Inheritance and Gift tax in Spain 2015


28 Jan. 2015

Further to ECJ judgment case C-127/12 of 3 September 2014 ruling that Spanish Inheritance and Gift Tax provisions are discriminatory against non residents, Law 26/2014 modifying Non Resident Income Tax approved by the Spanish Government has put EU/EEA residents on an equal to Spanish residents in this sense. The Tax Law applicable now is the law of the Region where the asset of higher value is located.

The taxpayer is the one inheriting or receiving the donation. If the taxpayer is non-resident he/she will be liable only on Spanish assets (real estate, bank accounts, etc.). If the deceased is non-resident, the State remains as the place of taxation as prior to the tax reform but applying regional laws to calculate the taxes. Thus, tax form 650 must be still submitted to Madrid (State) and not to Regional Governments. Optionally, the taxpayer can chose for the State Law.

As a non-resident (deceased), regional allowances on main home or family business are not applicable because of its nature (by definition, the house of a non-resident cannot be the main home). In Andaluci­a, spouses and children are exempt from inheritance tax where the taxable value inherited is under 175.000 Euros and the wealth of the recipient does not exceed 402.678 Euros. This is not a threshold so a value above 175.000 Euros will be fully taxed.

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