The Superior Court of Justice of the Valencian Community (TSJCV) has rejected an appeal filed by the heirs for the settlement of the inheritance tax on a home. The widower and children of the deceased demanded that the tax administration be able to apply a smaller deduction for the inherited home, while it maintains that Since it is a community asset, they only have to apply 50% of it. and, therefore, they will have to pay 5,223.86 euros in tax.
According to the details governed by the November 2024 ruling, the widower and the children of the deceased challenged the settlement of the Inheritance Tax before the Regional Economic-Administrative Court of the Valencian Community (TEARCV). The claim was made for the inheritance of the family’s habitual residence, which in this case was a community asset, that is, it Half of the home was owned by the widower, and the other half was owned by the deceased. and, therefore, it became part of the hereditary estate.
It was this detail that caused the conflict in interpretation between the administration and the heirs. And it is that Law 29/1987, on the Inheritance and Donation Tax, establishes a 95% reduction in the value of the habitual residence. The heirs considered that this percentage could be applied to 100% of the value of the home that was already fully owned by the widower, while the administration considered that it could only be applied to 50% of the same, which was part of the inheritance. .
Justice rules in favor of the tax administration and the heirs will have to pay the 5,000 euros of inheritance tax
Initially the heirs made a claim before the TEARCV, but this was rejected considering that the liquidation was correct, and dissatisfied with the resolution they filed a contentious-administrative appeal in the Superior Court of Justice of the Valencian Community (TSJCV).
The Court ruled in favor of TEARCV confirming again the liquidation, considering the marital nature of the home and the applicable regulations. According to the ruling, “the dissolution of the community property occurs with the death of the deceased, which entails the creation of a post-community company.” In this context, only half of the home belongs to the deceased’s estate, and, therefore, the 95% reduction should be applied only to that part.
On the other hand, he made reference to Resolution 2/1999 of the General Directorate of Taxes, which establishes that “if, as a consequence of the dissolution of the economic regime of community property, half of the habitual residence is attributed to the deceased, only the reduction on said half. If, on the other hand, the entire habitual residence is attributed to him/her, the reduction will operate on its total value.”
In this particular case, The heirs did not present any documentation proving that the community property regime had been dissolved before death of the woman, so it is considered partial marital property, and, therefore, is not part of the inheritance in its entirety.
Furthermore, the ruling highlights that article 27 of Law 29/1987 provides that for the purposes of this tax, “In successions due to death, whatever partitions and awards the interested parties make, they will be considered for tax purposes as if they had been made with strict equality and in accordance with the rules governing succession.” Therefore, The reduction had to be distributed proportionally among all the heirs, respecting the percentages established in the inheritance.
For all this, and according to the ruling of the Superior Court of Justice, The original settlement is valid and the 5,223.86 euros in inheritance tax will have to be paid, in addition to the procedural costs. However, the Court’s ruling is not final and It is possible to file an appeal before the Third Chamber of the Supreme Court.