Lower Cost of Spanish Inheritance Tax in 8 Steps

Lower Cost of Spanish Inheritance Tax in 8 legitimate ways that you can reduce the costs associated with claiming an inheritance in Spain.

Lower Cost of Spanish Inheritance Tax

Inheritance

If you are reading this then you have probably received an inheritance in Spain.

Or possibly you own assets in Spain and are concerned about how much of your estate will be gobbled-up in taxes, charges and legal costs. The first piece of advice is: Don’t Panic!

Keep reading and learn how to lower cost of Spanish inheritance tax in 8 legitimate ways that you can reduce the costs associated with claiming an inheritance in Spain.

Many scare stories are written about Spanish inheritance tax which are either untrue or simply don’t apply to most of us.

 

Nevertheless, there are ways that you can reduce the costs associated with claiming an inheritance in Spain. Below you will discover 8 tips that will go a long way to ensuring you pay as little as possible.

Please note that you can arrange a full inheritance management service via our network of probate lawyers in Spain.

We also provide a very convenient and cost effective method of incorporating the following tax-saving ideas by providing a will-making service that allows you to maximise savings to potential  inheritance tax liability.

1. Do I need to be in Spain to handle an inheritance?

No. One possible way to reduce expense is to manage the inheritance remotely. By signing a power of attorney you can have your solicitor manage the documentation in Spain and facilitate transfer of the assets to the beneficiaries.

The power is created in both English and Spanish and needs to be legalised in the country where you are located before it can be used in Spain.

Lower Cost of Spanish Inheritance Tax by reducing travel expenses.

2. Are there any simple ways to reduce the tax?

If there is a mortgage on any inherited property this can be deducted from it’s total value before reaching the taxable value. Any other quantifiable legal debt likewise may be deducted from the value of the estate.

While not appropriate for everyone, in general, bequeathing the estate to as many beneficiaries as possible is sensible as each one has an exemption (Approx. €15,000) that can be used to reduce the taxable value.

Leaving a life interest instead of the full interest in the estate can reduce tax substantially also.

3. Is it possible to claim back inheritance?

Currently actions are being filed for the return of taxes against Hacienda and the Spanish government on behalf of those non-residents in Spain who have paid inheritance taxes on the basis of discriminatory treatment. Please contact us for more information on how to join the list.

4. Are there fines or surcharges for late payment?

Spanish law stipulates that any taxes due on an inheritance must be paid within six months of the date registered on the death certificate. If this is not complied with then penalties are charged and interest begins to accrue. The surcharges applied are as follows:

  • 3 months after the deadline: 5% surcharge
  • 6 months after the deadline: 10% surcharge
  • 12 months after the deadline: 15% surcharge
  • Over 12 months since the deadline: 20% surcharge.

In the first three scenarios, the surcharge is a percentage of the amount payable alone. In the last scenario where 12 months have elapsed since the deadline, interest also becomes payable, currently at a rate of 4.75%.

You would obviously be well advised to act quickly enough to avoid the surcharges and fines becoming payable.

5. What if I am unable to pay the tax?

If you are unable to pay the tax initially then one option to avoid surcharges would be to defer the payment. The rules may be summarised as follows:

  • You may opt to delay payment of the tax or to pay in instalments if a request has been submitted within the correct time-frame (six months from date on death certificate)
  • In general, approval of a request to delay or pay the tax in instalments will incur a levy for legal interest
  • The deadline for making an application to delay or pay in instalments is six months from the date of death of the testator.
  • For requests of a delay of a year or less in payment of the tax it is required that the request has been made within the allowed time period and that there are not sufficient liquid assets  to pay the tax
  • For requests to pay instalments over five years in addition to the rules regarding requests for a delay of one year, it is additionally required that a guarantee that covers 125% of the amount of the tax and interest payable.

Lower Cost of Spanish Inheritance Tax (added fines or surcharges) by defering taxes payment.

