FACTS
Hugo Miller, an American doing business in the Philippines who was subsequently taken as a prisoner and executed by the Japanese soldiers during WWII, lived at the Manila Hotel and later at the Army and Navy Club while he was still alive.
Upon his death, he left behind several properties, including real estate, cash, and stocks in US and Philippine corporations. In his will, however, he listed Sta. Cruz, California as his residence.
Testate proceedings were instituted in the US, followed by ancillary proceedings here in the Philippines. The Collector assessed estate and inheritance taxes (amounting to P77300.92) to which De Lara, the administrator of the Estate, protested. The CTA held Miller’s estate liable only for the estate taxes due. Both parties appealed.
RULING
The Supreme Court ruled in favor of the Estate of Hugo Miller.
At the time of his death, Miller was not a resident of the Philippines. For estate and inheritance tax purposes, the term “residence” is synonymous with the term domicile.
In US jurisprudence, for purposes of estate and taxation, “residence” is interpreted as synonymous with domicile and that the incidence of estate and succession has historically been determined by domicile and situs and not by the fact of actual residence.
It is clear that being a non-resident of the Philippines, the only properties of his estate subject to estate and inheritance taxes are those issued by Philippine corporations.
