ESTATE TAX ON YOUR BANK SAVINGS
𝗤𝗨𝗘𝗦𝗧𝗜𝗢𝗡: 𝗪𝗛𝗔𝗧 𝗜𝗙 𝗕𝗔𝗡𝗞 𝗦𝗔𝗩𝗜𝗡𝗚𝗦 𝗢𝗡𝗟𝗬 𝗔𝗡𝗚 𝗡𝗔𝗜𝗪𝗔𝗡 𝗡𝗚 𝗗𝗘𝗖𝗘𝗔𝗦𝗘𝗗? 𝗠𝗔𝗬 𝗘𝗦𝗧𝗔𝗧𝗘 𝗧𝗔𝗫 𝗣𝗔 𝗕𝗔? 
Thank you for this very practical question.
Many families think that estate tax applies only when the deceased person left land, house, condominium, or other real properties.
But the truth is, 𝗯𝗮𝗻𝗸 𝘀𝗮𝘃𝗶𝗻𝗴𝘀 𝗮𝗻𝗱 𝗯𝗮𝗻𝗸 𝗱𝗲𝗽𝗼𝘀𝗶𝘁𝘀 may also form part of the estate of the deceased person.
So yes, even if bank savings only ang naiwan, it may still be covered by estate settlement rules.
But let us clarify this carefully.
𝗔𝗡𝗦𝗪𝗘𝗥:
Estate tax is not automatically 6% of the full bank balance.
Under the Philippine TRAIN Law, estate tax is generally 6% of the 𝗻𝗲𝘁 𝘁𝗮𝘅𝗮𝗯𝗹𝗲 𝗲𝘀𝘁𝗮𝘁𝗲.
Meaning, the BIR first looks at the total estate, then applies allowable deductions.
𝗦𝗜𝗠𝗣𝗟𝗘 𝗙𝗢𝗥𝗠𝗨𝗟𝗔:
Gross Estate
less Allowable Deductions
= Net Taxable Estate
Net Taxable Estate x 6%
= Estate Tax Due
𝗘𝗫𝗔𝗠𝗣𝗟𝗘:
If the deceased person only left bank savings of ₱800,000 and no other assets, the estate may still be subject to reporting or documentation, but the estate tax due may be zero after applying the standard deduction.
For resident citizens and resident aliens, the standard deduction is generally ₱5,000,000.
So in simple illustration:
Bank savings: ₱800,000
Less standard deduction: ₱5,000,000
Net taxable estate: ₱0
Estate tax due: ₱0
This means hindi automatic nga naay bayranan nga estate tax if gamay ra ang estate.
But there may still be documents and bank requirements before the money can be released to the heirs.
𝗜𝗠𝗣𝗢𝗥𝗧𝗔𝗡𝗧 𝗥𝗘𝗠𝗜𝗡𝗗𝗘𝗥:
Even if the estate tax due may be zero, the bank will usually not release the account of a deceased depositor immediately.
Once the bank knows that the depositor has passed away, the account will normally be subject to bank procedures and BIR-related requirements.
The heirs may be asked to submit documents such as:
Death certificate
Valid IDs of heirs
Proof of relationship
Estate TIN
BIR Form 1904 stamped received by the BIR
Bank certification of balance
Other bank-specific requirements
𝗪𝗛𝗔𝗧 𝗜𝗙 𝗧𝗛𝗘 𝗛𝗘𝗜𝗥𝗦 𝗡𝗘𝗘𝗗 𝗧𝗢 𝗪𝗜𝗧𝗛𝗗𝗥𝗔𝗪 𝗧𝗛𝗘 𝗕𝗔𝗡𝗞 𝗦𝗔𝗩𝗜𝗡𝗚𝗦?
Under BIR rules, the executor, administrator, or legal heir may be allowed to withdraw from the bank deposit account of a deceased depositor within one year from the date of death.
However, the amount withdrawn may be subject to 6% final withholding tax.
For joint accounts, the 6% final withholding tax is generally based only on the share of the deceased depositor.
Before allowing withdrawal, the bank may require the Estate TIN and BIR Form 1904 of the estate, stamped received by the BIR.
The bank will then withhold and remit the 6% final tax and issue the proper BIR certificate.
