreign language”	Attach side-by-side English translation, apostilled by the same authority
Missed one-year deadline	Evaluate Estate-Tax Amnesty eligibility (if still before 14 June 2025) or file late with 25 % surcharge + 12 % p.a. interest
Heir cannot appear for newspaper publication affidavit	Consular officer abroad may administer oath; send apostilled original to PH notary for attachment
Foreign divorce of the decedent not yet recognized in PH	Secure RTC recognition of foreign judgment first, otherwise BIR treats the former spouse as surviving heir

Quick Timeline (idealized)

Weeks 1-4: Collate facts ➜ draft & execute SPA ➜ apply for Estate TIN.
Weeks 5-8: Prepare asset valuations ➜ sign & apostille EJS ➜ start newspaper publication.
Week 9: File Form 1801 and pay or apply for amnesty/installment.
Weeks 10-14: Receive eCARs ➜ lodge with RD/LTO ➜ unfreeze bank accounts.
Weeks 15-20: Transfer titles ➜ final accounting ➜ distribute estate.

(Litigated estates take much longer.)

Key Take-Aways

Front-load the SPA and apostille work. Almost every subsequent step hinges on a Philippine-resident administrator with unquestioned authority.
Track the one-year clock (or amnesty deadline) from date of death; overseas logistics eat time.
E-solutions exist (eFPS, electronic eCAR, video testimony), but uptake is still uneven; verify each office’s current practice.
Keep originals courier-ready even in the era of scans; BIR and registries will still ask to sight originals before releasing the eCAR or TCTs.

By addressing these fundamentals early, heirs living abroad can avoid the most common bottlenecks and extra costs in Philippine estate-tax settlement.