Understanding inheritance and inheritance tax in Spain; for residents and non-residents

Whether you are an official resident or have just moved to Spain, understanding inheritance tax is essential to planning your legacy.

In Spain, inheritance tax (impuesto de sucesiones y donaciones) applies to residents and non-residents alike. However, the inheritance tax regulations vary by region of Spain.

Understanding inheritance for residents in Spain

To all Spanish residents, the Law of Obligatory Heirs applies, imposing restrictions on distributions of your estate. The nationwide Law states that if the deceased was married at the time of death, the spouse preserves 50 per cent of all jointly-owned property, while the remaining 50 per cent goes towards the estate.

The estate is then divided into three equal portions; one-third is equally between any surviving children and one-third is distributed amongst surviving children equally or unequally according to instructions in a will. The surviving spouse retains a life interest in this part of the estate, which the children don´t inherit until the spouse´s death.

The deceased may dispose of the final one-third freely in a will. In cases without children, surviving parents can claim one-third if there is a surviving spouse and 50 per cent if not. With no surviving relatives, the estate can be given to anyone in Spain or abroad through a will.

Understanding inheritance for non-residents in Spain

EU residents and non-EU can choose whether to adhere either to the law of their home country or their residence country. If a foreigner in Spain dies intestate, (without a will) Spanish law requires that the inheritance process be completed within six months; it is then advised to employ a lawyer. To claim someone´s estate without a will, one should apply for a grant of probate, which can be done from your country of origin.

Understanding inheritance tax for residents and non-residents

Unlike in other European countries or the UK, the legacy recipient pays Spanish inheritance tax on assets received after death and on lifetime gifts; inherited pension funds are also subject to taxation for both residents and non-residents.

The tax is set by the national government based on the inheritance amount as follows;

Inheritance up to €7,993: 7, 65 per cent tax
€7,993–€31,956: 7,65 to 10, 2 per cent tax
€31,956–€79,881: 10,2 to 15,3 per cent tax
€79,881–€239,389: 15,3 to 21,25 per cent tax
€239,389–€398,778: 25,5 per cent tax
€398,778–€797,555: 29,75 per cent tax
€797,555+: 34 per cent tax

If you need help with Spanish taxation, get in touch with Entre Tramites who specialise in helping foreigners adapt.