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Differing inheritance tax (IHT) legislation operated by European Union member states are preventing citizens from moving freely within the internal market, says the European Commision (EC).
The EC has also expressed concern that IHT rules may be creating difficulties for the transfer of small businesses on the death of owners.
The commision has therefore launched a public consultation to obtain views from all interested stakeholders and individuals on the extent of the problem and ideas on possible solutions.
Member states’ IHT provisions may be considered in breach of the free movement of capital when, for example, they provide for different rules for the valuation of assets that are part of the inheritance depending on where these assets are located, they restrict the deductibility of debts/liabilities related to assets that are part of the inheritance of non-residents, or they provide for lower tax allowances with respect to non-residents.
Comments on the consultation should be emailed by 22 September to the European Commission, Directorate-General for Taxation and Customs Union.
