8/13/2019 Case Digests (Tax II - Dec 5 2013).docx
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1. Lorenzo v Posadas
Facts:
1. Thomas Hanley died in Zamboanga leaving a will and
considerable amount of real and personal prop2. Probate proceeding
begun. Will states:
1. Money left to be given to nephew2.
Real prop not tobe sold w/in 10 yrs from death. Same be handled
by exec and proceeds given toMatthew and he be directed to use it
for education of brothers children and descendants
3. 10 yrs after death, property iven to Matthew to be disposed
of in a manner he deemsadvantageous
3. resp CIR went to the probate court praying that the trustee,
plaintiff herein, be ordered to pay to theGovernment the said sum
of P2,052.74
4. Pet paid in protest asking CIR to refund the amount or suit
to be brought. Overrued, refused to refundIssues:
1. When does inheritance tax accrue2. what value to base the
inheritance tax, from death or after 10 yrs?3. deductible
compensation due to trustees?4. What law governs the case at bar?
Should the provisions of Act No. 3606 favorable to the tax -payer
be
given retroactive effect?
5. Has there been delinquency in the payment of the inheritance
tax?Ruling:
1. Section 1536 as amended, of the Administrative Code, imposes
the tax upon every transmission by virtueof inheritance, devise,
bequest, gift mortis causa, or advance in anticipation of
inheritance,devise, or
bequest. The tax therefore is upon transmission or the transfer
or devolution of property of a decedent,
made effective by his death, which is the transfer to Moore, the
trustee. Tax shall have been paid beofre
such transfer
2. If death is the generating source from which the power of the
estate to impose inheritance taxes takes itsbeing and if, upon the
death of the decedent, succession takes place and the right of the
estate to tax
vests instantly, the tax should be measured by the value of the
estate as it stood at the time of thedecedents death
3. There is no statute in the Philippines which requires
trustees commissions to be deducted in determiningthe net value of
the estate subject to inheritance tax There is no statute in the
Philippines which requires
trustees commissions to be deducted in determining the net value
of the estate subject to inheritance tax
4. Act. No. 3606 went into effect on January 1, 1930. It,
therefore, was not the law in force when the testatordied on May
27, 1922. The law at the time was section 1544 above -mentioned, as
amended by Act No.
3031, which took effect on March 9, 1922. It is well-settled
that inheritance taxation is governed by the
statute in force at the time of the death of the decedent
5. delivery to the trustee was delivery to thecestui quetrust,
the beneficiary in this case, within the meaningof the first
paragraph of subsection (b) of section 1544 of the Revised
Administrative Code. The
delinquency in payment occurred on March 10, 1924, the date when
Moore became trustee. The interestdue should be computed from that
date
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