CHP 4: PROPERTY RELATIONS
TRANSFER TAX 2nd Sem | Sir Lazo PRELIM
PROPERTY RELATIONS In the event the couple did not agree upon a
system before their marriage, the rule is:
The system of property relationships is
applicable only to married people. Before Aug 3, 1998 CPG
It is used to distinguish a conjugal or On or after Aug 3, 1998 ACoP
community property from an exclusive
property.
VOID stipulation - Stipulations in the
Under Art 74 of Family Code, property settlements or contracts in consideration of a
relationship between husband and wife shall future marriage, including donations between
be governed in the following order: the prospective spouses made if the marriage
does not take place.
1. By marriage settlements executed before VALID stipulation - Stipulations that do not
marriage depend upon the celebration of the marriages
2. By the provisions of law If the decedent was married and has a
surviving spouse, the property in the gross
3. By the local custom estate must be classified as either conjugal or
exclusive property.
Types of Property Relations or Marriage This classification helps determine the
Settlement surviving spouse’s share in the net
conjugal property and the net taxable
estate of the deceased.
The future spouses may, in the marriage
settlements, agree upon the following systems
of property relationship: Conjugal Owned jointly by both
spouses
1. Absolute community of Property (ACop) Exclusive Belongs solely by one
spouse
2. Conjugal partnership of gains (CPG)
3. Complete separation of property Absolute Community of Property (Acop)
4. Any other regime
MOST COMMON REGIME IN PH
It is the default marital regime if the
In order that any modification in the marriage spouses do not have a valid marriage
settlements may be valid, it must be made settlement.
before the celebration of the marriage. Aligns with PH customs and promotes
family unity
It shall be in WRITING Shall commence at the precise
Signed by parties and executed moment marriage is celebrated
before celebration of marriage Any stipulation for commencement of
Shall not prejudice 3rd Person unless community regime at any other time
registered in local civil registry shall be VOID
Provisions of Co-ownership shall
apply
Law Governing Property Relations
The spouses become co-owners of
Family Married on/aft Aug 3, 1988 All property they bring into the marriage
Code
Acquired by each or both during marriage,
Civil Code Married before Aug 3, 1988 save for the exceptions expressly enumerated
by law
CHP 4: PROPERTY RELATIONS
TRANSFER TAX 2nd Sem | Sir Lazo PRELIM
3. by either spouse who has legitime
descendants by former marriage
and the fruits & income
Community Property under ACop (Art
91) NOTE: Property acquired during the
marriage is presumed to belong to the
By default, community property includes community, unless it is proved that it is one
all property owned by the spouses at the of those excluded therefrom.
time of marriage and those acquired
afterward.
This applies unless otherwise stated in
the law or a valid marriage settlement.
or/ it can be proven to be exclusive
property.
Exclusive Property under ACop (Art 92)
Property acquired during marriage
1.
by gratuitous title & its fruits,
income
Conjugal partnership of Gains (CPG)
Unless the donor, testator, or grantor
expressly provided that it be part of Under this system, husband and wife
community. place in a common fund the
proceeds, products, fruits and income
The classification of fruits or income shall
from their separate properties and
depend on the classification of the principal
those acquired by either or both
or source. of the fruits.
spouses through their efforts or by
Therefore, if the income or fruit came from chance.
exclusive property, the fruits or income shall Upon dissolution of the marriage or of
likewise be classified as exclusive property. the partnership, the net gains or
benefits obtained by either or both
NOTE: Fruits from labor of either spouse spouses shall be divided equally
shall always form part of community or between them, unless otherwise
conjugal property. agreed in the marriage settlements
Property for personal and CPG APPLIES (Art 105)
2.
exclusive use of either spouse
1. When the future spouses agree to it
Personal belongings (e.g., clothing, shoes, in the marriage settlement; or
and apparel) used exclusively by either spouse
2. To conjugal partnerships of gains
is considered exclusive property, regardless
already established between
of how they were acquired.
spouses before the effectivity of
Property acquired during marriage using the Family Code (August 3, 1988),
exclusive funds or exchanged for exclusive without prejudice to vested rights.
property remains exclusive property.
NOTE: However, jewelry shall form part of Exclusive Property under CPG (Art 109)
the community property.
1. That which is brought to the marriage as
Property acquired before marriage his or her own.
CHP 4: PROPERTY RELATIONS
TRANSFER TAX 2nd Sem | Sir Lazo PRELIM
2. That which each acquires during
marriage by gratuitous title.
3. That which is acquired by right of
redemption or by exchange with property
belonging to only one of the spouses.
4. That which is purchased with the
exclusive money of the wife or of the
husband.
