ESTATE TAX ON YOUR BANK SAVINGS
๐ค๐จ๐๐ฆ๐ง๐๐ข๐ก: ๐ช๐๐๐ง ๐๐ ๐๐๐ก๐ ๐ฆ๐๐ฉ๐๐ก๐๐ฆ ๐ข๐ก๐๐ฌ ๐๐ก๐ ๐ก๐๐๐ช๐๐ก ๐ก๐ ๐๐๐๐๐๐ฆ๐๐? ๐ ๐๐ฌ ๐๐ฆ๐ง๐๐ง๐ ๐ง๐๐ซ ๐ฃ๐ ๐๐? 
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, ๐ฏ๐ฎ๐ป๐ธ ๐๐ฎ๐๐ถ๐ป๐ด๐ ๐ฎ๐ป๐ฑ ๐ฏ๐ฎ๐ป๐ธ ๐ฑ๐ฒ๐ฝ๐ผ๐๐ถ๐๐ 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.
๐๐ก๐ฆ๐ช๐๐ฅ:
Estate tax is not automatically 6% of the full bank balance.
Under the Philippine TRAIN Law, estate tax is generally 6% of the ๐ป๐ฒ๐ ๐๐ฎ๐ ๐ฎ๐ฏ๐น๐ฒ ๐ฒ๐๐๐ฎ๐๐ฒ.
Meaning, the BIR first looks at the total estate, then applies allowable deductions.
๐ฆ๐๐ ๐ฃ๐๐ ๐๐ข๐ฅ๐ ๐จ๐๐:
Gross Estate
less Allowable Deductions
= Net Taxable Estate
Net Taxable Estate x 6%
= Estate Tax Due
๐๐ซ๐๐ ๐ฃ๐๐:
If the deceased person only left bank savings of โฑ800,000 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 โฑ5,000,000.
So in simple illustration:
Bank savings: โฑ800,000
Less standard deduction: โฑ5,000,000
Net taxable estate: โฑ0
Estate tax due: โฑ0
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.
๐๐ ๐ฃ๐ข๐ฅ๐ง๐๐ก๐ง ๐ฅ๐๐ ๐๐ก๐๐๐ฅ:
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
๐ช๐๐๐ง ๐๐ ๐ง๐๐ ๐๐๐๐ฅ๐ฆ ๐ก๐๐๐ ๐ง๐ข ๐ช๐๐ง๐๐๐ฅ๐๐ช ๐ง๐๐ ๐๐๐ก๐ ๐ฆ๐๐ฉ๐๐ก๐๐ฆ?
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However, the amount withdrawn may be subject to 6% final withholding tax.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.
๐ช๐๐๐ง ๐๐ ๐ง๐๐ ๐๐๐ก๐ ๐๐๐ฃ๐ข๐ฆ๐๐ง ๐ช๐๐ฆ ๐๐๐ฅ๐๐๐๐ฌ ๐๐ก๐๐๐จ๐๐๐ ๐๐ก ๐ง๐๐ ๐๐ฆ๐ง๐๐ง๐ ๐ง๐๐ซ ๐๐๐๐๐ก๐?
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.
๐ช๐๐๐ง ๐๐ ๐ ๐ข๐ฅ๐ ๐ง๐๐๐ก ๐ข๐ก๐ ๐ฌ๐๐๐ฅ ๐ก๐ ๐๐ฅ๐ข๐ ๐ง๐๐ ๐๐๐ง๐ ๐ข๐ ๐๐๐๐ง๐?
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.
๐ฃ๐ฅ๐๐๐ง๐๐๐๐ ๐๐จ๐๐๐ ๐๐ข๐ฅ ๐๐๐๐ฅ๐ฆ:
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.
๐ฆ๐๐ ๐ฃ๐๐ ๐๐ซ๐ฃ๐๐๐ก๐๐ง๐๐ข๐ก:
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.
๐ฅ๐๐๐ ๐๐๐๐ ๐๐๐ฆ๐ฆ๐ข๐ก:
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.
๐๐๐๐, ๐๐ข๐๐๐ข๐ช & ๐ฆ๐๐๐ฅ๐ 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.
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๐ฆ๐ฎ๐บ๐๐ฒ๐น ๐ข. ๐๐ฎ๐ผ
Licensed Real Estate Broker
License No. 1368
Samuel O. Lao and Associates
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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.
