Inheritance tax in Spain for non-residents

Who is taxed, and on what

The tax charges the person who acquires assets by inheritance, legacy or other succession title (Ley 29/1987 art. 3.1.a). The taxpayers are the heirs and legatees (art. 5.a). A person with habitual residence in Spain is taxed on everything received, wherever it is (obligación personal, art. 6). Anyone else is taxed on assets located in Spain, or rights exercisable there (obligación real, art. 7). A UK, Canadian or US heir who receives a Spanish flat is therefore taxed by Spain on that flat.

The tax accrues on the day of death (art. 24.1). The return is due within six months of death, and the administration may extend this by an equal period if requested within the first five months, with late-payment interest running from the end of the six months (Real Decreto 1629/1991 arts. 67-68). Whoever must file with the State tax administration files a self-assessment and pays the debt with it (DA 2ª, section Dos).

The EU succession regulation settles which country’s law governs the succession but states that it does not apply to “cuestiones fiscales, aduaneras y administrativas” (art. 1.1). The will and the tax are separate questions; see Spanish wills and the EU succession regulation.

The national scale and default allowances

If a region has not approved its own scale, has no powers over the tax, or its rules do not apply to the taxpayer, the national scale applies (art. 21.2). It starts at 7.65% on the first €7,993.46 and reaches 34% on the part above €797,555.08. The result is multiplied by a coefficient set by the heir’s existing wealth and relationship group (art. 22.2):

The default allowances for an inheritance (art. 20.2) are by group: Group I (descendants under 21) €15,956.87 plus €3,990.72 per year below 21, up to €47,858.59; Group II (descendants 21 and over, spouses, ascendants) €15,956.87; Group III (second- and third-degree collaterals and in-laws in the direct line) €7,993.46; Group IV (more distant relatives and unrelated heirs) none. A further 95% reduction applies, up to €122,606.47 per heir, to the deceased’s main home when it passes to a spouse, ascendant or descendant, or a collateral relative over 65 who lived with the deceased for the two previous years; the heir must keep it for ten years or the saving is clawed back. For non-residents the same national allowances apply where no regional rule applies (art. 20.4).

Which region’s rules apply to a non-resident

Following the EU Court of Justice judgment of 3 September 2014 (case C-127/12), the second additional provision of Ley 29/1987 (as worded since 11 July 2021) gives these rights:

• The deceased was not resident in Spain: heirs may apply the rules of the region where the greatest value of the Spanish estate is located. If no asset is located in Spain, each taxpayer’s own region of residence applies (DA 2ª.1.a).
• The deceased was resident in a Spanish region and the heir is not: the heir may apply that region’s rules (DA 2ª.1.b).
• Residents of Spain are treated as resident in the region where they spent the greater number of days in the previous five years (DA 2ª.2).

If no regional rule applies, the national default in the table above applies. The same additional provision covers gifts; see gift tax on property in Spain.

Regional allowances. The regions that set their own allowances and scales include some that grant very large reliefs, and others that follow the national default. This guide gives no regional figure because no regional source was read for it. Your region’s tax agency publishes its current allowances. The region page is a starting point for finding the regional administrations.

Related taxes on the same inheritance

• Plusvalía municipal. The heirs owe it on urban land, within six months extendable to one year (TRLRHL arts. 106.1.a and 110.2.b). Towns may rebate up to 95% for descendants, spouses and ascendants (art. 108.4). See plusvalía municipal.
• Income tax. A transfer on death creates no taxable gain for the deceased (Ley 35/2006 art. 33.3.b). When the heir later sells, the acquisition value is the value used for inheritance tax, capped at market value (art. 36). See capital gains tax on a home sale.
• Ongoing costs. The heir then pays the yearly property tax: IBI.

Which professional to consult

A lawyer registered with a Spanish bar association (colegio de abogados) usually handles the sequence of death certificate, will, acceptance of inheritance and tax: property lawyer. A notary executes the deed of acceptance. A tax adviser can say whether the tax is also credited in your home country.