Spanish Inheritance Tax

• How to inherit Spanish property if you are British?

• Spanish inheritance law

• How can British citizens inherit property in Spain?

• What are the requirements for making a will in Spain?

• Inheritance tax in Spain

• Checklist for a British person inheriting Spanish property

1. How to inherit Spanish property if you are British?

Spain is among the most popular European destinations for British property purchases. In addition to taxes, inheritance matters are a significant concern for property owners. This guide describes the inheritance process in Spain and the applicable inheritance tax rates for testators and heirs.

Inheritance is the transfer of property, rights and obligations of the deceased to their heirs. Generally, it requires re-registration of ownership and payment of taxes.

Inheritance law varies by country, but usually in the absence of a will, the legislation of the country of the testator’s last residence applies. As an EU member, British citizens previously could choose between their home country’s legislation or country of residence for will execution (effective from January 1, 2015).

2. Spanish inheritance law

In Spain, spouses and first-line heirs (children and parents) acquire inheritance rights through notarial procedures. Disputes and cases involving absence of direct heirs are handled through civil court proceedings.

It is strongly recommended to find an English-speaking lawyer (solicitor) to understand the details and avoid interpreter costs.

Rules and limitations

Spanish legislation limits testamentary freedom through the institution of forced heirs — herederos forzosos (Ley de Herederos Forzosos), which defines mandatory inheritance distribution:

• Spouse receives half of jointly acquired property
• Children receive one-third in equal shares (so-called “legítima estricta”)
• Another third is distributed among children at the testator’s discretion; spouse has usufruct rights over this portion
• The remaining third is distributed freely
• In the absence of children: ancestors receive one-third; in the absence of spouse — one half

Tax burden directly depends on the size of the heir’s enrichment. The higher the value of inherited property, the higher the effective tax rate. “Luxury items” (secondary real estate, yachts, jewelry) are not subject to deductions. Distant relatives pay approximately twice as much compared to close relatives.

Household property is valued at 3% of net real estate value (can be disputed with evidence). Jewelry, clothing, accessories, vehicles, yachts, artwork and antiques are not included in this calculation.

Brexit consequences: The United Kingdom became subject to national tax rates after leaving the EU/EEA. Gifting Spanish real estate to children during lifetime (while retaining right of use) may reduce capital gains tax compared to inheritance tax.

Difference between testate and intestate inheritance

Testate inheritance (testamento) means the deceased left valid written instructions defining heirs and property distribution. Intestate inheritance (sucesión intestada) occurs in the absence of such document, and then the forced heirs law applies (Ley de Herederos Forzosos).

3. How can British citizens inherit property in Spain?

Spanish inheritance law applies when:

• All assets of the deceased are located in Spain

• The deceased held Spanish citizenship

In other situations, the matter is regulated by case law, which generally requires legal representation — especially in the absence of a will. Legislation is regularly updated.

Choice of applicable law requires professional document preparation considering local requirements and notarial registration.

4. What are the requirements for making a will in Spain?

The will is prepared in two columns (in native language and Spanish) with certified translation.

Professional lawyer involvement is necessary to prevent the will from being declared invalid due to drafting errors.

Will preparation options:

• Prepare a will in Spain in accordance with local legislation and sign it before a notary

• Prepare a will in accordance with English law in two ways:

  • The will can be prepared on computer and signed in the presence of two witnesses. It must also be submitted for approval to the competent UK authority (probate) to take effect

  • Prepare a will that concerns only Spanish real estate, either before a Spanish notary or in accordance with British legislation. In this case, Spanish law will determine the inheritance procedure

Open and closed wills — what’s the difference

Open will (testamento abierto) is executed publicly in a notary office. Closed will (testamento cerrado) remains sealed in an envelope, signed after being placed inside. The notary registers the will and issues a copy to the testator.

In case of marriage or divorce after making a will

Upon divorce or marriage, the will becomes invalid and requires new notarial registration.

Divorce deprives the former spouse of inheritance rights, even when there are common children. The former spouse cannot inherit directly, but gains access to property inherited by children as legal representative until their majority — including the possibility of selling or renting real estate.

Prevention method: appoint a property manager (adult relative or third party) in an updated will to limit former spouse’s control.

Marriage similarly invalidates the previous will unless it was expressly reconfirmed.

Benefits of making a Spanish will

• Low cost

• Quick processing

• Convenience

Foreign wills require translation, legalization, obtaining a grant of probate — all of which takes time and money. A six-month deadline applies for children (5% penalty for each three months of delay).

A tax specialist can optimize asset distribution to reduce tax burden, although making a Spanish will remains optional.

If you don’t make a Spanish will

In the absence of a Spanish will, Spanish authorities apply the legislation of the deceased’s country of residence. International private law norms allow renvoi.

Spanish authorities require a lawyer-signed conclusion with reference to the country of origin’s legislation (with apostille). Foreign wills need official translation and apostille. Missing deadlines incur penalties.

In the absence of any will, Spanish forced heirs law applies (Ley de Herederos Forzosos).

5. Inheritance tax in Spain

In Spain, inheritance tax calculation differs for residents and non-residents. National standards and autonomous community laws operate simultaneously; each region sets its own deductions and benefits.

