Spanish inheritance tax for non-residents

The new law and what it might mean for you

Inheritance Tuesday, March 17, 2015
Spanish inheritance tax

It’s been a recurring theme in the news, non-residents have been treated differently to residents when it comes to Spanish inheritance tax. After plenty of public attention, at last the law in Spain has been changed.  

The Spanish inheritance tax law that applied to residents and non-residents used to be different in Spain. Traditionally, a resident leaving property to another resident had very little, if anything, to settle before taking possession of their inheritance.

However, a non-resident who died and left property to another non-resident could expect that their inheritor would have quite a hefty Spanish inheritance tax bill to pay.

As long ago as 2010 Spain was told by the European Commission that their practice was discriminatory against non-residents and as such, must change. However, it took further protestations before the law was actually amended in Spain.

This has now happened for non-residents in Spain who are residents in countries that are members of the European Union. A modified law was passed on the 28th November 2014 and applies to all bereavements and donations occurring after January 1st 2015. According to this new law, the Spanish inheritance tax for non-residents must not be discriminatory.  

The new law

This new law means that all EU citizens will be able to choose to be taxed in the same way as a resident in Spain according to the regional rules that apply.

There will still be differences across regions as there are different regulations within them. However, it will bring Spanish inheritance tax for non-residents in line with residents in each region. Both will pay the same, eliminating any kind of discrimination.  

Claiming if you’ve already paid

The message is clear for those receiving an inheritance or a donation from a bereavement in 2015 onwards.  However, what should you do if you inherited or received a donation prior to January 2015? Can you claim back the additional money you paid?

There are instances where you can claim a refund of Spanish Inheritance Tax. We are currently advising people that it is worth requesting a tax refund in cases where the following criteria apply:  

  • They paid more than 4,000€ of inheritance tax
  • They paid the tax within the last four years
  • The relationships between the deceased and the inheritors meant that they were either:
  • Descendents of the deceased: children – grandchildren
  • Ascendants of the deceased: parents – grandparents
  • Spouse
  • The deceased or the inheritors were non-residents

If all these criteria apply then there is a legal and financially viable reason to reclaim the Spanish inheritance tax paid.

If this applies to you and you would like to claim, you should contact a solicitor who is accepting this kind of work.  Take with you a copy of form model 652  (inheritance tax declaration) and the inheritance deed.

The changes have been long awaited by many people and they were inevitable in the end. At least now we have a general approach to inheritance tax that should cut down on some of the confusions of the past.

More information

If you have further questions, would like more information or a call back please visit our ‘contact us’ page.

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