Spanish Inheritance Tax: An Overview

Spanish inheritance tax differs a lot from UK: in addition due amounts may vary by regional Inheritance tax, read from Advocate Abroad's English-speaking Probate Law experts in Spain.

Spanish Inheritance Tax

How Is Spanish Inheritance Tax Applied?

Inheritance tax is payable on all bequests of assets including:

  • Property
  • Vehicles
  • Cash
  • shares
  • bonds
  • any cash paid out by the maturity of a life insurance policy

The amount payable is the net amount after deductible costs and charges. Admissible costs and charges would include:

  • Social Security Debts
  • Tax Debts
  • Outstanding Mortgage Debt
  • Health Care Expenses
  • Funeral Costs

Not included would be debts owed to any of the beneficiaries even though they chose to turn down the bequest.

Factors That Determine Spanish Inheritance Tax

The first major difference between Spanish inheritance tax and elsewhere is that in Spain the tax payable is determined with reference to the heir or beneficiary rather than merely considering the size of the estate itself.

Whereas in the UK inheritance tax is only payable where the threshold (currently £325,000) is exceeded and there is no need to consider any other factor if the estate is valued below this, the same is not true in Spain.

In Spain it is necessary to consider the following factors before the inheritance tax liability might be determined:

  • Tax Exemptions
  • Tax Rates
  • The Wealth of the Beneficiary
  • The proximity of the relation of the beneficiary to the deceased
  • Funeral Costs

It should be pointed out that, at a state level, no exemption exists for spouses as is the case in other countries.

A couple would often be considered to own half of a property each. Upon the death of one of the spouses the surviving spouse is considered to have inherited the other half (if this is provided for in the will).

Tax Exemptions At State Level

Inheritance tax has been effectively delegated by the central government to the autonomous communities in Spain which has allowed the regional governments to set the exemptions that can be claimed by beneficiaries.

Previously, many of the Spanish regions enacted legislation which required residency in the region before beneficiaries might benefit from the exemptions.

This situation has now changed, finally allowing foreign EU citizens to benefit from the same generous deductions previously only available to local residents.

Visit the relevant section under Spanish Inheritance Tax by Region for an overview of the regional tax exemptions available .

However, non-EU citizens must continue to avail of the less generous ‘state level’ tax deductions. Below is an overview:

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Group Definitions

For the purposes of determining the proximity of a relationship to the deceased, the legislation dealing with Gift and Inheritance Tax in Spain (Ley 29/1987) considers there to be four categories or groups:

  • Group I – Children, including adopted children, under the age of 21
  • Group II – All other children, spouses and parents
  • Group III – close relatives such as brothers and sisters, grandparents, aunts and uncles
  • Group IV – more distant relatives

Example

A 16 year old child who inherits from her parents falls into Group I and so may claim an exemption of

€15,956.87 + (€3,990.72 5) = €19,953.60 to give a total exemption of €35,910.47.

Other Deductions

A number of other exemptions exist at the state level. These include:

Disabilities

In addition to the above exemptions, should any beneficiary be disabled, further exemptions ranging between €47,858.59 and €150,253.03 are available.

Life Insurance Policies

If the deceased took out a life insurance policy in favour of a beneficiary there is an exemption up to the value of €9,159.49 where the beneficiary is a spouse, child or parent.

The Family Home

An exemption also exists for tax payable on the permanent or habitual residence. This exemption applies equally to spouses, children and parents of the deceased at a rate of 95% of the value of their inherited portion of the property up to a maximum value of €122,606.47 each.

An important proviso exists in that the property may not be sold for a period of 10 years after the inheritance.

Other relatives further removed, may also benefit from this exemption but must have been living with the deceased in the property for a period of at least two years prior to the date of death.

Regional Deductions: Spanish Inheritance taxes by region

The Spanish regional governments’ inheritance tax deductions tend to me more generous than the state level deductions. For example there are often almost 100% deductions available to spouses and children, relating to the primary family home and businesses. For an overview of the regional tax exemptions available view the relevant section under Spanish Inheritance Law by Region.

After this Spanish Inheritance Tax overview it is obvious that planning a clever strategy about assets and estate inheritance is necessary for you and your family interests.

Do not fall short on advise, do use the expertise of English speaking local Inheritance expert lawyers.

33 Lawyers Offering Inheritance Services in Spain

Testimonials for our Inheritance service
  • Peter Morgan
    Peter Morgan, Mallorca

    Following our father's death, my brother and I asked Rosa to act for us and guide us through the Spanish probate legal process. There were several obstacles and Rosa was always there for us, explaining what was required and liaising with professional bodies e.g. the notary, to ensure that everything was done in a timely manner.


    Rosa also helped us immeasurably when my father’s estate was sold. The pandemic meant that it was difficult for us to travel to complete the sale paperwork but to overcome this Rosa became our Power of Attorney and again liaised with professional bodies e.g. buyer’s solicitors, the notary. Her English is excellent and her patience is inexhaustible. Thank you Rosa.


    Dec 02, 2020
  • 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
  • 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
  • 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
  • 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
  • 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