6. Will I lose an inherited property if I cannot pay inheritance taxes due?

A major fear that beneficiaries can have is that, should they be unable to pay the tax on the inheritance of a property in Spain, that they may lose the property. This is not the case though complications can arise.

For example, it is certainly not possible to sell a property until any inheritance taxes that are due have been paid.

Often the solution here can be to arrange for the lawyer to prepare the inheritance tax papers and wait until a suitable buyer appears. In such cases, the taxes and legal costs can often be dealt with by using the deposit transferred to purchase the property.

7. Do I still pay taxes if I inherit the family home?

If the property was the habitual home of the deceased then a special tax exemption exists for close family members. The exemption is currently worth approximately  €122,000 or up to 95% of the value of the property.

There are strict rules governing what constitutes ‘habitual’ residence and the property may not then be re-sold for a period of 10 years.

8. My partner and I are not married. Can we benefit from inheritance tax exemptions?

This problem can be avoided in a number of regions by registering as a ‘pareja de hecho’ (common law couple) in the relevant local registry and which henceforth permits the partner to benefit from typical spousal tax advantages. More information is available on regional inheritance tax deductions in Spain

Related Services

33 Lawyers Offering Inheritance Services in Spain

Testimonials for our Inheritance service
  • Gail Maher
    Gail Maher, Fuengirola

    Hi, I would like to thank Alvaro very much for all his expertise. We had a very long journey from dealing with the inheritance will for my mother's apartment in Torrenueva to dealing with sale of the apartment.


    He was brilliant in every aspect. Nothing too much trouble. Very professional and would definitely recommend him to anyone in the future.


    So a big thank you and wishing you to continue delivering an excellent service. Regards Gail Maher


    Oct 21, 2020
  • Johanna Count
    Johanna Count, Benidorm

    Consuelo explained and took care of everything. She is easy to get in touch with and a pleasure to deal with.


    Having to deal with Spanish probate laws and procedures was overwhelming but Consuelo made it so straight forward.


    Oct 07, 2020
  • Michael Armstrong
    Michael Armstrong, La Manga del Mar Menor

    Consuelo has the highest praise and gratitude from this family by somehow reclaiming inheritance tax from Madrid. Previous solicitors left a mess,partial/incorrect and missing documents were received very late.


    Despite obstacles such as denial from tax office and virus Consuelo promptly, courteously and professionally simply got on with the job and succeeded against all odds. We cannot thank her enough!


    Jul 27, 2020
  • Carole Nicholls
    Carole Nicholls, N/A

    Beatriz has been wonderful to deal with she is very approachable and always professional and I would certainly recommend her to friends.


    When my circumstances changed Beatriz was extremely helpful and explained fully the action needed and the process required. I have communicated via email to her and she has always responded promptly and when I have visited her office she has always been very welcoming.


    Her english is excellent and she has always let me know the costs upfront of any work she has done.


    Jul 13, 2020
  • Abbie Orsini
    Abbie Orsini, England

    Rosa responded efficiently I was extremely happy and satisfied with this !


    She explained everything I needed to know and more to help me understand. At the beginning I found the process daunting Rosa took this feeling way and helped me feel at ease.


    Paying was straight forward and I was well informed with fees etc. Rosa took a very professional approach and I felt comfortable approaching her about any issues I had.


    She is a credit to advocate abroad !!!!! Thank you for your help !!!!!!!!!❤️


    Jun 18, 2020
  • Jonathan Mackay
    Jonathan Mackay, Jaca

    Francisco was extremely professional and answered our many questions promptly and clearly, both by phone and email. We feel very lucky to have had Francisco handle our Spanish Fiscal declaration.


    The service was perfect, and we are very happy with the whole process.


    Mar 12, 2020
  • Gail Maher
    Gail Maher, Torrenueva

    Alvaro is brilliant.


    He comes across very professional and friendly,nothing too much trouble.


