The Highest Court of the UE has issued recently a very interesting sentence about the inheritance tax and the consequences it might have whenever there are differences in its calculations because of tax residency and the implications it may have against the freedom of movements and settlement inside the UE.
The case objet of the sentence is about a Swiss widower, that lived with his late German wife in Switzerland, but within the heritage of the deceased German woman there was a real estate good sited in Germany.
As neither the Swiss widower nor the deceased German wife were resident in Germany, the German Tax authorities, to calculate the inheritance tax related to the German real estate rejected an allowance of 500.000 € only foreseen for German residents, and estimated an allowance of just 2.000 € which was the one foreseen for German residents. This meant that the Swiss widower had to paid 41.000 € instead of the 0 € he claimed to pay if he was German resident.
The Highest Court of the UE, has ruled that legislation like this violate the treaties of the UE and specifically the freedom of movements for its citizens, as differences in taxation like this might condition where to live and it is discriminatory with other EU that are in the same situation.
And inside Spain, the question all we can make to ourselves, is if a sentence like this would overrule the insanity of the unfairness we suffer because of the 17 different regulations that we already have, as the regulation of this tax has been transfer to the Comunidades Autónomas, and there are differences in taxation among them up to 100% depending on the residence of the deceased and its heirs.
We hope so.