Non resident inheritance

If you aren’t resident in Spain but have inherited assets located in the country, you’ll still have to file an inheritance tax form in Spain and pay the appropriate taxes. Do it quickly or face a penalty.

Where you pay taxes

Spain is divided into many different administrative regions, such as Andalucía, Region de Murcia, Comunidad Valenciana, etc. Each of these regions have the right to set their own level of inheritance tax, which must be paid by residents of that region. But each region obeys the same national law of inheritance.

If you are not a fiscal resident of Spain, then you tribute according to the national law of inheritance and the default levels set there.

Since most regions have set tax levels that are lower than the default levels contemplated in the national law, this has led to a situation where non-residents inheriting Spanish assets were taxed at a much higher level than residents.

EU citizens who inherit in Spain

This situation was overturned in 2014 by the European Courts of Justice (EU court ruling C-127/12 of September 3, 2014) which ruled that the Spanish law of inheritance broke common market laws by discriminating against community members.

Therefore, the law was modified by a second modification decree to Ley 26/2014 (November 27) which bought Spanish legislation into line with the ruling of the EU court.

Therefore, EU citizens who are not resident in Spain now have the right to request that regional law be applied to them in the following circumstances:

  1. When inheriting fixed assets (ie property), if the deceased was resident in an EU community state (including EEA associate states) other than Spain, the heirs have the right to apply the law of the region where the bulk of the fixed assets are located.
  2. When inheriting other assets, if the deceased was resident in a region of Spain, heirs who are citizens or residents of an EU or EEA member state have the right to apply the law of inheritance of the region where the deceased was resident.

The region of residency is considered to be that where the resident has spent the bulk of their time in the five years prior to their death. This is to prevent the terminally ill from changing their residency shortly before their death in order to take advantage of a more favourable tax regime.

Heirs from the rest of the world

If you inherit in Spain and are resident outside of the EU and EEA (and are not a citizen of the EU) then you still tribute according to the default levels set by the national law of inheritance.

Is there a will?

If the deceased had a Spanish will then the situation will be much simpler. Find out how to setup a will in Spain.

Wills issued by a foreign national in their own country by foreigners who own property or assets in Spain are considered to be valid under national law. But trying to validate a foreign will can be difficult and costly at a difficult time for your heirs. It is simple to properly plan for your death and the disposal of your Spanish assets, ensuring the execution of your final wishes are quickly carried out.

Your heirs are in charge of legalising a foreign will in Spain. In brief, this means identifying the inheritors, having an official translation of the will made into Spanish (or an official co-language where appropriate), and having the will apostilled under the Hague convention. Cervantes Alarcón Consulting can of course advise you on how to do this in the cheapest way possible.

This process must be completed within six months of the death of the will’s object, as this is the period under which all taxes must be filed and paid under national law in Spain.

Late filing of inheritance taxes will incur a financial penalty.

Help! I’ve inherited and don’t know what to do

Contact Us for help. Cervantes Alarcón Consulting will study your case and advise you as to the best course of action to take to minimise liabilities upon the estate you have inherited. Remember that you only have six months to file the paperwork or you will incur a penalty.

Maria Luisa

María Luisa Cervantes is a chartered accountant who graduated from the University of Granada in 2002. Founder of Cervantes Alarcón Consulting, she is an experienced accountant and financial advisor who is a member of the Almería guild of economists. With more than 15 years of experience in business administration and international trade, she is also a subject matter expert in the UK - Spanish bilateral agreements which cover the rights of expats to live, work and retire in Spain.