BIR Ruling No. 695-2019

BUREAU OF INTERINAL REVENUE REPUBLIC OF THE PHHUPPINES DEPARTMENT OF FINANCE

Quezon City

Sections 27 (D) (5), 98, 105, 196, BIR Ruling No. 051-2015 Code of 1997, as amended all of the National Internal Revenue NOV Z 1 ZU9 0so5-Zut5

Rockwell Center, Makati City PUYAT JACHNTO ASANTOS i 0/F 8 Rockweli, Hidalgo corner Piaza Drives.

Atiention: ATTY VIRGINA B. VIRAY

ATTY.KRISTIANNE S. MAGAT

Gentiemen:

Rosa Maria Diaz Aboitiz ("Aboitiz"), requesting confirmation that the reconveyance of propervy under a Trust Agreement is exempt from capital gains tax, documentar ystamp tax, and the corresponding withhoiding tax. This refers to your ieter dated January: 26,. 2016 in behalf of your client

Unionbank of the Philippines -- Trust and Investment Services Group ("Unionbank" the following, among others: "Trustee") entered into a Trust Agreement for a revecabie living trust account which provides Docunents submitted disclosed that on Nervemter 2, 2011, Aboitiz ("Trustor) and

INVESTMENT PORTFOLIO

1. Delivery of the Fund - Upon execurion of this .Agreement, the TRUSTOR hereby entrusted, delivered and remitted to the TRUSTEE the amount of FOUR MILLION PHILIPPINE PESOS (PHP4.000.000.00), credited t% a-Trust account designated as "UNIONBANK OF THE PHILIPPINES TRUST ACCOUNT NO. IBI-403-11 "

hereafter be designated and referred to as the "PORTFOLIO". For purposes of this Of stock, and other financial instruments. as such securities, real estate properties, club shares in which sums are invested, the proceeds, interest, dividends and income or prefits realized from management. investment and reinvestment thereof shall constituie the managed funds and shall Agreement, the term "securities " shall be deemed :c inelude commercial paper, shares 2. Composition -- The cash which the TRUSTOR has delivered to the TRUSTEE as well

discretion of the TRUSTOR, the latter may deliver additional funds to the TRUSTEE and physical delivery to the TRUSTEE of cash - it he required for any addition to the PORTFOLIO 3. Additional delivery of funas - At any time herearter and from time to time at the which shall form part of the PORTFOLIO and shll be subject to the same terms and Sonditions of this Agreement. No formalities other ihan a letter from the TRUSTOR

shail hold the same in its capacity as Trustee and it shai: have the authority to exercise the powers granted under the Trust Agreement, to wit: Aiso, under the Trust Agreement, Aboitiz shail entrust properties to Unionbank which

RCS4 MARIA DiAZ ABOITIZ (c/o Puyat Jacinto& Santos} NOV 2 1 2019

POWERS AND DUTIES

pledge of deposits or of deposits substitutes. or mortgage and chattel mortgage bonds. instrument shall contain the foilovving minimum inforimation: (a) The transaction to be entered into, (b) The amount involved, and (c) The name of the issuer, in case of Securities and/or the name of the borrower arid nature of security, in case of loans; other evidences of indebtedness or obiigations che servicing and repayment of which are fully guaranteed by the Republic of the Philippines or loans against such government securities, (2) Loans fuily guaranteed by the government as to the payment of the principal and interest, (3) Loans fully' 5ecured by hold out on assignment or :4) Loans fully secured by real estate and chattels in accordance with Section 78 of R.A. No. 337, as amended, and (5) Such other investiments or loans as may be directed or authorized by the TRUSTOR in a separaie Agreement; Provided, that said written 6. Powers of the TRUSTEE - Th2 TRLS?E- :s hereby conferred the following powers: To invest or reinvest the PORTFOL: i.. 1 Evidence of Indebtedness of the Republic of the Philippines and of the Bangk :ernral ng Pilipinas ("BSP"), and any

!a) To endorse, sign or execute any and all securities, documents or contracts necessary for or cornected with the exercise of the powers hereby conferred or the performance of the acis hereby authorized.

