Inheritance taxation falls under Spanish law
In Spain, inheritance taxation falls within the competence of the Autonomous Communities. Tax rules may therefore vary depending on the region in which the assets are located or where the tax return must be filed.
Inheritance taxation is independent of:
- the nationality of the deceased,
- the nationality of the heirs,
- and the choice of the civil law applicable to the succession.
Inheritance tax in Spain
Allowances and tax reductions
Most Autonomous Communities apply:
- a significant tax allowance,
- as well as a substantial reduction in inheritance tax.
In the Valencian Community, for example, an allowance of EUR 100,000 and a tax reduction of 99 percent may apply. In practice, inheritance tax only becomes payable when the value of the inherited assets exceeds a certain threshold.
Degree of kinship
The amount of inheritance tax depends in particular on:
- the relationship between the deceased and the heir,
- the value of the assets transferred,
- and the specific rules of the competent Autonomous Community.
Inheritance tax return in Spain
After the execution of the deed of partition before a notary, the heirs must:
- prepare,
- submit,
- and file the inheritance tax return with the Spanish Tax Administration.
In Spain, this formality is not handled by the notary. The inheritance tax return is filed using Form 650.
Deadlines and penalties
Filing deadline
The inheritance tax return must be filed within six months from the date of death.
Late filing penalties
If the deadline is exceeded, penalties may apply:
- one percent per month of delay,
- beyond twelve months: fifteen percent in addition to late payment interest.
Deadline extension
A single six-month extension may be requested, no later than the fifth month following the date of death. In such case, the inheritance tax return may be filed without penalties up to one year after the date of death.
Tax procedures and timescales in Spain
The tax regularisation of an inheritance in Spain follows a precise timeline:
- Execution of the deed of partition before a Spanish notary
- Preparation of Form 650 (inheritance tax return): 1 week
- Filing of the tax return: within 6 months following the date of death
- Obtaining the certificate of payment or non-taxation: 2 weeks
- Extension available: request to be made before the end of the 5th month (6-month extension)
Required documents for the tax return
- Deed of partition executed before a Spanish notary
- Death certificate and certificate of last wills
- NIE (foreigner identification number) of all heirs
- Documentation evidencing the value of the assets (cadastral certificate, property valuations)
- Bank statements (accounts, investments, life insurance policies)
- Proof of kinship (family record book, birth certificate)
Statute of limitations
The tax statute of limitations expires four years and six months after the date of death.
During this period, the Spanish Tax Administration may issue a formal notice to regularise the inheritance and, in doing so, interrupt the limitation period.
Certificate of payment or non-taxation
After the inheritance tax return has been filed, the Spanish Tax Administration issues either:
- a certificate of payment,
- or a certificate of non-taxation.
These certificates do not prevent a subsequent tax audit.
Franco-Spanish tax treaty
The Franco-Spanish tax treaty of 8 January 1963 provides in particular that:
- immovable property is declared and taxed in the country where it is located,
- financial assets are declared in the State of the deceased's last tax residence.
A thorough analysis of the situation in light of this treaty is essential in order to avoid double taxation.
Taxation and overall succession planning
Inheritance taxation forms part of a broader succession framework.
It must be analysed in conjunction with:
- the applicable civil law,
- the content of the will,
- the nature of the assets,
- and the personal situation of the heirs.
Inheritance in Spain: legal assistance for French-speaking heirs.
