The European Court of Justice has recently (17 October) stated that the taxable base of the inheritance tax of a non-resident heir, where he is partially subject to inheritance tax in Germany, is less than that of a resident or non-resident heir who is wholly subject to that tax in that Member State, and this is incompatible with free movement of capital (case C-181/12).
The European Commission has referred also Spain to the Court of Justice because non-residents in Spain are not entitled to enjoy tax reductions set by the Spanish Regions on the Inheritance and Gift Tax (case C-127/12) so it is expected a similar judgment soon.
The Supreme Court of Spain has raised a question before the Constitutional Court based upon similar grounds. In fact, current legislation creates a huge problem for those families whose kids have gone abroad to study or work as they become non-resident in Spain.