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REVENUE MEMORANDUM CIRCULAR NO. 94-2021 issued on August 10, 2021 clarifies the computation of Donor’s Tax in case the heir waves/renounces his share from the specific property forming part of the estate of the decedent.
                 General renunciation of an heir on his/her share from the inheritance is not subject to Donor’s Tax. However, there are instances where in the settlement of the estate of the decedent, instead of all the heirs receiving their respective shares in all the properties of the decedent, the heirs will agree among themselves for a specific property that each one of them will receive. In this scenario, there will be an heir who will receive a share lower or higher than the value of what should have been his rightful share in all the properties of the decedent. In this case, there is actually a partial renunciation of inheritance since the heir is waiving his share to only identified properties but not to the entire properties of the decedent. Hence Donor’s Tax shall be imposed on the value forgone as a result of such waiver/renunciation.
                       For uniformity, an illustrative example of the manner of computation of Donor’s Tax involving the above-scenario is specified in the Circular. The said computation shall be applied consistently throughout all offices processing One-Time Transactions involving estate of decedent.