Payment of the estate tax by partial disposition

In case of insufficiency of cash for the immediate payment of the total estate tax due, the estate may be allowed to pay the estate tax due through partial disposition of estate, including the corresponding terms and conditions:

i. CONVEYANCE AND CASH RULE: The disposition, for purposes of this option, shall refer to the conveyance of property, whether real, personal or intangible property, with the equivalent cash consideration;

ii. ONE-YEAR RULE: The estate tax return shall be filed within one year from the date of decedent’s death;

iii. REQUEST AND APPROVAL: The written request for the partial disposition of estate shall be approved by the BIR. The said request shall be filed, together with a notarized undertaking that the proceeds thereof shall be exclusively used for the payment of the total estate tax due;

iv. ALLOCATION RULE: The computed estate tax due shall be allocated in proportion to the value of each property;

v. PROPORTIONATE PAYMENT: The estate shall pay to the BIR the proportionate estate tax due of the property intended to be disposed of;

vi. eCAR: An electronic Certificate Authorizing Registration (eCAR) shall be issued upon presentation of the proof of payment of the proportionate estate tax due of the property intended to be disposed. Accordingly, eCARs shall be issued as many as there are properties intended to be disposed to cover the total estate tax due, net of the proportionate estate tax(es) previously paid under this option; and

vii. PAYMENT OF TOTAL ESTATE TAX: In case of failure to pay the total estate tax due out from the proceeds of the said disposition, the estate tax due shall be immediately due and demandable subject to the applicable penalties and interest reckoned from the prescribed deadline for filing the return and payment of the estate tax, without prejudice of withholding the issuance of eCAR(s) on the remaining properties until the payment of the remaining balance of the estate tax due, including the penalties and interest. (Section 9[6.2], Revenue Regulation No. 12-2018. January 25, 2018)