Formerly, only those who have been ordinarily resident in a particular region of Spain over the balance of a period of five years prior to their death will have the more generous regional inheritance tax exemptions applied to their estate.
In addition it will require the beneficiary to be resident in some part of Spain.
If not, the national rules applied. What this meant of course was that, more often than not, the rules for most non-Spanish beneficiaries were calculated using the less generous ‘national level’ deductions.
However, following a judgment by the European Court, the Spanish government has passed into law Ley 26/2014 about inheritance tax rates in Spain, which came into force on January 1st, 2015.
The new legislation provides that European Union citizens, ordinarily resident in another European country, may apply any deductions available to residents of the region in Spain in which their assets are located. Please view the regional tax deductions.
For non-EU citizens, the less generous ‘national level’ tax exemptions below apply.