𝗪𝗛𝗔𝗧 𝗜𝗙 𝗧𝗛𝗘 𝗕𝗔𝗡𝗞 𝗗𝗘𝗣𝗢𝗦𝗜𝗧 𝗪𝗔𝗦 𝗔𝗟𝗥𝗘𝗔𝗗𝗬 𝗜𝗡𝗖𝗟𝗨𝗗𝗘𝗗 𝗜𝗡 𝗧𝗛𝗘 𝗘𝗦𝗧𝗔𝗧𝗘 𝗧𝗔𝗫 𝗙𝗜𝗟𝗜𝗡𝗚?
If the bank deposit was already declared as part of the estate and the estate tax was already paid or properly processed, the heirs may present the eCAR or BIR clearance to the bank.
In that case, the bank withdrawal may no longer be subject to the separate 6% final withholding tax on withdrawal.
𝗪𝗛𝗔𝗧 𝗜𝗙 𝗠𝗢𝗥𝗘 𝗧𝗛𝗔𝗡 𝗢𝗡𝗘 𝗬𝗘𝗔𝗥 𝗡𝗔 𝗙𝗥𝗢𝗠 𝗧𝗛𝗘 𝗗𝗔𝗧𝗘 𝗢𝗙 𝗗𝗘𝗔𝗧𝗛?
If more than one year has passed, the heirs may need to go through the regular estate settlement process with the BIR before the bank releases the funds.
This may involve estate tax filing, BIR assessment, payment if any, and issuance of the required BIR documents.
That is why it is better to act early.
𝗣𝗥𝗔𝗖𝗧𝗜𝗖𝗔𝗟 𝗚𝗨𝗜𝗗𝗘 𝗙𝗢𝗥 𝗛𝗘𝗜𝗥𝗦:
If the deceased person left bank savings only, here are the recommended first steps:
Go to the bank and ask for their requirements for a deceased depositor’s account.
Request the bank balance as of the date of death.
Check if the account is individual or joint.
Secure the death certificate.
Ask the BIR RDO about Estate TIN and BIR Form 1904 requirements.
Ask whether the withdrawal may be handled through the 6% final withholding tax route or through regular estate tax settlement.
Consult a CPA, lawyer, or tax professional if the amount is substantial or if there are several heirs.
𝗦𝗜𝗠𝗣𝗟𝗘 𝗘𝗫𝗣𝗟𝗔𝗡𝗔𝗧𝗜𝗢𝗡:
Bank savings only does not mean “no process.”
Bank savings may still be part of the estate.
But if the total estate is small and below the allowable deductions, the actual estate tax due may be zero.
However, the heirs still need to comply with the bank and BIR requirements before the money can be released.
𝗥𝗘𝗔𝗟 𝗟𝗜𝗙𝗘 𝗟𝗘𝗦𝗦𝗢𝗡:
When a loved one passes away, even simple bank savings can become complicated if the family does not know the proper process.
So before withdrawing, transferring, or dividing the money among heirs, it is best to check with the bank and the BIR first.
Proper documentation protects the heirs, avoids disputes, and prevents future tax or legal problems.
𝗟𝗜𝗞𝗘, 𝗙𝗢𝗟𝗟𝗢𝗪 & 𝗦𝗛𝗔𝗥𝗘 for regular real estate tips, property due diligence reminders, estate settlement guidance, buyer protection updates, and practical information for property owners, heirs, buyers, sellers, and investors.
For more guidance, property selling assistance, due diligence support, and practical Q&A:
𝗦𝗮𝗺𝘂𝗲𝗹 𝗢. 𝗟𝗮𝗼
Licensed Real Estate Broker
License No. 1368
Samuel O. Lao and Associates
Mobile | Viber | WhatsApp: 0917 323 6123
Source basis: BIR RMC No. 62-2018 allows withdrawal from a deceased depositor’s bank account within one year from death, subject to 6% final withholding tax and presentation of the estate TIN and BIR Form 1904 stamped received by the RDO. RR No. 12-2018 also provides that if the bank deposit was already included in the gross estate and covered by eCAR, the withdrawal is no longer subject to that separate 6% withholding tax
Disclaimer: This post is for general information and educational purposes only. It is not legal, tax, accounting, or financial advice. Estate tax computation, bank release requirements, BIR procedures, deductions, penalties, and documentation may vary depending on the amount involved, date of death, residency of the deceased, type of account, heirs involved, and latest government rules. Please verify directly with the BIR, the concerned bank, and consult a lawyer, CPA, or qualified tax professional before making any decision.
