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
considerable 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.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The personal representatives, who are responsible for administering the estate of someone who has died, generally require a Grant of Representation to allow them to collect in, sell and distribute the deceased's assets.
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