Inheritance Tax Refunds

Tax Refunds

If you have paid inheritance tax within the last four years in Spain and either you are, or the deceased was, a non resident in Spain, whatever the country of residence, you may be able to claim some kind of reimbursement.

Formerly Spanish Law established that all cases involving non residents would be ruled by Spanish State law, therefore denying non residents the option of taking advantage of any of those benefits ruled by the Comunidades Autónomas.

The European Court of Justice stated the Spanish system for inheritance tax was contrary to the principles of the EU of freedom of movement and freedom of establishment as it allowed different treatment of tax payers depending on where they, or the deceased, had their last residence, or where the assets were located

The refund may be of any excess caused by applying the Spanish State rule instead of that of the Comunidad Autónoma of the residence of the deceased or that of the beneficiary.
If both the deceased was and the beneficiary is a resident in a foreign country the law to compare the possible excess is that of the location of the most valuable assets.

It could be a considerable amount if your relationship is that of a spouse, parent or child, or if you have some kind of declared disability prior to the deceased’s death. Interest on the excess amount from the date of payment, can also be claimed.

The right to reclaim inheritance tax is due to a long proceeding that has taken place in Spanish inheritance tax for non-residents from the resolution of the European Court of Justice.

There are two main ways of reclaiming excess tax paid.

  • There is the possibility to claim on the basis of State liability for not altering the law in order to comply with the EU Law principles as Stated by The European Court of Justice.

    The period in which to make a claim as in any claim made on the grounds of State liability is one year from the date of payment and it is based on the fact that the tax payer had to make a tax payment under a law that was in force, but had been declared unfair without the State approving a new one.

  • More recently there are some resolutions which state that the entire tax liquidation is null and void, as it was done under the law that had already been declared contrary to EU principles. The claim in that case is that of an ordinary tax payer reclamation, and the deadline to do so is four years from the date of payment.
  • In both cases the amount to claim will be the difference between the amount that has been paid under State law and the amount which would be paid if the competent Comunidades Autónoma’s rule were applied.

    You can use the calculator to check this doing two calculations:

    .-Choose State law in the drop down list in «applicable law» box

    .-Note the results, then click edit form

    .-Now in the calculator choose the competent Comunidad Autónoma’s law instead of State law, without changing anything else.

    The difference will illustrate the amount to reclaim, plus interest from the date of payment, .

    Both proceedings start with a claim before the Spanish Administration, and therefore if the resolution goes against reimbursement or there is no resolution at all, the tax payer can then make a court claim.

    We can guide you through the entire process, in both instances, charging a fixed amount as deposit, then a percentage depending on results.

    • Any Questions?

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    Contact us for specific personal advice for your individual case