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Return of inheritance and gift tax for residents of EU countries

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November 5, 2015

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Non-residents in Spain and residents of countries in the European Union may claim a refund for the amount ofinheritance and donations tax paid in excess, if they experienced discriminatory treatment in the application of the law when they receiving inheritance or donations of goods in Spain during the last years.

Non Residents in Spain, as well as those Residents in Spain that inherited from a Non Resident, used to pay Inheritance and Gift Tax in Spain according to the National Legislation, while those tax payers that were Resident in Spain, receiving inheritance from another Resident, were able to benefit from the Regional Legislation of the region in which the deceased had his or her domicile before their death, being entitled to a series of tax cuts.

This has led to situations where, for example, one brother resident in Spain, and his father resident in Andalusia, paid notaxes in Spain by the acquisition by inheritance of a property valued at € 170,000 upon application of the regional rules, while the other brother, paid taxes for the acquisition of that property by the mere fact of him living in the UK, due to the applied state regulation..

In the end, the Court of Justice of the European Union considered this contrary to the principles of free movement of people and capital within the European Union regulations. Therefore, further steps to alleviate such situations were introduced.

After the new connection points were introduced in late 2014, the rules of the Autonomous Community of residence of the deceased or, with the non-resident decedent, where the inherited assets of the highest value are located will apply. These can also be applied to non-residents in Spain but residing in any country of the European Union.

Requesting the refund for the amount paid

As we have mentioned, the entry into force of this legislation will occur on the 1st of January 2015. However, we esteem that, from this date and as long as the period of statutory limitations has not been reached, European Union residents that have been on the receiving end of discriminatory treatment due to internal Spanish legislation will be able to apply for the return of the sums paid, in application of the regional legislation that would have been applicable if they had been residents in Spain.

At Lexland we have team of specialists who handle these types of claims, so if you are resident in the EU or, being resident in Spain, were not able to benefit from the regional legislation, due to the deceased being resident in another EU country, call us and we wil advise you regarding the convenience of applying for the return of the Inheritance and Gift Tax that is due to you.


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