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:
- 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
- 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