Inheritance tax in Spain for expats

 

Unlike in the UK where inheritance tax (IHT) is based on the deceased's estate, IHT in Spain (or Impuesto sobre Sucesiones y Donaciones) is assessed on the recipient (the heir). Heirs are generally liable as follows;

 

  • Spanish resident heirs are taxable on everything received, irrespective of location.

  • Non-resident Spanish heirs are taxable only on Spanish located assets.

The following is the national inheritance tax rules. The Spanish central government grants each autonomy the power to amend the national rules, so if you are Spanish tax resident you will need to review any amendments in your autonomy.

 

Allowances

 

Allowances are available in Spain but these are very low and are based on the relationship between the deceased person and their heirs.

 

Kinship group

Relationship

Allowances (on death only)

1

Direct descendants under 21 years

€15,956.87 plus €3,990.72 for each child under 21 yrs of age up to a max allowance of €47,858.59

2

Direct descendants over 21 years, spouse, ascendants

€15,956.87

3

Other relatives, second and third level (e.g. brother, uncle, nephew)

€7,993.46

4

More remote family and unrelated persons.

Nil

 

Therefore on the death of your spouse, you would only be entitled to receive an allowance of €15,956.87. There also exists an allowance for the transfer of the family business as well as a possible 95% reduction for the transfer of the main residence to the wife and children.

Remember, if you are still UK domiciled when you die your estate could still be liable to IHT even if you and your family are resident in Spain. Don't get caught out - Call us for more information.

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Please note that every care has been taken to ensure that the information provided is correct and in accordance with our understanding of current Spanish tax law 2015. You should note however, that we cannot take on the role of an individual taxation adviser and independent confirmation should be obtained before acting or refraining from acting upon the information given. The Spanish tax law is subject to change. Legislation varies from country to country and the policyholder’s country of residence may impact on the above.

Please feel free to contact us at anytime including evenings and weekends. You can fill in the form on the right, email us or call us direct on the above number. Home consultations are available and are free of charge all over Spain. We are appointed representatives of Blacktower Financial Management (International) Ltd (BFMI). The group was formed in 1986 to provide independent wealth management advice and a bespoke service for both individual and corporate clients. More...

info@finance-spain.comMinitienda 15, Centro Comercial Plaza, Nueva Andalucia, Marbella 29660, Malaga, Spain