Inheritance in Spain

This tax applies to the beneficiaries of the inheritance or gift.

The first steps are to know whether a Spanish will was drawn up, and whether the deceased was a resident or non-resident of Spain. The will must be processed, the proper division of assets must be negotiated, then the new ownership of the properties in Spain must be registered.

The taxes must be paid within 6 months of death.

The challenging part of inheritance is the inheritance tax. If the deceased person is:

• A resident of Spain: If the heirs are non-EU, the Spanish national tax rate for inheritance applies. If the heirs are resident in Spain, then the Spain regional rate where the deceased person lived at the time of death applies.
• Non-resident of Spain, but resident in the EU: If the heirs are non-EU, the Spain regional tax rate applies. If the heirs are residents of Spain, then the Spanish national rate applies.
• Non-resident of Spain and non-resident in the EU: The Spanish regional tax rate applies. This means that after Brexit, if you inherit a property in Spain from a deceased UK citizen who was not a resident of Spain, you will be subject to the regional rate.

The distinction is important because the inheritance tax rate varies widely between the different regions of Spain. In Andalucía, the inheritance tax is 30-45% of the property (with the first 175,000€ exempt), so after Brexit, if Judy Smith inherits a flat in Málaga from her father (a citizen and resident of the UK) valued at 375,000€, she will pay about 70,000€. If the same flat is located in Madrid, she will pay 0€.

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The procedure for dealing with property of non-residents after death

The first step is to establish the existence of a Spanish will. The Central Registry of Spanish Wills in Madrid should be contacted. If a will exists, the deceased's death certificate will be required in order to apply for a legal copy of the Spanish will.

A valuation of the deceased's estate in Spain will also be required.

If there is a Spanish will, then proceed with the administration of the estate in Spain. Only a notarised and apostilled copy of the death certificate is required.

If there is only a foreign will or intestacy, the following documents will have to be translated, notarised and apostilled before the administration of the estate in Spain can proceed:

• The death certificate
• The foreign will
• Grant of Representation or equivalent
• It may be necessary to provide a Certificate of Law to explain the law of intestacy in a particular country.

The legal formalities of transferring property to beneficiaries in Spain are completed before a Spanish Notary. The Notary ensures, for example, that the beneficiaries are entitled to the deceased's assets.

Inheritance tax for non-residents

Beneficiaries who do not have their usual residence in Spain are liable to this tax. Residents in Spain are also liable for this tax when the deceased person did not have their habitual residence in Spain.

The filing deadline for the inheritance tax return is 6 months from the date of death. Upon submission of Form 650, the Tax Agency will calculate the tax payable. Or, the taxpayer can opt for self-assessment, submitting the simplified Form 652. The forms can be downloaded from the Spain Tax Agency website.

If a taxpayer who is required to make payment does not have a NIF, they must take the following steps:

Non-resident foreign national taxpayers must apply for a NIE, either from a police station that processes foreign nationals or from a Tax Agency office. The documents required to apply are:

• An authenticated photocopy of the passport of the taxpayer (the beneficiary).
• A photocopy of the Deeds of Acceptance of the Inheritance.
• A NIE application form.
• In the event of a taxpayer acting through a representative, the authorisation or power of attorney.

Non-resident Spanish taxpayers must apply for a NIF from a Tax Agency office by presenting the following:

• A Certificate from the Spanish Consulate in the country where you reside, confirming that you are registered on their Registry of Spanish citizens.
• An authenticated photocopy of the consular passport of the taxpayer (the beneficiary).