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.