Does Spanish Inheritance and Gift Tax refund apply to you?

Non-resident beneficiaries of Spanish assets have the opportunity to apply for a tax refund.

If you were a beneficiary of someone who left assets in Spain but you were not yourself a resident of Spain you may have paid a higher rate of inheritance tax and may be due a refund since a ruling in the European Court of Justice in September 2014 which decided that the difference applied between residents and non-residents with regard to the application of inheritance tax and gift tax was discriminatory. The Spanish legislator has therefore been obliged to amend the inheritance tax law. 

Tax refunds are allowed for individuals who paid the higher rate of inheritance and gift tax which was payable by non-resident beneficiaries between 1 January 2011to 1 January 2015.

Prior to the European Court’s decision the amount of inheritance tax was calculated in accordance to the rules of the State for non-residents and for non-residents the rules of Spain’s 17 autonomous legislators applied, resulting in a considerably higher rate of tax for non-residents. The European Court of Justice took the view that the differential in the rates of tax was against the principle of the European citizen’s freedom of movement, and therefore was unacceptable.

New regulations dating from 1 January 2015 decree that the amount of inheritance tax payable by non-residents in Spain will be determined by the local autonomous region in which the majority of the deceased’s estate is located or the region in where the deceased resided. The same rule will apply if an EU or EEA citizen who is non-resident in Spain has received a gift of property in Spain, in that case, the law of the autonomous region where the property is located will apply.

It will come as no surprise to learn that filing a claim for a tax refund is quite complex with specific procedures and unmissable deadlines. Furthermore, if your claim is missing any essential information there is a risk that it will be rejected by the tax authority and you may lose the right to re-apply, so it is vital that the application absolutely accurate with all the correct supporting evidence taking into account the variation of circumstances from one case to another. Applicants are wise to use the services of a Spanish lawyer to assist them. 

Giambrone has experienced Spanish tax lawyers who are fluent in English and other languages who will be able to deal with all the necessary procedures and will ensure all relevant documentation is presented in a timely manner to make the claim on your behalf. Should you wish to know more about how to make a claim for a Spanish inheritance or gift tax refund our lawyers will be pleased to discuss your individual circumstances. 

For more information please complete the on-line enquiry form to the right of the page or contact our client services team on +34 932 201 627 or +44 (0) 20 7183 9482, or you can email Barcelona@giambronelaw.com or clientservices@giambronelaw.com