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Thread: Inheritance Tax in Philippines!

  1. #1
    Respected Member Tish's Avatar
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    Inheritance Tax in Philippines!

    Has anyone ever encountered having to pay inheritance tax on land purchased?

    I never heard of anything like it before, even when I bought my first lot in Philippines.

    After what I called being 'conned' into paying for the right of way last year, I now been asked that I still needed to pay an inheritance tax!

    I was never aware of this matter. As far as I was concerned, I paid all duties needed for land transaction!

    Now I feel like they trying to make more money out of me

    Well I hope I'm mistaken, otherwise I will be really pi**ed off

    Hope anyone can shed light into this matter for me.

    Yours truly,
    Pi**ed Tish


  2. #2
    Respected Member PeterB's Avatar
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    Yes, if the land came froom the estate of a deceased person, and the inheritance tax has not been paid, you will not be able to register the title.

    When purchasing land, in particular, you need to beware ... 'capital gains' tax and inheritance tax are often left to the purchaser to pay. Capital gains tax is not like CGT in the UK ... it is due on the total price, not just the difference between purchase and sale price.


  3. #3
    Respected Member Tish's Avatar
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    Thanks for clearing this matter up for me PeterB, much appreciated.

    I just hope, it's not going to cost a bomb, as exchange rate not so good lately

    Tish


  4. #4
    Respected Member PeterB's Avatar
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    Well, assuming that the death occurred after January 1, 1998. the rate of Inheritance tax varies between 5% and 20% - depending on the total value of the estate of the deceased person.

    The real problem occurs if none of the IHT has been paid ... I suspect that you could end up having to ensure that the tax is paid on the full estate before you can register your title. Also, if it is more than six months since the death, there will almost certainly be a penalty to pay as well.

    Who was your attorney? They should have checked all these details before the deal was done. I think I recall postings about the right of way to access to your land - which is given by law in any land purchase, so I suspect that the legal advice you received was not good.


  5. #5
    Respected Member LEAHnew's Avatar
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    Hi ate Tish sorry to hear about it

    Is this referring to Estate tax? from Phil.Gov. BIR (Bureau of Internal Revenue) means Estate Tax is a tax on the right of the deceased person to transmit his/her estate to his/her lawful heirs and beneficiaries at the time of death and on certain transfers which are made by law as equivalent to testamentary disposition.

    And this is the link of Estate Tax law

    http://www.bir.gov.ph/taxcode/1889.htm
    I hope you will sort it out soon

    Wow Sir PeterB very well said, impress me alot for Phil Taxation
    Don't make promises when you are in JOY. Don't reply when you are SAD.
    Don't take decisions when you are ANGRY. Think twice, Act wise. BE happy.


  6. #6
    Respected Member vbkelly's Avatar
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    yeah i paid inheritance tax when i bought the lands 3years ago and im the buyer of the lands but i did paid the gain tax


  7. #7
    Respected Member Tish's Avatar
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    Quote Originally Posted by PeterB View Post
    Well, assuming that the death occurred after January 1, 1998. the rate of Inheritance tax varies between 5% and 20% - depending on the total value of the estate of the deceased person.

    The real problem occurs if none of the IHT has been paid ... I suspect that you could end up having to ensure that the tax is paid on the full estate before you can register your title. Also, if it is more than six months since the death, there will almost certainly be a penalty to pay as well.

    Who was your attorney? They should have checked all these details before the deal was done. I think I recall postings about the right of way to access to your land - which is given by law in any land purchase, so I suspect that the legal advice you received was not good.

    The death was after Jan. 1,1998, so I'm now dreading the amount I have to pay using the highest percentage.

    Also, I've got a feeling that none of the IHT has been paid since the death and that is more than a year now

    I don't think the attorney who was handing this matter for me have done their job properly, and consequently, it looks like I will now have to pay for his inadequacies


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    Respected Member Tish's Avatar
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    [QUOTE=kukurokuk;85617]Hi ate Tish sorry to hear about it

    Hi Kukurokuk, thanks for sympathizing with me and also for the link.

    The whole situation regarding the purchase of this land for me is a nightmare

    I just have to thinks that there's always light at the end of the tunnel.

    Tish


  9. #9
    Respected Member Tish's Avatar
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    Quote Originally Posted by vbkelly View Post
    yeah i paid inheritance tax when i bought the lands 3years ago and im the buyer of the lands but i did paid the gain tax

    Hi Vbkelly,

    Do you happen to recall the percentage of inheritance tax you paid 3 years ago?

