BIR Ruling No. 085-82 (March 22, 1982)

June 5th, 2009

34-h 000-00 085-82

Atty. Angel L. Santos

203 Aristocrat Apts.

2020 A. Mabini Street

Malate, Metro Manila

S i r :

This refers to your letter dated April 4, 1981, requesting for the issuance of a certificate of exemption from the payment of capital gains tax on the transfer of the title, right and interest over a parcel of land covered by Transfer Certificate of Title No. 459319 from the Trustee, Jose Bernabe, Jr., in favor of the Donee-Beneficiary, Vicente Patricio Gomez, pursuant to the provisions of the Deed of Transfer of Trust dated March 4, 1981.

It appears from the documents submitted that subject parcel of land with improvements previously covered by TCT No. 446480 was donated to Vicente Patricio Gomez pursuant to a Deed of Donation with Trust executed on July 25, 1974 by Engracia C. Reyes; that it was registered in the name of the Trustee Jose Bernabe, Jr. for and in behalf of the Donee-Beneficiary on October 1, 1974 after the donor’s tax has been paid on August 26, 1974; that the Donee-Beneficiary has attained the age of 25 years; and that the transfer of the property from the trustee to the Donee-Beneficiary was effected so as to comply with the provisions of the said Deed of Donation with Trust to the effect that, after the Donee-Beneficiary has reached the said age, the trust created shall automatically be terminated and title to its property subject of the trust shall pass to and vest in the Donee-Beneficiary. cdtech

In reply, please be informed that inasmuch as the “Deed of Transfer of Trust” actually involved the termination of the Trust when the Donee-Beneficiary attained the age of twenty-five (25), no capital gains was realized nor loss incurred on the subsequent transfer of the title to the property from the Trustee to the Donee-Beneficiary. Accordingly, no capital gains tax, as imposed under Section 34(h) of the Tax Code, as amended by Batas Pambansa No. 37, is due from the Trustee under these particular circumstances.

Very truly yours,

RUBEN B. ANCHETA

Acting Commissioner

Entry Filed under: Taxation

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