The inheritance tax paid by non-residents

The inheritance tax is that which obligates the heirs to pay a tax above the inheritance received when a person dies. On the other hand, when a donation is received, the donation tax must be paid. Although they may be two totally different situations, the two are collected by the Inheritance and Donations Tax.
This tax follows an local legislation and generates several doubts, mainly for the non residents, as since 2014 a resolution of the Court of Justice of the European Union changed the situation that until then lived in Spain.

Judgment of the CJEU on inheritance tax

In 2011, the European Commission asked the CJEU to declare that Spain caused differences between heirs resident in Spanish territory and non-residents. Until then, when a heir lived outside Spain was applied a state regulation that had no bonuses. In contrast, residents in Spain benefited from the tax advantages granted by the autonomous communities.
The Court of Justice of the European Union, on September 3, 2014, ruled that the Spanish Inheritance and Donations Tax was contrary to Article 63 of the Treaty on the Functioning of the EU, which prohibits all types of restrictions on capital movements Between Member States.
From then on, heirs residing in any country of the European Union or the European Economic Area can benefit from the tax incentives of the autonomous communities.

I am a resident of Spain: In what autonomous community do I have to pay?

The inheritance and gift tax is paid in the autonomous community of residence of the deceased. The only exception is in the case of real estate, since then it must be paid wherever the property is.

How do non-resident inheritance tax?

From the European Union (EU) or the European Economic Area (EEA)

As mentioned above, with the 2014 ruling of the CJEU, a person who receives an inheritance in the Spanish State but resides in another country of the European Union pays in Spain the Inheritance and Donation Tax. It does so by complying with the regulations of the autonomous community in which most of the value of the goods is found.

Resident in a country outside the EU or EEA

The resolution that we have been explaining only affects the countries of the European Union or the European Economic Area. For residents of another country in the world, they must pay for the value of the assets located in Spain with the regulations of the State.
If you have doubts about any inheritance or donation, whether you are resident or not resident in Spain, GM Tax will analyze your particular case. We are specialists in all kinds of legislative matters in tax matters.

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