Following the ruling of the European Court of Justice in September 2014, which found Spanish Inheritance Tax to be discriminatory and in breach of EU law, thousands of Brits who have paid inheritance taxes in Spain could be entitled to a refund of up to 100% of tax paid.
Could You be eligible for a Spanish Inheritance Tax refund?
How will this Spanish Inheritance Tax Ruling affect people in the UK?
With so many people from the UK owning property and assets in Spain, this affects thousands of people from the UK who have inherited from relatives who had assets in Spain.
It is very common to have to pay Inheritance Tax in Spain as the thresholds and allowances for Inheritance Tax in Spain are much lower than for inheritance tax in the UK.
People commonly affected are those who have inherited from a parent who owned a property in Spain. Also a surviving spouse when their husband/wife passed away with Spanish property or assets in their joint or sole name will have been affected as there is little exception from the tax for husbands and wives unlike in the UK.
This ruling affects people who were not residents of Spain when they inherited property or other assets located in Spain. It also affects people who are residents of Spain who have inherited property or other assets located in Spain from a person who was a non-resident.
How can I find out if I am eligible to claim a Spanish Inheritance Tax Refund?
To find out if you are entitled to a refund of Spanish Inheritance Tax and for details of how to claim download our complete guide on the right of this page.
For more information and for help to claim contact our UK office as soon as possible on 01244 470339 or via our Contact Form for a FREE no-obligation consultation.
There is only a short time period within which claims can be made. Do not delay getting advice to see if you can claim. Download our free guide to making an application for a Spanish Inheritance Tax refund (see the box above right) and contact us today!
Why is Spanish Inheritance Tax being refunded?
Under Spanish law when someone dies owning assets in Spain, the beneficiaries of their estate individually pay Spanish inheritance tax on the amount they have inherited.
In accordance with the Spanish legal system the amount of inheritance tax payable by each beneficiary is governed by either the rules of the state or one of Spain’s 17 autonomous regions.
The law of the autonomous regions does not apply to non-residents of Spain and so state law applies to non-resident’s instead.
Under the state rules, tax rates are much higher than under the rules of the autonomous regions.
Therefore if either the beneficiary or the deceased person was a non-resident of Spain the state rules would apply and the beneficiary would have a higher tax burden than if they or the deceased person were a Spanish resident.
For more information about the ruling, download our full guide to reclaiming your Spanish Inheritance Tax.
As this system has been ruled to be discriminatory to non-residents, anyone who has paid Spanish Inheritance Tax who is not a resident of Spain could be entitled to a refund of the difference between what they paid as a non-resident and what they would have paid had they been a Spanish resident.
Can you claim a Spanish Inheritance Tax refund?
The rules vary from region to region. For detailed information about whether you would be eligible to claim, download our Free full guide on the right hand side of this page.
As a general guide, if you have inherited from an estate of someone who died owning assets in Spain you could be entitled to a refund if:
You have paid Spanish Inheritance Tax within the last 4 years AND either one of the following statements is true:
- You are not a Spanish resident, or
- The person whose estate you inherited was not a Spanish resident.
As set out above however, the rules do vary depending on which of the 17 separate regional rules would be relevant to your case. For further details about these specific rules, download our free complete guide on the right of this page.
How much will you get?
The amount of the refund will depend on which of the 17 Autonomous Region’s rules would have been applicable to if you and the deceased person were Spanish residents. For further information and examples download our free guide to getting a Spanish Inheritance Tax rebate.
The general position is that non-resident beneficiaries who have paid inheritance tax in Spain can claim a refund of the difference between the money they paid as a non-resident and what they would have paid had they been a Spanish resident.
In many cases up to 100% of the Spanish Inheritance Tax paid can be reclaimed as in some regions the tax would have been zero (such as in Catalonia).
In other regions such Madrid, Valencia, Andalusia, and the Balearic Islands (to name just a few) the Spanish Inheritance Tax that would have been paid by residents would have been a fraction of that paid by non-residents. Therefore the amount that can be reclaimed in many cases equates to thousands if not tens of thousands of pounds.
What should you do now?
Contact us today!
There is only a short window in which refunds for Spanish Inheritance Tax can be claimed and so you should make sure that you do not delay making your claim.
As you are only able to submit a tax reclaim once, you should make sure that you are supported by a lawyer who has experience with filing tax refund claims in Spain.
If you think you may be eligible to reclaim overpaid Spanish inheritance tax contact our UK office as soon as possible for a free no-obligation consultation on 01244 470339 or by email at firstname.lastname@example.org or via our Contact Form.
Worldwide Lawyers will provide a FREE consultation to see if you can claim. We can also put you in touch with a reputable English-speaking Spanish tax lawyer to assist you with your refund claim. “No-Win No-Fee” arrangements available.