- OliverOliver is a multidisciplinary lawyer and economist with over 10 years in the banking sector. With a very high level of written and spoken English, Oliver specialises in: Property Conveyances, Inheritance, Family Law, Criminal Law, Tax Law and Contractual disputes.
Until the 31st of December 2014, with regard to Gift & Inheritance Tax, European Union citizens not ordinarily resident in Spain have suffered a discrimination under Spanish law compared to European Union citizens who were resident, the former not being able to avail of extensive deductions and exemptions that substantially reduced the amount of tax payable in respect of inherited assets.
The cause of the discrimination was that when either the deceased or the beneficiary were not residents in Spain, they had to follow the tax rules laid down at the State level, which did not contain many of the substantial tax deductions available at the regional level. However, on January 1st, 2015, Law 26/2014 entered into force and this modified the existing legislation, specifically Law 29/1987. The new legislation was drafted as a result of the decision of the European Court which decided that Spanish inheritance laws infringed on the free movement of capital (Article 260 TFEU) as a result of the differences in the fiscal treatment of gifts and inheritances between residents and non-residents in Spain.
Special Tax Regime
With the entering into force of the new legislation on January 1st, 2015, a new special tax regime has been introduced for non-resident EU citizens, that is to say, EU citizens not resident in Spain, but resident in the European Union, may apply the Spanish regional tax rules as have residents in Spain before the new law, thus making the treatment equal in both cases.
In relation to EU citizens the new legislation establishes that , if the deceased was not resident in Spain , heirs not resident in Spain can apply the rules of the Autonomous Community in which the majority value of their assets are located. If the heirs are resident in Spain , the rules of the Autonomous Community where they reside shall apply. If the deceased had been resident in a region of Spain and the heirs are not resident in Spain , the non-resident heirs will pay their inheritance tax under the rules of the Autonomous Community where the deceased resided.
Following the above explanation it would appear to be the case that new problems may be posed in the future, such as on the death of a person resident outside the EU , whereby heirs that are EU citizens resident in Spain will continue liquidating their inheritance tax under the less generous state rules, and thus maintaining discriminatory treatment.
Neither does the legislative amendment make any ruling on its retroactive nature, so I understand that it is not possible to apply the new rules to taxable transactions incurred prior to January 1 , 2015. In my opinion the new rules could not be applied retroactively as if this was the intention of the legislators, it should have been expressly declared to be retroactive. In my opinion the new rules should have been given retroactive effect , since the judgment of the ECJ declares the supervening invalidity of the rule infringed , with effect from the time that the Court’s judgment was handed down. This should envisage the unenforceability of the old tax discrimination to anyone affected. Despite this, after telephone contact with the Non-Resident Tax Agency in Madrid , it seems that they are accepting the application of the new rules for accruals prior to January 1, 2015 , although this is something we must continue to monitor.
Autonomous Communities and Competitive Tax Regimes
It is worth remembering that inheritance and gift tax collection in Spain is devolved to the Autonomous Communities, so these latter have been free to set their own rules.
The amount of inheritance tax payable by EU citizens resident in Spain varies considerably depending on whether the taxpayer is residing in one region or another. In fact this has initiated a tax “war” between the Spanish Regions for the purposes of this tax , because there are people who have taken up residence in Autonomous Communities with more favorable treatment whereby beneficiaries pay less tax on inheritance and donations , especially those with highest valued estates.
So, we are now seeing this issue currently pending judicial interpretation and already there have been some judicial rulings relating to discrimination in Spanish territory between residents of different Autonomous Communities on the basis of having to pay more or less tax.
As an example, the most famous case lately in Andalucía has related to the death of the fabulously wealthy Duchess of Alba, because although she has always been linked sentimentally and emotionally to Andalucía, apparently her “fiscal heart ” belonged to Madrid, which according to some media sources, was extremely advantageous for her heirs, thereby saving more than 90 million euros in inheritance tax .
Since now non-resident EU citizens will also enjoy the more generous rules for inheritance tax previously applied only to residents, and since the regulations of the Autonomous Community in which the majority value of the assets of the estate are located shall apply, the difference in tax rates and deductions etc by the the various Autonomous Communities may well become an important consideration for estate planning in the future.
Below is a list of recent reviews received from our clients, obtained via Wufoo client survey platform:
- Darren & Gemma Nesbitt, ValenciaTuesday, September 11, 2018Inmaculada has been of excellent service to us, as a family and in helping to set up a business in Spain. She has now undertaking several project for us and has delivered high quality on all of them. ...Perfect service!
- Patsy Valentin, GranadaTuesday, September 11, 2018Extremely accommodating and highly professional and very pro active. Excellent result and service. Highly recommended.
- Jovie, MalagaWednesday, September 05, 2018My lawyer Alvaro was extremely helpful and very efficient. I would definitely recommend his services to friends.
- Albert Roldan, FranceTuesday, September 04, 2018Alfonso was extremely helpful, particularly since we requested a quick turnaround for the 18 documents needing to be translated from English and French to Spanish.
He was fluent in our phone conver...sations and email correspondence, he never misunderstood what our requirements were. He was was clear in explaining how this process works and what the price included.
I would highly recommend him to anyone needing these services.
- David Grundy, UKFriday, August 24, 2018Jose was very polite and we received an excellent service from him. Nothing was to much trouble and his communication was 2nd to none. Highly recommended!