    As I was unable to go to Spain initially all communication was via phone and was put at ease straight away as he understood exactly what was required to deal with my case, and all went exceptionally well. I was able to meet Alvaro in August to pass over documents required and made me very welcome.


    I have been so pleased with everything I have now engaged him on a further instruction on our property in Torrenueva..


    Dec 11, 2019
  • Andrew Hales
    Andrew Hales, Fuengirola

    We dealt with Angela, and had a superb service - she was efficient, clear, timely and exceptionally helpful. We would recommend this respectable Solicitor who has excellent English.


    Trustworthiness is so important, and step by step help was very much appreciated. Thank you Angela of myAdvocate Fuengirola.


    Oct 23, 2019
  • Isabel Albert
    Isabel Albert, Valencia

    Inmaculada has always responded to all my queries and explained and provided excellent solutions. She is very approachable, diligent and professional.


    Sep 17, 2019
  • Irene Hyde Christie
    Irene Hyde Christie, Coin

    I am very pleased with the service provided by Francisco. He has been most helpful and responded very quickly to all my emails.


    Jul 26, 2019
  • Franco Trio
    Franco Trio, United Kingdom

    Rosa always responded promptly to any email I sent.


    She kept me informed and provided alternatives and 3rd party services (translation).


    Thank you Rosa for your assistance, perseverance and honesty in helping my mum and I. We will definitely recommend you.


    Apr 10, 2019
  • Marcus Bond
    Marcus Bond, Fuengirola

    Proactive, great communication, thoroughly recommend.


    Feb 14, 2019
  • Kevin
    Kevin, Algarobba Costa

    Clear information throughout, well explained and always had my confidence.


    Jan 08, 2019
  • Michael Bates
    Michael Bates, UK

    Francisco was very easy to deal with. Very professional. Would not hesitate to recommend him to friends.


    Jul 27, 2018
  • Jason Yorke
    Jason Yorke, United Kingdom

    Beatriz was really helpful and always kept me informed at all stages. She is very professional and a pleasure to deal with.


    Jul 19, 2018
  • Sarah Finnagan
    Sarah Finnagan, England

    Francisco was fantastic and helped me through every single step and helping understanding everything.


    Price was very reasonable i have no complaints at all.


    Very easy to get hold of and very quick at responding would definitely go back to him - thankyou so much Francisco for everything.


    Sep 21, 2017
  • Michael Tenerife
    Michael Tenerife, UK

    Rosa excelled in all of the criteria listed for evaluation.


    Extremely responsive, understanding, professional, and offered great value for money. Rosa explained the situation clearly and provided the clearest solution every time.


    I just can't imagine how Rosa could have done more. Truly excellent service.


    Aug 07, 2017
  • LM
    LM, Ibiza

    Cristina was amazing and very helpful and i would highly recommend her services again.


    I am very satisfied and I definitely would use the same lawyer again in the future.


    Mar 10, 2017
  • Mike B
    Mike B, South of England

    Beatriz responded immediately to my first approach and always quickly thereafter, understood and knew the law/background, carried out local activities in addition on my behalf, good value for money, helped us through an unfamiliar situation very well in a personable and pleasant way.


    People had warned me the key to this was finding a trustworthy lawyer in Spain so I approached a couple of lawyers in Nerja and judged on their first response, Beatriz obviously passed that test.


    Dec 15, 2016
  • Diana Rawstron
    Diana Rawstron, London

    Domingo provided an excellent service on this matter and I was very pleased that I had found him through your website.


    I definitely use the same lawyer again in the future.


    Nov 03, 2016
  • Mrs. Irene C Price
    Mrs. Irene C Price, Acton Trussell

    It was a pleasure to deal with Francisco. He spoke excellent English. He was professional and courteous at all times, and responded to any queries I had by return, taking time to explain complicated legal procedure in a manner I could understand.


    For the work Francisco did, his charges were good value for money. I would recommend his services without hesitation.


    Oct 12, 2016