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 inheritance law in Spain for non-residents is the same as for residents, they will enjoy the more generous inheritance tax deductions 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.