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Law applicable to cross-border successions in the EU

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Over half a million families are involved in a cross-border succession every year, with some international component

30 May 2017. Over half a million families are involved in a cross-border succession every year, with some international component, and they need to take into account the law governing the succession, in accordance with the corresponding European Regulation, and avoid any double taxation and tax discrimination that may arise in these situations.

This point was highlighted by Miguel Ángel Galán, partner of the Tax area of ​​Andersen Tax & Legal, and Iñaki Planas, of counsel in the firm’s Litigation area, in a session on “Cross-border successions in the EU” held in Madrid. Other participants at the session were Rafael Ripoll, of counsel of the firm and honorary consul of Sweden in Valencia, the president of the Swedish-Spanish Chamber of Commerce, Anders Brundin, and the director of the Belgian and Luxembourg Chamber of Commerce, Nives Villar.

During the session, professionals from Andersen Tax & Legal addressed the new European Regulation on matters of succession, which has been in force since 17 August 2015, with which the EU seeks to ensure the legal certainty of the 450,000 cross-border successions with a value of 125 billion euros that take place every year.

The different issues that the Regulation raises for foreigners resident in our country were highlighted: Can a European resident make a will in Spain relating to the assets that he/she has in our country? What happens if he/she has assets in his/her Member State of origin and in Spain? And what happens if after many years the person dies as a Spanish citizen, but their will was executed in their Member State of origin?

According to Iñaki Planas, the EU Regulation states that the succession will in general be governed by a single law, that of the State of the habitual residence of the deceased at the time of death. The problem lies, in his view, in interpreting the concept of habitual residence as there are several criteria in the Regulation that lead to confusion. Nevertheless, Planas stated that the major new aspect of the Regulation has been to establish the power of a person to choose the law to govern their succession in their will, allowing the person to choose between the law of a State whose nationality they possesses at the time of making the choice or at the time of death.

For his part, Miguel Angel Galán stressed that, in the absence of European legislation harmonising Inheritance Tax, two issues need to be taken into account. The first is that Spain has only signed, and only has in force, three double taxation conventions in matters of succession, with France, Greece and Sweden. With regard to the other States, he stated that national legislation for avoiding double taxation will apply.

The second issue to which Galán referred is that, in any event, it will be necessary to pay a great deal of attention to the points of connection established by national legislations applicable to Inheritance Tax and possible infringements of the Inheritance Tax regulations in each State with regard to European Union legislation, in particular with regard to any of the freedoms on which the Union is based (right of free movement and residence for citizens, together with the free movement of capital, goods and services).

 

  • Schedule

9:30h Opening

Nieves Villar

Director of the Belgian and Luxembourg Chamber of Commerce

Anders Brundin

President of the Swedish-Spanish Chamber of Commerce

9:40h Law applicable to cross-border successions in the EU

Iñaki Planas

Of counsel of Andersen Tax & Legal

10:10h Cross-border successions: Tax regulation to avoid double taxation

Miguel Ángel Galán

Tax partner of Andersen Tax & Legal

10:40h Colloquium
Rafael Ripoll

Of counsel of Andersen Tax & Legal

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