Conjugal Property under CPG
All property acquired during the marriage,
Conjugal Deductions
wither the acquisition appears to have been
made, contracted or registered in the name of
one or both spouses, is presumed to be Whether under absolute community of
conjugal unless the contrary is proved. property or conjugal partnership of
gains
Acquired Property bought during the
by marriage using the common
Onerous fund, whether for both The support of the spouses,
Title spouses or just one. Support their common children, and
legitimate children of either
spouse.
obtained by labor, industry, or
Income
work or profession of either or
from Debts contracted during
both of spouses
work marriage by the designated
Debts for
administrator spouse for the
Conjugal
Any income or fruits from benefit of the conjugal
Partnersh
Fruits of conjugal or exclusive property partnership, or by both
ip
Property are considered to be conjugal spouses or one with consent of
property regardless of source the other.
The share of any hidden Debts and obligations
Hidden
treasure discovered during Family- contracted by either spouse
Treasure
marriage, law award to them Benefitin without the consent of the
g Debt other to the extent that the
Occupatio Property acquired by job such family may have benefited.
n-Based as hunting or fishing
Property Taxes & All taxes; liens, charges, and
Exp on ‘expenses including major and
Any increase in livestock Conjugal minor repairs upon conjugal
Excess beyond what each spouse Property property.
Livestock originally brought into the
marriage Preservat Taxes and expenses for mere
ion of ‘preservation made during the
Winnings from gambling or Separate marriage, upon the separate
betting belong to the conjugal Property property of either spouse.
Gains by partnership,
Chance Self- Cost to enable either spouse
but losses are borne solely by Improvem to start complete a
the losing spouse. ent professional, vocational, or
Expenses other activity for self-
improvement.
Pre- Debts before marriage of
CHP 4: PROPERTY RELATIONS
TRANSFER TAX 2nd Sem | Sir Lazo PRELIM
Marriage either spouse in so far as they
Debts have rebounded to the benefit
Benefitin of the family.
g the
Family
Donations Donations or promises made
for by both spouses for their
Children’s common child’s professional
Education or vocational education or self-
improvement.
Litigation Expenses for litigation
Costs between spouses, unless the
suit is groundless.
Important Notes
Obligations during marriage are
presumed to have benefited the
family and are treated as conjugal
deductions.
Pre-marriage debts are
exclusive deductions, unless
they benefited the family.
Complete Separation of Property
Deductions related to the family
home, medical expenses, and
The spouses shall be governed by complete
standard deductions come from
separation of property if the future spouses
the net estate (both conjugal and agree in the marriage settlements that their
exclusive property) to calculate the property relations during the marriage shall be.
net taxable estate. governed by the regime of separation of
property.
Other deductions depend on
whether they are related to To each spouse shall belong all earnings from
conjugal or exclusive property. his or her profession, business or industry and
all fruits, natural, industrial, or civil, due or
Wagering losses during marriage
received during the marriage from his or her
are borne by the losing spouse, separate property.
but winnings are conjugal
property. Both spouses shall bear the family expenses in
proportion to their income, or, in case of
Fines or damages imposed on
insufficiency or default thereof, to the current
either spouse are charged against
market value of their separate properties.
their exclusive property.
The liability of the spouses to creditors for
family expenses shall, however, be solidary.
Property Regime of Union w/o Marriage
A. Capacitated to Marry
When a man and a woman who are capacitated
to marry each other, live exclusively with each
other as husband and wife without the benefit
CHP 4: PROPERTY RELATIONS
TRANSFER TAX 2nd Sem | Sir Lazo PRELIM
of marriage or under a void marriage, the
following rules shall apply:
1. Wages and salaries shall be owned by
them in equal shares.
2. Property acquired by both of them through
their work or industry shall be governed by
the rules on co-ownership.
3. Neither party can encumber or dispose by
act inter-vivos his or share in the property
acquired during cohabitation and owned in
common, without the consent of the other,
until after the termination of their
cohabitation
NOTE: Unless proven otherwise, properties
acquired during cohabitation are presumed
to be jointly obtained and owned in equal
shares.
A party who did not directly participate in
acquiring property is still considered to have
contributed if their efforts were focused on
caring for and maintaining the family and
household.
B. Incapacitated to Marry
1. Only the property acquired by both of
them through their actual joint
contribution of money, property or
industry shall be owned in common in
proportion to their respective contributions.
(If silent, assume equal shares).
2. The share of any party who is married to
another shall accrue to the absolute
community or conjugal partnership, as the
case may be, if existing under the valid
marriage.
Illustration
A decedent died on February 29, 2020. The
following assets were provided for the purpose
of determining the decedent's gross estate. If
the item is an inclusion in the gross estate of
the decedent, classify the same as exclusive by
writing “E” or community/conjugal property by
writing “C” under the regime of conjugal
partnership of gains (CPG) and absolute
community property (ACP). If the item is an
exclusion from the gross estate, mark the item
as “X”
