Spanish inheritance tax: How does it work?

Written by Juan Madridejos Velasco and Luis Alberto Álvarez Moreno, Notaries in Barcelona and partners at J&LA Notarios Asociados.

Are you eligible for inheritance and wondering how the Spanish inheritance tax works? Well, you are not alone.

The Spanish taxation system seems to be among the most complex globally, but you can easily understand it. While the question of how much inheritance tax one should pay differs depending on various factors, there are several things that you should know.

From our Notary in Barcelona, we offer services related to Wills and inheritance agreements and we also solve any question related with taxes related with Spanish inheritances.

Defining Inheritance Tax in Spain

Also known as the succession tax, the inheritance tax is among the most paid taxes in the country. It is paid for by anyone who receives an inheritance from a relative or friend. The inheritance is mostly in the form of property, monetary, or any other inheritance asset. Both the non-residents and residents are required by the law to pay these taxes.

Other forms of assets that you must pay inheritance include any donations or money that could be coming from life insurance. For such scenarios, you will not access the inherited assets until you make payments for the entire amount. The law offers you a six months leeway (with an extension of 183 days on request) to complete everything. It is also crucial to note that you can request payments in instalments.

The inheritance tax must be paid if the beneficiary is a resident of Spain or if the assets are in Spanish territory. As mentioned above, both residents and non-residents will pay these taxes. They are also eligible for equal rates and allowances.

While the law was different for each group in the past, the new laws have standardized this. Following new taxation laws that came into place in 2015, non-residents no longer have to pay 80% of taxes. The law eliminates discrimination.

How Much Inheritance Should You Pay?

It is important to note that the amount you pay depends on each person. It depends on the situation at hand, the kind of relationship you had with the deceased, as well as your precise location.

When calculating the rates of Spanish inheritance tax, other factors will come into play. They include your age, your residency and your relationship. Others may include the beneficiary’s disability and existing wealth accumulation. The more distant the relationship with the deceased, the more tax you will owe.

If the beneficiary is under 21, they will be eligible for significant reductions in some Comunidades Autonomas, and no debt tax will arise regardless of the acquisition amount.

As for the descendant’s relationships, the inheritance tax uses the grade and line concepts.

For example, a non-married partner and their children are classified as non-related beneficiaries. Any adoption link will be treated as a blood link.

The existing wealth of the beneficiary will be combined with their relationship to determine the final amount paid. You must multiply the coefficients by the applying rate to the acquisition amount. Other factors, such as disability, could also reduce their tax obligation depending on the disability level. The disability must have been recognized officially before the death of the deceased.

Since it differs from one to another, it is impossible to give you a particular amount or rate because lots of circumstances have to be considered in each particular inheritance.

Format for Inheritance Taxation in Spain

When calculating the basic tax format, it should include the value of the individual acquisition plus the proceeds from any insurance policy together. It is often known as Base Imponible and paid in Cuotas.

As an heir or heiress, you must know that the rate is not fixed due to the increment of the proceeds. Generally, the higher the acquisitions, the higher the amounts you will need to pay.

As we mentioned at the beginning, we’ll more than happy to help if you have to process any Inheritance agreements, International inheritance agreements or Succession agreements. Our team speaks English and our office is located in the centre of Barcelona. You can write to or through our contact form.

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