The Section 12 of Revenue Regulation No. 12-2018, which incorporates the amendments introduced by the Tax Reform for Acceleration and Inclusion (TRAIN) Law, provides that the “general renunciation by an heir, including the surviving spouse, of his/her share in the hereditary estate left by the decedent is not subject to donor’s tax, unless specifically and categorically done in favor of identified heir/s to the exclusion or disadvantage of the other co-heirs in the hereditary estate.”
However, as per Revenue Memorandum Circular No. 94-2021, the BIR also clarified that when an heir waives or renounces his/her share to only identified properties but not to the entire properties forming part of the estate of the decedent, donor’s tax shall likewise be imposed on the value forgone as a result of such waiver or renunciation.
The net value of inheritance or value forgone as the result of such renunciation is the difference between the value of supposed rightful share against the value of property he/she actually received. Hence, the value foregone in excess of the Php250,000 threshold will be subject to 6% donor’s tax.
Source: RMC 94-2021