    Tish


  10. #10
    Respected Member keithAngel's Avatar
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    Quote Originally Posted by Tish View Post
    I don't think the attorney who was handing this matter for me have done their job properly, and consequently, it looks like I will now have to pay for his inadequacies
    Lawyers here have a quaint professional indemnity insurance which pays up when they make a mistake otherwise they would be personally liable and another lawyer would sue them


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    andypaul's Avatar
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    Quote Originally Posted by keithAngel View Post
    Lawyers here have a quaint professional indemnity insurance which pays up when they make a mistake otherwise they would be personally liable and another lawyer would sue them
    Mr Keith knows the details, but I was thinking the same.

    If a lawyer did not discover something as important as this i think i would have him or her paying for it if at all possible.

    I think there is a phill lawyer who posts on here maybe they can advise. if not i can ask in the Wifes half of the family as there are a few lawyers but more on the commercial side so maybe different rulings etc.


  12. #12
    Respected Member Tish's Avatar
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    Quote Originally Posted by andypaul View Post
    Mr Keith knows the details, but I was thinking the same.

    If a lawyer did not discover something as important as this i think i would have him or her paying for it if at all possible.

    I think there is a phill lawyer who posts on here maybe they can advise. if not i can ask in the Wifes half of the family as there are a few lawyers but more on the commercial side so maybe different rulings etc.

    I could start litigation process for the useless solicitor, but in reality, all it do is create more hassle and anger on my part plus wasting my time and money I've no trust left in me with any solicitors out there in Philippines.

    All can do now is wait furiously for the total amount of inheritance tax to be paid for by me

    Life is so cruel indeed , and the only thing that keeps me sane is to concentrate of life here in the UK, at least I've no problem here.

    Tish


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    Respected Member LEAHnew's Avatar
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    [QUOTE=Tish;85682]
    Quote Originally Posted by kukurokuk View Post
    Hi ate Tish sorry to hear about it

    Hi Kukurokuk, thanks for sympathizing with me and also for the link.

    The whole situation regarding the purchase of this land for me is a nightmare

    I just have to thinks that there's always light at the end of the tunnel.

    Tish

    I sympathesize you coz I can relate a bit oh but not exactly me, my dad
    I know how's the feeling of it My Dad never realise that the tax
    he paid was nearly the cost of the land he purchased

    from this chart http://www.bir.gov.ph/taxinfo/tax_estate.htm#20138
    Just to give u brief idea of computation for example:
    Let say After July 28, 1992 up to December 31, 1997
    net estate= 700,000
    500,000 = 15,000
    200,000= 16,000 (8% of excess over)
    Total = 31,000

    I am not good in Taxation been aware just for my Dad concern, i think i might help him to undergo proper procedure and need good CONNECTION to the local government

    Goodluck ate Tish, it will be alright and in brightside it's good investment
    Don't make promises when you are in JOY. Don't reply when you are SAD.
    Don't take decisions when you are ANGRY. Think twice, Act wise. BE happy.


  14. #14
    Respected Member vbkelly's Avatar
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    [QUOTE=kukurokuk;85738]
    Quote Originally Posted by Tish View Post


    I sympathesize you coz I can relate a bit oh but not exactly me, my dad
    I know how's the feeling of it My Dad never realise that the tax
    he paid was nearly the cost of the land he purchased

    from this chart http://www.bir.gov.ph/taxinfo/tax_estate.htm#20138
    Just to give u brief idea of computation for example:
    Let say After July 28, 1992 up to December 31, 1997
    net estate= 700,000
    500,000 = 15,000
    200,000= 16,000 (8% of excess over)
    Total = 31,000

    I am not good in Taxation been aware just for my Dad concern, i think i might help him to undergo proper procedure and need good CONNECTION to the local government

    Goodluck ate Tish, it will be alright and in brightside it's good investment
    yeah sis leah you right i paid the tax nearly high as the lands i bought and last april i paid £400 for penalty for 3years...


  15. #15
    Respected Member LEAHnew's Avatar
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    [QUOTE=vbkelly;85742]
    Quote Originally Posted by kukurokuk View Post

    yeah sis leah you right i paid the tax nearly high as the lands i bought and last april i paid £400 for penalty for 3years...
    Don't make promises when you are in JOY. Don't reply when you are SAD.
    Don't take decisions when you are ANGRY. Think twice, Act wise. BE happy.


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