Who Needs to Pay Spanish Inheritance Tax?

No matter if you are a resident or not, if you inherit something in Spain you will be required to pay the Spanish inheritance tax. Typically, the difficulties of such payments are related to three factors:

  • Spanish regulations only give you six months to pay from the day of the death.
  • You will need to obtain an NIE.
  • Spain has 17 regions and some of them have special regulations related to succession taxes (usually favourable for the tax-payer).

The third point makes things especially difficult and interesting, because each region may have different exemptions and discounts. As a result, when it comes to inheritance tax some people are almost tax free while others have to pay more than a 35 % of the value received.

In principle, according to the second additional provision of the Ley 29/1987, de 18 de diciembre, del Impuesto sobre Sucesiones y Donaciones, added to the regulation by the law Ley 26/2014, de 27 de noviembre, if the person deceased was resident in Spain and the heir is not resident, but he is resident in one country that belongs to the EEA, the heir will have the right to follow the regulations of the region in which the deceased person was resident.

In the case that the deceased person was resident of a state belonging to the EEA and so is the heir, the heir will need to follow the regulations of the Spanish region in which there is the highest value of inheritance.

When the heir is resident of a country that does not belong to the EEA, the regulations that apply will be the national ones, which are usually the less favourable in economic terms because they have much smaller discounts or they do not exist at all.

As you can see, there are different scenarios and each of them can have very different outcomes in terms of money. So if you are not sure, we highly recommend that you ask a professional. For that matter, we are here to help.

Call us now to talk about your case!

What Will Happen After Brexit?

The Court of Justice of the European Union (CJEU) thinks that the difference made in Spanish succession tax regulations between residents of countries in the EEA and non-residents is discriminatory. As a consequence, through the Sentence nº 242/2018, Rec 62/2017, de 19 de Febrero de 2018, it was made possible for non-residents to claim against the Spanish tax authority for the amounts paid in excess. It can take time, but since this favourable jurisprudence, it has good chances of success. The good news is that we can also help you with this!

Call us now and we will inform you about your specific case!

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