Inheriting in Spain when you live abroad: tax, deadlines and paperwork for a non-resident heir

Who deals with it: in general, the Spanish Tax Agency

When the heir is resident in Spain and the deceased was resident in the common-regime territory, inheritance tax (Impuesto sobre Sucesiones) is ceded to the autonomous community (region) where the deceased lived, and that region manages it. The cession only covers taxpayers resident in Spain (Law 22/2009 on regional financing, article 32.2). In the usual case, where the heir is not resident in Spain, or the deceased was not resident here, the tax is managed by the State, and the heir files a self-assessment (Law 29/1987 on Inheritance and Gift Tax, second additional provision, paragraph Two). According to the Tax Agency's guidance for non-residents, the office in charge is its National Tax Management Office (Oficina Nacional de Gestión Tributaria), in Madrid, and the form is 650. So, in general, the tax is not dealt with by the regional tax authority of the place where the property is, and it can be filed electronically without travelling to Madrid. However, where the tax arises in Ceuta or Melilla, whose revenue is not ceded, it is managed not by the National Office but by the relevant Tax Agency office (Delegación), according to the Tax Agency's general guidance for non-residents.

Outside the common regime are the Basque Country and Navarre, where inheritance tax is not ceded but is their own (foral) tax. It belongs to the Basque provincial tax authority (Diputación Foral) or to the Navarre tax authority, whether the heir lives in Spain or abroad, when the deceased was resident in the Basque Country or in Navarre; in Navarre, also when the deceased lived abroad but kept Navarrese political status. If the deceased was resident abroad, it belongs to the foral authority when it is the heirs who are resident there. And when the heir is not resident in Spain, it also belongs to it if the greatest value of the inherited assets and rights is located in its territory (Economic Agreement with the Basque Country, Law 12/2002, article 25.One, letters a and d; Economic Agreement with Navarre, Law 28/1990, article 31.1, letters a and c). If there are assets in those territories, the first step is to establish which tax authority is competent.

What is taxed in Spain, and under which rules

An heir who is not resident in Spain is taxed here on a territorial basis (obligación real): only on assets and rights located in Spain, or that are exercisable or must be performed here, and on life insurance taken out with Spanish insurers or entered into in Spain with foreign insurers operating here (Law 29/1987, article 7). An heir resident in Spain is taxed on everything inherited, wherever it is (article 6). Residence is decided under the Spanish income tax rules (article 6.2); having an NIE or being registered on a town hall's population register does not decide it by itself.

The fact that the State manages the tax does not mean the State's rules must be applied. A non-resident heir is entitled to apply the rules of the region where the deceased was resident; and if the deceased was not resident in Spain either, those of the region in which the greatest value of the estate's assets and rights located in Spain is situated (Law 29/1987, second additional provision, paragraph One, letters a and b). According to the Spanish Tax Agency, this option is open to residents of the European Union and the European Economic Area and to residents of other countries alike; the exception is life insurance that does not form part of the estate, which is taxed by the State and only under State rules. Allowances and reliefs differ widely from one region to another, so the State and regional rules should be compared before filing.

Real estate is valued at its cadastral reference value (valor de referencia) on the date of death; if the value declared is higher, the declared value is used, and if there is no reference value or it cannot be certified, the higher of the declared value and the market value (article 9.3). The reference value can only be challenged by asking for the self-assessment to be corrected or by appealing against an assessment issued by the authorities (article 9.4).

The deadline: six months from the date of death

The tax accrues on the date of death, or when a declaration of death of a missing person becomes final (Law 29/1987, article 24.1), and the self-assessment is filed within the following six months (Inheritance and Gift Tax Regulations, Royal Decree 1629/1991, article 67.1.a). An extension of another six months can be requested, but only within the first five months of the deadline; if no decision is notified within one month, the extension is treated as granted, and it carries late-payment interest from the end of the six months until the self-assessment is filed (article 68). A request made after the fifth month will not be granted.

The municipal tax on the increase in value of urban land (plusvalía municipal) is separate. It is dealt with by the town hall where the property is, if that town hall levies it, and on an inheritance the taxpayer is the person who acquires the land (Local Finance Act, texto refundido de la Ley Reguladora de las Haciendas Locales, article 106.1.a). There is no tax if it is shown that the land has not increased in value between its acquisition and the transfer; to rely on this, the transfer has to be declared with the deeds of acquisition and transfer (article 104.5). Its deadline is six months from the date of death, extendable up to one year at the taxpayer's request (article 110.2.b); the declaration, or the self-assessment where the town hall has adopted that system (article 110.4), and any extension request go to the town hall. It is a different tax and a different authority: an extension of the inheritance tax deadline does not extend the municipal one.

