Inheritance Laws in Spain and Succession Rules

Spanish inheritance law for non-residents, residents, and citizens may vary greatly. Read our article to get more information on Spain’s inheritance taxes.

What Are the Inheritance Laws in Spain?

Spanish Civil Code applies to matters relating to inheritance and succession in Spain. Although national rules apply across the country, inheritance tax & laws in Spain may differ substantially by region. Several autonomous communities in Spain like Catalonia, Galicia, Navarre, and more have their own inheritance and succession rules.

In a matter concerning succession, the rules that should be applied are determined through some key factors. These are;

• Nationality of the deceased,
• Nationality of the beneficiary,
• Existence of a will prepared by the deceased,
• Place of occurrence of the death,
• Place of the deceased person’s estate/total assets.

Due to these factors, determining which rules apply and what course of action should be taken for succession in Spain may be complicated. In addition to this, in line with Spanish law, the inheritance process should be completed within 6 months. For this reason, it’s best to contact a legal consultant as soon as possible.

A matter of grave importance regarding inheritance in Spain is the taxation law. According to the Spanish tax system, the acquisition of wealth, including gifts and inheritance, is a taxable occurrence. You must pay the relevant taxes in order to claim an estate/asset. Spanish authorities do not allow succession unless all of the relevant tax has been paid or a payment plan has been made.

If the taxes remain unpaid, the estate/asset can be taken over by the authorities and sold. The mandatory tax in this matter is called the Inheritance and Gift Tax, “Impuesto sobre Sucesiones y Donaciones (ISD)” in Spanish.

How Much Inheritance Tax Do You Pay in Spain?

The inheritance tax that should be paid for succession varies depending on the key factors stated above. The assessment of taxes in Spain’s inheritance tax system can be done through two approaches: personal obligation and real obligation.

Personal obligation means that the beneficiary is liable to taxes for their place of residence in Spain. Real obligation, on the other hand, is relevant to the place of the estate/asset. This means that citizens, residents, and non-residents are exposed to this tax on different ratios.

You should consult an expert to learn which ratios apply to your case. Also, double taxation may be relevant in some cases. It’s important to work with an experienced legal consultant in order to avoid or deduct international double taxation.

In addition, tax ratios differ depending on the type of estate to be inherited from the deceased. Money, insurance, real estate property, and asset of any kind are all liable to different tax ratios.

Inheritance Tax on Property in Spain

Inheritance tax on properties is generally a major matter in inheritance. High tax rates can be troubling for people with low regular incomes. In these cases, inheritance laws in Spain offer some facilitations. These facilitations are usually in the form of installments, reliefs, or allowances.

The rate of tax relief and allowances differ depending on the beneficiary’s relationship with the deceased. Beneficiaries are divided into four groups across Spain. However, the relief and allowance rates might change region by region due to authorization differences. It’s best to check with regional authorities to exactly know how much tax allowance could be gained.

Inheritance Tax in Spain for Non-Residents

Residents and citizens of Spain have to pay inheritance tax in order to claim property through succession. On the other hand, non-residents only have to pay inheritance tax if they are to inherit a property or an asset in Spain. The existence of an international or Spanish will that is prepared by the deceased is an essential matter in the distribution of estates in Spain.

If an expat passes away without a will (intestate) in Spain, the inheritance process would be lengthy and complicated. In some cases, the will can determine which inheritance law is going to be applied to the distribution of estates in Spain. According to the new inheritance laws in Spain, EU citizens living in Spain, and people from some non-EU countries, can choose which inheritance law will apply to their assets.

If the assets are to be distributed under Spanish inheritance law, the Law of Obligatory Heirs in Spain applies. This would mean that there are restrictions on how a person can distribute their wealth and a certain percentage must be reserved for close relatives.

We’ve tried to explain the laws regarding inheritance and succession in Spain very briefly for general cases. However, inheritance and succession is a complicated and usually a time-consuming process if you’re unfamiliar with the laws. And, there are many matters to take into account.

Our lawyers and legal consultants are well-informed on regional laws and have years of experience in the field. You can contact us to deal with these distressing matters in your stead.