Taxation of Inheritance in Spain

Updated on Wednesday 22nd April 2020

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Obtaining an inheritance in Spain is without a doubt a good thing that can happen to a person. Even so, claiming it will not bring only benefits but will also attract a series of obligations, among which taxes are the most important.

Spain has a progressive taxation system when it comes to an inheritance which implies the evaluation of the assets and the levy of various rates in accordance with the tax bracket the inherited goods enter.

Below, our lawyers in Spain present the most important aspects of the taxation of inheritance in this country. You can reach out to us for assistance in drafting a will or simply understanding the inheritance tax laws in Spain.
 

Inheritance legislation in Spain


In order to understand how the taxation of inheritance will occur, it is important to understand how the inheritance legislation in Spain works, especially with the new changes that were introduced in 2015. According to these new rules, EU citizens living in Spain and a few non-EU countries can decide on the law that will apply with distributing the assets among the heirs. These can decide whether the Spanish legislation or their home country’s laws will apply. However, if a foreign resident of Spain dies and leaves no will, the law of the country in which he or she lived in the past 5 years applies.

These new rules will have a great influence on the distribution and taxation of the inheritance in Spain. Another important aspect to consider in respect to the taxation of inherited assets is that no other country’s or EU regulations will apply to the estate located in Spain.

If you are a foreign citizen and want to make a will in Spain, you can rely on the support of our lawyers.
 

Tax regulations applicable to inheritance in Spain


As mentioned above, the taxation of inheritance in Spain will apply at progressive rates, however, there are other important aspects to consider. Among these:
 
  1. the relationship between the testator and the heirs will influence the taxation level of the inherited goods;
  2. the region in which the deceased had the place of residence will also influence the taxation of the assets;
  3. the tax is levied on both Spanish residents and non-residents who have inherited properties in this country;
  4. the inheritance tax will be paid after the assets have been received by the heir.

Also, starting in 2015, both residents and non-residents will be treated equally when it comes to inheritances in Spain.

Our inheritance lawyers in Spain will explain all the tax regulations you need to know when accepting an inheritance. It is useful to note that all operations related to the registration of wills in Spain are supervised by the Ministry of Justice.
 

Tax rates applicable to inheritance in Spain


The calculation of the tax to be paid on inheritance in Spain is rather complicated, which is why below we provide with the rates applicable based on the value of the assets:
 
  • an inheritance worth a maximum of 7,993 euros will be applied a rate of 7.65%;
  • assets with values from 7,993 to 31,956 euros will be levied with a rate of 10.2%;
  • for assets valued from 31,956 to 79,881 euros, the applicable rates vary from 10.2% to 15.3%;
  • for goods with values from 79,881 to 239,389 to euros, rates of 15.3% to 21.25% apply;
  • for assets evaluated from 239,389 to 398,778 euros, the rate is 25.5%;
  • to inheritances worth between 398,778 and 797,555 euros, a 29.75% rate applies;
  • the last rate applied to inheritances wroth above 797,555 euros is 34%.

If you need more information on the Inheritance Law in Spain, our lawyers can provide it to you.
 

Tax allowances on inheritance in Spain


One of the greatest benefits of inheritance in Spain is that various allowances are available for heirs in accordance with their relationship to the deceased. The following should be considered:
 
  • children aged under 21 of the deceased enter the Group 1 category and can obtain an allowance of 47,859 euros;
  • Group 2 is made of children over the age of 21, grandchildren, spouse, and parents of the deceased who can obtain an allowance of 15,957 euros;
  • Group 3 is made of brothers, sisters, nieces and nephews, aunts and uncles, and other relatives who can obtain a maximum allowance of 7,993 euros.

There is also a Group 4 category made of cousins and unmarried partners in regions where civil partnerships are not acknowledged and who do not benefit from any allowances.
Tax reductions of up to 100,000 euros are available for children and the spouse of the deceased. Disabled relatives can also obtain allowances ranging between 47,000 and 50,000 euros depending on the degree of disability.

If you need more information on the taxation of inheritance in Spain, do not hesitate to contact our lawyers.