{b! To cause any property of the PORTFOLIO to be issued, held or registered in the mame of the TRUSTOR or of the TRUSTEE, piovided that in case of the latter the instrument shall indicate that the TRUSTEE is acting in a representative capacity and that the TRUSTOR's name is disclosed thereat;

XXX XXX XX.K

in a condominium unit, as fotlows: Account No. On Novemher 15. 2011, Aboitiz wrote a letier to Unionbank, in relation to Trust authorizing the latter to invest the funds of the said Trust Account

Condominium Certificate of 71200 (issued by the Registry of Deeds.of Makati Titie No. City)

Registered Owner First Philippine Holdings Corporation

Address Condominium, 21 Residential Drive, Rockwell Unit Nos. 38-A and 39-A Luna Gardens Center. Makati Cit

Number of Car Parking Slots Car Parking Slot Nos. Purchase Price Floor Level Floor Area Four Hundred Forty-Nine Square Meters FIFTY-EIGHT MILLION PESOS [Pht Thirty-Eight (38) 1419, 1420, 1421 (499 sg. m.) Three (3)

Cerporation and to carry out and effect any and ail iegal acts required to accomplish the above- described transaction. Thus, on November 17, 2011, Unionbank has entered' into a Deed of of value added tax (VAT) (PhP Condominium Unit for the sum amount of Absolute Sale with First Philippine Holdinos Co:naratinn aomnirinn tha nhnue-mentioned The same letter also authorized Unionbank to transact with First Philippine Hoidings 0)l. Thereafter, Condominium Certificate of Title inclusive

+ See Cash Fiow (Arnex "A"), Investment Activity Report (Annex "B), Schedule of Investments/Por+f ""), income Statement (Annex "D", and Batarce Sheet (Annex "E"), ll for Trust Account No. -:overed October 27 -- December 2011. Tysis (Annex the period O

PAGE 2OF S

ROSA MARIA DIAZ .4BOITIZ(c/o Puyat Jacinto & SaNios} NOV 2 1 2013

Unicnbank as Trustee of Trust Accouin: No. O 3 was issued by the Registry of Deeds for Makati City, under the name of

owner, Aboitiz, was without monetary consideration. Aiso, there is no change in the beneficial Ownersnip. Hence, this request. to term inate the Trust Accourt resulting in reconveyance of the Condominium Unit to its true Acccunt and, thus, reconvey the Condominium Urit to i's true owner, Aboitiz. The agreement On December 10. 2015. Aboitiz and Unicnbark has agreed to terminate the Trust

withholding tax prescribed in Revenue Regulations (RR) No. 2-98, as amended, considering and confirms the legai title and beneficial ownership over the property in the name of Aboitiz, that the conveyance is not motivated by a valuable consideration and merely acknowledges the Trustcr. er title of the afore-stated prcperty by Unionbank in favor of the beneficiary, Aboitiz, who is the beneficial owner thereof is not subject to capi:al gains tax imposed under Section 27 (D) (5) of the National Internal Revenue Code of i997. as amended, nor to the creditable in reply thereto, please be informed that your cpinion is hereby confirmed. The transfer

Moreover, in BIR Ruling No. 031-99 dated March 19, 1999, this Office has already ruiea tnat:

be treated as another transfer separate and disiinct from the sale between the original owner and the Trustee. The conveyance is merely to be treated as a beneficiary of the subject properties. " properties which the former acquired by virtuie of the Trust Agreement is not to continuation and confirmation of title in favor of the ultimate and real : . the conveyance by the Trustee in favor of the Trustor of the subject

executea to terminate the trust relationship between Unionbank and Aboitiz and the Furthermore, the Termination of Trust Agreement and Reconveyance of Assets

consclidation of the legal title and beneficial ownership over the subject property is a conveyance without monetary consideration, and as such not subject to the documentary stamp tax imposed under Section 196 of the National Internal Revenue Code of 1997, as amendedj However, the notariai acknowledgment to such instrument is subject to the documentary stamp tax of P15.003 under Section 188 of the same Code.

if upon investigation it will be disclosed that the facts are different, then this ruling shall be This ruling is being issued on the basis of the foregoing facts as represented. However,

considered null and void.

Very truly yours. 80N

CAESAR R. DULAY

S-K-I-LMAT Commissioner of Internal Revenue 030450

2 BiR Ruling No. 051-2015 dated February 24, 2015. 3 The old rate of P15.00 was used since the transaction took place pricr to tire effectivity of RA No. 10963 (TRAIN Law).

PAGE 3 OF 3