Inheritance Tax – Extensions & Deferrals

While Spanish Inheritance Tax law stipulates fines for late payment, there are highly useful options to defer the payment of the tax.

Inheritance Tax - Extensions and Deferrals

Difficulties with paying Inheritance Tax

A common situation that arises is that the beneficiaries are unable to manage payment before the legal deadline of six months from the date of death of the testator.

This is often due to the fact that the inheritance involves a property or some other asset that is difficult to convert into cash quickly.

While the asset itself might be valuable, there may be no ready cash to pay the Inheritance tax. And of course, the property cannot be sold with good title until the taxes have been paid and the title of the property changed in to the name of the beneficiaries. It is a classic Catch 22 situation.

The matter is not made any easier by the draconian fines and interest penalties enforced by the Spanish government.

Fines for late and non-payment

Spanish law stipulates that any Inheritance tax due 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.

According to Article 27.2 of the ‘Ley General Tributaria’ the charges for late payment of Inheritance Tax are as follows:

  • Within 3 months of the deadline: 5% surcharge
  • Within 6 months of the deadline: 10% surcharge
  • Within 12 months of 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%.

So, it can readily be seen that it is certainly in our best interests to get all of the legal issues connected with an inheritance in Spain resolved as soon as possible.

However, where a tax bill of many thousands of Euros is due to be paid and the asset inherited is a property that is not generating income there can easily arise a problem in liquidating the tax bill.

How to Defer Payment of Inheritance Taxes

Luckily, the governing legislation (Law 29/1987) provides for such difficult situations and allows for payment of taxes to be deferred or in instalments. The rules may be summarised as follows:

  1. The taxpayer may opt to delay payment of the tax or to pay in instalments where a request has been submitted within the correct timeframe
  2. In general, approval of a request to delay or pay the tax in instalments will incur a levy for legal interest
  3. The deadline for making an application to delay or pay in instalments is six months from the date of death of the testator.
  4. 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
  5. 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

Inheritance Taxes and the Family Home

Where the asset that is the subject of the tax is a property then the inheritance tax may be paid in instalments where:

  • The application has been made within the required timeframe
  • The property is required for use as a primary, habitual residence
  • The size of the property does not exceed 120m ²

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