RMC No. 72-2026: Clarifying the Tax Treatment of Transfers of Proprietary Club Shares held under Nominee or Trust Agreements, Dispensing with Prior Confirmatory Ruling Subject to Post-Audit Verification

Key points

1. No CGT. Transfer of legal title from one nominee-trustee to another is not subject to Capital Gains Tax under Section 24(B)(3) of the Tax Code, if there is no sale, exchange, or other disposition involving beneficial ownership and the trustor-corporation stays the beneficial owner. The trust must be shown by clear and convincing evidence, such as a trust agreement, proof the corporation paid for the share, recording as a corporate asset, and no personal beneficial interest of the nominee.
2. No DST or Donor’s Tax. Such a transfer is not subject to Documentary Stamp Tax under Section 175 if there is no transfer of beneficial ownership. It is also not subject to Donor’s Tax, since the corporation remains the beneficial owner.
3. No prior confirmatory ruling. The prior ruling is dispensed with, without prejudice to post-audit verification and the substance-over-form doctrine, if four conditions are strictly met: the corporation remains the beneficial owner, a Declaration of Trust or Trust Agreement documents the transfer, the share is recorded as a corporate asset, and no monetary or non-monetary consideration goes to the outgoing or incoming nominee.
4. Non-compliance. Misrepresentation or failure to comply subjects the transaction to the applicable taxes, penalties, and surcharges, including possible recharacterization of the transaction.
5. eCAR application. Taxpayers apply for an eCAR directly with the RDO having jurisdiction over the share’s issuer, through the ONETT Section. Required are a notarized Deed of Assignment/Transfer between the nominees, the original and new Declarations of Trust or Trust Agreements, proof the corporation paid for the share and carries it as a corporate asset, and a Secretary’s Certificate or Board Resolution confirming no monetary consideration and no transfer of beneficial ownership.
6. Pending rulings. Pending confirmatory ruling applications on these transfers will no longer be acted upon, and applicants may go directly to the RDO for the eCAR if they meet the documents and conditions.

Who is affected

• Corporations holding proprietary club shares through nominees or trustees
• Outgoing and incoming nominee-trustees

Deadlines and effectivity

• Issued: June 30, 2026