Legal tip 1308. Paying higher Spanish IHT tax due to being a non-resident? A refund is possible!
Tuesday, June 30, 2015 @ 4:19 PM
Our Spanish Constitutional Court has recently declared unconstitutional the requirement of Article 12a of the Valencian IHT Act. This article established a 99% bonus on the taxable amount in the hereditary acquisitions for close relatives of the deceased ALWAYS provided they had habitual residency in Valencia.
This Court decision is in line with the judgment of the Court of Justice of the European Union issued on September 3, 2014 (Case No. C-127/12), in which the Court finds that the Kingdom of Spain has failed to fulfill its obligations concerning free movement of capital by allowing differences in the tax treatment of donations and successions between beneficiaries and grantees depending on residency.
Constitutional Magistrates understand, that residency lacks any legitimizing justification as an element of differentiation and therefore this requisite was not only against principle of equality (Art. 14 Spanish Constitution) but also a breach of fair tax system ( art. 3.3.1. SC)
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If you paid IHT in Spain during the last four years, a refund claim might be possible if you paid in excess due to being a non resident.
We can check out your IHT payment and advise you on this. Initial appraisal has no charge.
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Guadalest, Alicante, Valencia, Eastern Spain