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V0958-21 19 April 2021 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ISD · liquidación parcial

Non-residents in third countries may apply regional succession rules for accumulated life insurance

A Mexican resident heir asks which law applies to partially settle life insurance policies of a Madrid resident grandmother. The DGT clarifies that although national law excludes third countries, case law allows applying regional rules when insurance is accumulated into the estate.

The question raised

1st. Which regulations must be applied in the partial self-assessment of the Inheritance and Gift Tax carried out as a beneficiary of the life insurance policies of your grandmother, in your capacity as an heir?

The DGT's ruling

Residents in third countries may apply the regulations of the Autonomous Community in inheritance matters, applying the second additional provision of the LISD based on the principle of free movement of capital. If the beneficiary is not an heir and the insurance does not accrue to the rest of the estate, taxation is carried out at the State level under state regulations. In partial payments on account, only the specific reduction for life insurance may be applied.

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