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Nacho Escobar: Equal tax laws for residents and non-residents. Nacho Escobar: Equal tax laws for residents and non-residents.

Making sense of inheritance laws

With Lex Uiris Lawyers

LAST September, the European Court of Justice decided it was illegal to treat resident and non-resident EU citizens differently for inheritance tax purposes.

The court declared that ‘the Kingdom of Spain has failed to fulfil its obligations under Articles 63 TFEU and 40 of the Agreement on the European Economic Area of 2 May 1992.’

The court argued that to apply local regulations to a non-resident was not justified because ‘there is no difference between the objective situation of a resident and a non-resident that can support a difference in treatment.’

The problem is that inside Spain there are different tax law regulations for inheritance in the different autonomous communities (Andalucía, Balearics, Cataluña, Madrid, etc).

This raises the issue of which law would apply when a non-resident has more than one property or rights in more than one community (for example a British citizen who has a property in Andalucia as well as in the Balearic     Islands).

Therefore, the Spanish Government has approved a new law regulating this point which states the tax law to be applied is the one from the autonomous community where the highest value   assets are held in Spain.

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