The National Taxation Bureau of the Northern Area, Ministry of Finance（NTBNA） indicated that listed or over-the-counter (OTC) stocks left by a decedent are considered part of the gross estate and must be reported for estate tax in accordance with the Estate and Gift Tax Act.
     For dividends received by the heir after the decedent's date of death, it's crucial to determine whether the date of the decedent's death or the ex-dividend trading date came first. This determines if the dividends should be reported as rights of claim (receivable dividends) belonging to the decedent or as dividend income for the heir.
     The NTBNA provides the following examples to clarify:
*Example 1: Mr. Jia died on July 1, 2024, leaving behind stocks from Company A. The ex-dividend trading date for Company A was June 20, 2024, and the dividend payment date was July 18, 2024. Since the ex-dividend trading date was before Mr. Jia's date of death, the right to receive the cash dividends belonged to him. The cash dividends that were due but not yet received are considered rights of claim of the decedent and should be included in the gross estate for estate tax purposes.
*Example 2: Mr. Bing died on June 1, 2024, also leaving behind stocks from Company A. The ex-dividend trading date for Company A was June 20, 2024, which occurred after Mr. Bing's date of death. In this case, the cash dividends distributed on July 18, 2024, are considered dividend income for the heir. The heir must include these dividends with their other incomes for the year when filing their Individual Income Tax Return.
     The Bureau would like to remind taxpayers that if they have any questions, they are welcome to visit the official website at  NTBNA for relevant regulations or call the toll-free service number 0800-000321.
〔Contact person: Ms. Chung, Section Head of Individual Income, Estate and Gift Tax Division；Tel:（03）3396789 ext. 1420〕