A guide to Spanish inheritance tax

A guide to Spanish inheritance tax

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If you own a property in Spain, it is best to acquire some basic knowledge on Spanish inheritance tax to avoid future confusion.

The rules and rates for Spanish Succession Tax vary according to the relationship between the donor and beneficiary but unmarried couples and step-children usually pay more tax than spouses and natural children.

The individual regions can vary the Spanish succession tax (SST) allowances and tax rates, but only if the beneficiary and the deceased are habitually resident in the region. Habitual residents mean they need to have lived in the country for five years.

In some regions like Comunidad Valenciana (Alicante, Valencia and Castellón provinces), the Balearics and Madrid, there is almost complete exemption for spouses and children.

National rules will apply if the deceased and/or beneficiaries do not live in Spain.

The allowances and the tax rates vary depending on the Group the beneficiary falls into:

Group I

  • Natural and adopted children under 21


Group II

  • Natural and adopted children aged 21 and over
  • Grandchildren
  • Parents, grandparents etc
  • Spouses
  • Unmarried partners registered as a pareja de hecho (only in certain regions)


Group III

  • In-laws and their ascendants/descendants
  • Stepchildren
  • Cousins
  • Nieces and nephews
  • Aunts and uncles
  • Sisters and brothers


Group IV

  • All others including unmarried partners, unless registered as pareja de hecho in certain regions


Under state rule, the surviving spouse receives an allowance of EUR 15,956, but there is no automatic allowance for unmarried couples.

Unmarried couples living together can be treated like married couples for legal purposes in certain Spanish regions if they are registered as a ‘pareja de hecho’ (a de facto couple). It has different names in different regions.

For SST purposes, though, a pareja de hecho is currently only effective in Andalucía, Cataluña, Canaries, Balearics, Madrid, Asturias, Castilla y León, and Cantabria.

The state rules that a natural or adopted child will receive a EUR 15,956 allowance, but a stepchild only receives EUR 7,993. In addition, a natural or adopted child under the age of 21 can have an additional tax deduction of EUR 3,990 for each year they are under 21, up to EUR 47,858 per child.

The basic SST is in bands that start at 7.65 percent, on amounts over EUR 7,993, increasing in stages to 34 percent for amounts over EUR 797,555 per beneficiary.

The tax liability is multiplied based on the groups:

Group I & II – 1.0000

Group III – 1.5882

Group IV – 2.0000

This means that an unmarried couple not registered as pareja de hecho, or where it does not affect the tax, will pay twice as much SST as a married couple, and step-children will pay at more than 1.5 times what a natural or adopted child would pay.

The rates can also be further multiplied for the beneficiary’s existing wealth.

It is therefore important to take steps to lower your Spanish succession tax liability, where possible.

Spanish inheritance law

Where it applies, Spanish inheritance law limits who you can leave your assets to. This is to protect the family and provide for the children who will receive two-third in preference to the spouse.

A usufruct in Spain is where a beneficiary, often the surviving spouse, is left a ‘life interest’ over assets, normally the family home, rather than a direct share of the property.

This can reduce Spanish inheritance tax. By leaving the spouse a usufruct, full ownership of the house can eventually pass to the children without further tax at that stage, and in the meantime the surviving spouse can live in the property free for the rest of their lifetime.

However, the good news is that in general non-Spanish nationals can make a Spanish will bequeathing their assets as they wish under the law of their own country, so long as the will declares that is to be the case.

The Spanish Registrar of Wills has accepted this in the past, and when the time comes, the will is executed accordingly. Spanish lawyers routinely make such wills.

There can be a problem, though, if the estate substantially consists only of Spanish real estate as it can then be subjected to Spanish succession law and legitimate inheritors could contest Spanish will that seeks to disinherit them.

You may find that your plans agree basically with what Spanish law provides but nevertheless, it is advisable to make a Spanish will, particularly if you have remarried and have step-children, so that you can leave your Spanish property to whomever you chose.

Spanish succession tax and inheritance law is far from simple and in all cases it is advisable to seek qualified professional advice in order to make the best arrangements for you and your family.

Spanish Property Insight / Expatica
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8 Comments To This Article

  • Sami posted:

    on 21st August 2016, 08:50:38 - Reply

    I am a Spanish Citizen living in the USA and also have US citizenship. If I die in the US can Spain claim Death Taxes? Secondly if I visit Spain and am not a resident, if I die during my visit in Spain could they try to claim Death Tax if my visit is less than 180 days?

    [Moderator's note: You can also post questions on our Ask the Expert service]

  • Tracey posted:

    on 27th February 2016, 18:27:05 - Reply

    Do you have to renew your residendencia certificate, if so after how long?

    [Moderator's note: You can also post questions on our Ask the Expert free service.]

  • RichardYaffee posted:

    on 18th February 2016, 15:53:23 - Reply

    I'm really glad you wrote this article. Taxes suck, but this makes them suck a little less. Thanks!

  • jlcalawyers posted:

    on 13th October 2015, 11:19:52 - Reply

    We understand that dealing with Spanish inheritance at a time of loss may be difficult; however, there are steps that you can take to safeguard your Spanish inheritance and comply with the obligations of Spanish Inheritance Law. Our law firm can assist you to complete this as quickly and simply as possible, avoiding incurring additional taxes. In Spain, if the inheritance is not dealt within a timeframe of 6 months, taxes will increase.
    http://www.inheritancetaxinspain.com/

    .

  • Kathleen posted:

    on 5th September 2014, 17:50:44 - Reply

    Please help. You seem to know a lot about the details of how taxes, etc work in Spain.

    I have inherited money from a Spanish national friend from Pamplona. I am a US citizen. I have been talking to a notary, a bank representative, the relative in charge of the will, friends of the deceased, etc. We made appointments with the notary and relative, purchased airline tickets, rented an apartment for 8 days, and have all the documentation I was told to bring. (Notary told me I did not need to have my docs notarized).

    Then TODAY (2 days before I fly out on 9/7/2014 Sunday) I get word through the relative that I need to get an NIE to pay the taxes on the inheritance. What do I do now?

    Also, I was told that I have to pay the 50% taxes to the tax office before I get the inheritance money. How do I do that?

    Thank you so much, Kathleen
  • Donna Knight posted:

    on 20th May 2014, 12:20:54 - Reply

    If you have paid inheritance tax in Spain and are a non-resident you may be able to recover your taxes back.

    Due to legal time limits in Spain your case may expire as you only have up to 4 years from the date you paid your tax to file a claim against the Spanish Authorities.

    If you have any questions about IHT in Spain or want to make enquiries about making a claim contact:
    www.spanishlegalreclaims.com
  • TGS Edisa posted:

    on 3rd April 2014, 13:35:12 - Reply

    Regarding the differences between amounts paid by residents and by non residents:

    - Firstly, I think it is important to point out that the situation may change because Spain could be condemned in May by the European Court of Justice for discrimination. Then, if Spain is actually found to be at fault, it shall be possible to claim back the amounts paid by non residents because of this discrimination.

    - Secondly, a proposal was presented to the Spanish government by a group of experts in order to modify the tax system in Spain, so the Spanish inheritance tax should be modified in the future by the Spanish government, as well.

    If you want to learn more about it please visit our website: www.inheritancetaxspain.com
  • Yvonne posted:

    on 7th July 2012, 11:46:04 - Reply

    Reclaim Informationfor IHT in Spain

    http://community.expatica.com/forums/topic/47863/recovering-spanish-inheritance-tax