- Mario Klappholz, Miami, FloridaThursday, August 16, 2018Inma was very helpful, always happy to assist. I particularly appreciated her professionalism. I would not hesitate to recommend her services to friends.
- Daniel Spitzhorn, SpainTuesday, August 14, 2018Miguel in Oviedo helped us during the process of buying a flat in Asturias. He was just brilliant!
- Tracey Iliffe Bradley, UKTuesday, August 14, 2018Rosa dealt with everything efficiently and promptly and went beyond our expectations by helping us to open a Spanish bank account and deal with other minutiae.
- Erslaan Ahmed, BangladeshFriday, August 10, 2018Gave very good advice and provided an excellent solution. Inma is very professional in her work. I would recommend her services to friends.
- John Ryan, Derby, EnglandWednesday, August 08, 2018A perfect relationship between client and professional. Nothing was too much trouble.
Went over and above his job and more. I would only use his services if I need legal services. I were very lucky... to find Jose first time round.
Thank you jose
- Robert Brownlee, Almeria, SpainWednesday, August 08, 2018Everything was as it should be: excellent. Had to pay by bank transfer and maybe would have liked another means of paying.
- Delbecq, FranceFriday, August 03, 2018Cristina, is extremely professional, fast, responsive understand and explain well, she always found appropriate solutions and provide good advices.
She know how to deal and negotiate, and look self...-confident, and make you feel less stress, you can trust here.
The value for money is good, and she is up to date with technologies (mail/google app etc… very practical).
It was a pleasure and a great luck to found here and have here at my side for my case. For anything, i should need a lawyer she will be the one I’ll work with
- Mohamed Nasir, EnglandMonday, July 30, 2018My lawyer Carmen is a nice lady ,very professional. I would like to be her client again if I need a lawyer in the future.
- Michael Harrison, Urb. Camposol Mazarron MurciaFriday, July 27, 2018Maria was extremely helpful and professional, and put herself out to satisfy my needs.
I contacted her on a number of occasions and always had very good advise on costs etc.
Her English was imp...eccable and could always be understood.
- Michael Bates, UKFriday, July 27, 2018Francisco was very easy to deal with. Very professional. Would not hesitate to recommend him to friends.
- Elizabeth Coelho, BarcelonaWednesday, July 25, 2018Oscar was very helpful and really understood my needs.
- Janette Payne, FranceWednesday, July 25, 2018Jaime was quick, made good suggestions about remembering to revoke the power in the future, very responsive - changing a meeting to suit our timetable - and even took us round to a DHL office and arra...nged for the document to be courriered after it was signed.
- Janet/Alex Olsen, NewcastleWednesday, July 25, 2018Overall the service provided by Oliver was exceptional.
My mother and I couldn't of asked for more from him as he sorted out our family affairs. His attitude, attention to detail and promptness wh...ile helping us were second to none.
His English is top notch and his way of explaining and or guiding you through what needs to be done makes the whole experience easier than expected.
We'd recommend Oliver to anyone in need of his expertise while dealing with issues in Tenerife.
- Neil Linter, LondonTuesday, July 24, 2018Cristina immediately understood our requirements and was essential in guiding us through a very tricky process.
- Jason Yorke, United KingdomThursday, July 19, 2018Beatriz was really helpful and always kept me informed at all stages. She is very professional and a pleasure to deal with.
- Mr David P Robson, ValanciaThursday, July 12, 2018My lawyer Francisca offered value for money and was very helpful. Will use her again.
- Richard Day, London and BarcelonaThursday, July 05, 2018My initial call to your service desk was responded to by Oscar very quickly.
I appreciated his time as I outlined my issue, a problem with the building community and administrators. At the end of ...the call he provided clear guidance on next steps.
Furthermore he quickly turned around the issue with an excellent drafted response for which I could not of hoped to be better worded. It was comprehensive and aligned perfectly with what I felt was needed.
Excellent value for money and most definitely I would highly recommend Oscar.
- Søren Aabel Hammer, MalagaThursday, July 05, 2018Beatriz was professional and quick to respond. Would definitely recommend to friends.
- Patrick Crean, AlmerimarThursday, July 05, 2018Juan was fantastic. Very easy to understand and very pleasant. I would definitely use his service again.
- Damien Stephan, BenidormThursday, July 05, 2018The whole process from start to finish was straightforward and well explained. I honestly cannot recommend them enough!
They really went out of their way to be helpful and kept me up to date at ev...ery opportunity. Excellent value for money from some really nice and genuine people. True professionals.
Wouldn’t hesitate to use again in the future.
- Claire, FuengirolaWednesday, July 04, 2018Alvaro assisted me during my experience at advocate abroad, and he was so kind. He answered any questions I had, and made me feel completely at ease.
I knew I was in the hands of a professional. H...e could not have done more to help me.
- Paul and Joyce Rose, Mijas, MalagaWednesday, July 04, 2018Extremely helpful and very professional. Will definitely use Alvaro next time we require legal advice.
- Nigel Whinnett, Esher, UKWednesday, July 04, 2018Professional, friendly, efficient service, good value, a pleasure to use the services of the lawyer and his team. In depth knowledge of the relevant laws, taxes etc.
Would highly recommend and use ...again.
- Claire O'Gara, FuengirolaWednesday, June 27, 2018I liked Alvaroós enthusiasm, and the great level of customer service. He always answered my questions thoroughly.
- Mrs Susan Vickery, Silves, PortugalTuesday, June 26, 2018Good advice, very helpful and fast. Would definitely recommend Luis to friends.