Female Focus
Page 7
FF - Your community magazine
The European Court of Justice puts an end to IHT discrimination
The European Court of Justice’s decision from the 3/9/2014 (case C-127/12) puts an end to the discrimination of the non-residents, where they were paying more Inheritance and Gift Tax in Spain than the residents, and it opens the way for those who have paid excessive taxes and can request a refund. This sentence was pronounced in an action brought by the European Commission, who has been warning Spain, that its Inheritance and Gift Tax Regulations infringe Community Law by setting obstacles to the free movement of people and capital. The Inheritance and Gift Tax is a state tax, and for inheritances or donations between immediate family members a progressive rate is applied from 7,65% to 34% (in Spain). However, for inheritances or donations between residents in Spain the tax is transferred to the Autonomous Regions, which introduced some tax benefits applicable exclusively to their residents, something that Comunidad Valenciana has done and where in some cases no IHT is paid at all. The discrimination comes when the heir, the donee or the causative party are non resident, or when the donation is a property located oversees. The SECJ declares that the state legislation, by allowing such a different treatment, constitutes a restriction on the free movement of capital, prohibited by articles 63 SECJ and 40 from the EEA Agreement (comprised of the EU and Norway, Iceland and Liechtenstein). Following the sentence, Spain is obliged to reform its legislation.
What can I do if I did pay more? Could I claim that money back? People who have paid the tax on inheritances or donations with non-residents, applying the state regulations (up to 34% between immediate family members) and without being able to apply the tax benefits of any Autonomous Region with which there is a connection, can request a reimbursement of what was paid in excess. If you are one of those, we recommend you to request legal or fiscal advice on this matter. This article is very general and only for information purposes.
PELLICER & HEREDIA Solicitors are happy to advise you on this matter. If you would like to arrange an appointment at any of our offices, please feel free to contact us on 965 480 737, 606 056 282 or by email at
info@pellicerheredia.com. You could visit our web site at
www.pellicerheredia.com to watch our videos and learn the facts.
article on page 39
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