The paperwork that slows down an inheritance from abroad

Each heir needs a Spanish tax identification number: the Tax Agency asks for it with form 650. An heir without a Spanish DNI or an NIE is given a tax number by the Spanish Tax Agency that starts with L (Spanish nationals resident abroad) or M (foreign nationals) (Royal Decree 1065/2007, articles 19 and 20). According to the Tax Agency, it can be requested at the Spanish consulate in the country of residence or, if that is not possible, with form 030. Documents issued by foreign authorities generally need the Hague apostille and a sworn translation; public documents covered by Regulation (EU) 2016/1191, such as a death certificate from another Member State, can be submitted in their own language with the standard multilingual form; and the European Certificate of Succession can replace the death certificate and the will or declaration of heirs, with a translation into Spanish if it is in another language. With form 650, the Tax Agency asks for the certificate from the Spanish General Register of Last Wills (Registro General de Actos de Última Voluntad), even if it is negative.

According to the Tax Agency's frequently asked questions, an heir who is resident neither in the European Union nor in a European Economic Area State with mutual assistance on information and collection must appoint a representative resident in Spain for this tax, and the representative must expressly accept; an heir resident in the Union or in those States can act through an ordinary authorised agent, without that obligation.

Two practical points. The tax can be paid with the estate's own accounts, securities or life insurance included in the estate, but the Tax Agency's authorisation has to be requested before filing, and that route is not available when filing online. And the online filing can be made by the heir, if there is only one, or by an authorised representative or a registered tax intermediary (colaborador social) on behalf of all the heirs, without travelling to Madrid.

After the inheritance: the property keeps being declared

If the inherited property is urban, is not used in a business and is not let, a non-resident heir has imputed income from it (Non-Resident Income Tax Act, texto refundido de la Ley del Impuesto sobre la Renta de no Residentes, article 13.1.h), which is declared on form 210; if it is let, the rental income is taxed instead, and the deductible expenses and filing deadlines depend on the owner's circumstances. Our guide to form 210 for non-residents explains who files it and when. For this tax, a non-resident who lives neither in the European Union nor in a European Economic Area State with mutual assistance must appoint a representative resident in Spain in the cases listed in article 10.1, which include the Tax Agency requiring one because of the amount or nature of the income or because the person owns a property in Spain. Separately, a resident of a country or territory with no effective exchange of tax information must appoint one if they own assets or rights in Spain, excluding securities traded on official secondary markets. Failing to do so is a serious infringement, with a fixed fine of 2,000 euros, or 6,000 euros in the second case (article 10.4). If the property is sold later, the buyer generally withholds 3% of the agreed price and pays it to the Tax Agency on account of the seller's tax, which is not the final tax; the general rate for capital gains is 19% (article 25, sections 1.f and 2).

If you receive a gift instead

A gift to someone who is not resident in Spain is also handled, in general, by the National Tax Management Office, on form 651, within thirty working days from the day after the gift (Inheritance and Gift Tax Regulations, article 67.1.b). If the gift is a property located in Spain, a non-resident recipient can apply the rules of the region where the property is; if movable assets located in Spain are given, such as money in a Spanish bank account, the rules of the region where they were located for the greatest number of days in the previous five years (Law 29/1987, second additional provision, paragraph One, letters c and e). If the gift is a property located in the Basque Country or Navarre, or the greatest value of what is given is located there, it belongs to their foral tax authority; if a single document gives assets that belong to different tax authorities, each authority charges the tax on the assets that belong to it, at the average rate for the whole gift (Law 12/2002, article 25, sections One, letters b and d, and Three; Law 28/1990, article 31, sections 1, letters b and c, and 2). Under the Civil Code, a gift of money does not need a public deed: an oral gift requires simultaneous delivery, and otherwise it must be made in writing (article 632). Regional allowances and reliefs, however, can require a public document and other conditions that have to be met before signing.

Double taxation: what Spain does not credit

In Spain, the deduction for a similar tax paid abroad applies only where the tax is charged by personal obligation (Law 29/1987, article 23.1); according to the Tax Agency, that means heirs habitually resident in Spain at the date of death. A non-resident heir pays in Spain on what is in Spain; whether the country of residence relieves the double charge depends on that country's law or on a treaty. Spain has a treaty with France that covers inheritance tax (published in the Spanish Official Gazette on 7 January 1964): real estate is taxed only in the State where it is located (article 30), and intangible assets not covered by the rules for business and professional assets (articles 31 and 32), which include securities and other claims, only in the State where the deceased was resident at the time of death (article 34); patents, trademarks and intellectual property have their own rules. In its summary of the treaty, the Spanish Tax Agency places bank accounts and investment funds in that second group. So, in an inheritance involving two countries, the law of both is checked before deciding where each asset is declared.

How we handle it

Everything is done remotely: documents arrive by email, we explain each step in writing, in English, and we act before the Tax Agency under a power of representation. Before filing, we calculate the inheritance under the State rules and under the applicable regional rules, and you know the amount and the basis for it before anything is filed. You deal with the same adviser throughout. If you also have income or a rental in Spain, see our page for non-residents.