Resident heirs are subject to their autonomous community’s rules; non-residents — to national standards. Autonomous community determination depends on property location or heir’s place of residence.

Current rates, benefits and deductions are published on each autonomous community’s government website.

Progressive scale: from 7.65% to 34% depending on taxable base.

Who receives tax benefits in Spain?

Benefits depend on the degree of relationship between heir and testator. Four groups are distinguished:

Group 1: Children and adopted children under 21 — €15,956.87 plus €3,990.72 for each year until reaching 21 (maximum €47,858.59).

Group 2: Adult children and adopted children, grandchildren, spouses, parents, grandparents — €15,956.87. Some autonomous communities recognize unregistered couples (parejas de hecho).

Group 3: Siblings, uncles and aunts, nephews and nieces, in-laws, ascending/descending relatives through generation — €7,993.46.

Group 4: Cousins, other relatives, unregistered partners (if autonomous community doesn’t recognize them de jure) — no benefits.

Disability benefits: from €47,859.59 to €150,253.03 depending on degree of disability.

Each province sets more favorable benefits than federal ones.

Regional tax benefits (examples for EU citizens):

• Canary Islands, Madrid: 99.9% benefit for spouses, parents and children

• Catalonia: 99% benefit for spouses, parents and children with inheritance under €100,000; 84.5% for amounts up to €1,000,000

• Andalusia: €250,000 benefit for direct family members

• Valencian Community: no tax for spouses; no tax for ancestors and descendants with inheritance under €100,000; 75% benefit on amount exceeding this threshold

Groups 1–3 receive 95% deduction on residential real estate (maximum €122,606.47 per heir) subject to conditions:

• Property served as testator’s permanent residence (registered address)

• Heirs retain property for subsequent 10 years

How to calculate inheritance tax?

Example data:

Testator and heir: UK citizens, Spanish tax residents. Heirs: spouse + 25-year-old child. Inherited property: villa (€500,000) + household property (€16,000). Distribution: equally between spouse and child. Location: Alicante, Valencian Community.

Calculation:

Valencian Community exempts spouse from tax. Child receives 75% benefit on inheritance exceeding €100,000 (benefit: €193,500 out of inherited €258,000).

Taxable base: €64,500.

Valencian Community progressive tax table:

Step-by-step calculation:

1. Determine range corresponding to taxable base: €64,500 falls in range #10 (up to €70,480.69).

2. Calculate taxable base for range #10: €64,500 − €62,649.50 = €1,850.50.

3. Apply 10th range rate: €1,850.50 × 15.30% = €283.13.

4. Sum fixed quotas for ranges 1–9: €7,786.74.

5. Add values from steps 3 and 4: €9,637.24.

Multiplier application: Multiplier coefficient depends on heir’s existing net worth:

With existing wealth of €258,000 and Group I heir status: €9,637.24 × 1.0 = €9,637.24 payable.

Inheritance tax rate for residents

Tax residents apply regional legislation of the autonomous community where the testator resided. Valencia’s progressive system is shown in the calculation example above.

Inheritance tax rate for non-residents

Non-residents without tax residence in Spain/EU/EEA are subject to national rates under Law 29/1987 (Ley 29/1987, Impuesto sobre Sucesiones y Donaciones):

• Up to €7,993: 7.65%
• €7,993–€31,956: 7.65–10.2%
• €31,956–€79,881: 10.2–15.3%
• €79,881–€239,389: 15.3–21.25%
• €239,389–€398,778: 25.5%
• €398,778–€797,555: 29.75%
• €797,555+: 34%

6. Checklist for a British person inheriting Spanish property

First steps: Notify the Central Registry of Wills of Spain in Madrid (Registro General de Actos de Última Voluntad) about the existence of a will. Obtain notarized death certificate with apostille.

Deadlines: Notaries and civil courts process inheritance at the testator’s place of residence. The procedure must be completed within six months from death (penalties are charged for delays).

Documents when foreign will exists:

• Death certificate (translation, notarial certification, apostille)

• Will (translation, notarial certification, apostille)

• Grant of probate (translation, notarial certification, apostille)

In absence of will: Death certificate, optionally — grant of probate, optionally — Certificate of Law explaining intestate succession legislation.

Notarial processing: Preparation of “Escritura de Declaración o Manifestación de Herencia” (Deed of Declaration and Acceptance of Inheritance) at notary office.

Property valuation: Conduct professional valuation reflecting market conditions. The highest of the following values is used: cadastral value, state valuation, taxpayer’s valuation, acquisition cost (under Law 19/1991, Ley 19/1991).

Tax calculation: Calculate total value and tax obligation considering deductions and benefits.

Payment deadline: Tax is payable within six months from date of death.

Declaration filing: Complete form 650 (modelo 650) online or in paper form for submission to tax authority (Agencia Tributaria).

NIE/NIF requirements: Non-residents need NIE (Número de Identidad de Extranjero); Spanish citizens — NIF (Número de Identificación Fiscal). Registration requires:

• Identity document / passport

• Certificate from Spanish consulate (confirming registration in country of residence)

Specialist consultation: Inheritance in Spain is a process involving inheritance, family, tax and property law. Lawyer or tax specialist consultation is necessary.

Legislation is regularly updated, so checking information currency before beginning the procedure is recommended.