FACTS
The deceased Thomas Hanley's real estate properties were put in a trust to last for 10 years as per his will, with Moore initially being appointed as executor. He was subsequently replaced by Lorenzo, who was assessed by the CIR an inheritance tax in the amount of P1,434.24 which, together with the penalties for deliquency in payment and a surcharge of 25 percent on the tax, amounted to P2,052.74.
Lorenzo paid the assessment under protest and filed a claim for refund, arguing that the inheritance tax should be based on the value of the estate 10 years after the death of the testator.
RULING
The Court ruled in favor of the CIR.
Pursuant to Sec. 1544 of the Tax Code, the inheritance tax should have been paid before the delivery of the properties in question to Moore as trustee.
A transmission by inheritance is taxable at the time of the predecessor’s death, notwithstanding the postponement of the actual possession or enjoyment of the estate by the beneficiary, and the tax measured by the value of the property transmitted at that time regardless of its appreciation or depreciation.
The SC likewise stressed that the obligation to pay taxes rests not upon the privileges enjoyed by, or the protection afforded to, a citizen by the government but upon the necessity of money for the support of the state. For this reason, no one is allowed to object to or resist the payment of taxes solely because no personal benefit to him can be pointed out.
