Are you aware of the key aspects you need to take into account as an expat dealing with an inheritance in Spain? When a family member of yours dies and you are an heir, it is important to know what taxes or fees you must pay, as well as the steps to follow in the inheritance process. The Inheritance and Gift Tax, a national tribute, and ‘La Plusvalia’, the Increase in Value of Urban Land, have to be always paid or filed.
The State has delegated 100% of its collection and the exercise of certain normative competences to the Autonomous Communities. In our case, Andalusia. Regarding the inheritance tax, you will have to apply the state reduction first and then the one specific to Andalusia, thereby enhancing the overall reduction.
Do I have to pay taxes when receiving my inheritance in Spain?
Yes, inheritances are subject to taxes. The Inheritance and Gift Tax, regulated by Law 29/1987 of December 18, on Inheritance and Gift Tax, must be paid by the heir.
Not only must we consider the Inheritance Tax when accepting an inheritance. We also need to take into account the Tax on the Increase in Value of Urban Land (IIVTNU), commonly known as “La Plusvalía.”
Although the Inheritance and Gift Tax is a national tax, its competence is delegated to the autonomous communities in most of the national territory. Such as in the case of Andalusia, which may have its own bonuses and reductions.
How can I find out if a deceased person has made a will?
With the death certificate, you should request a certificate of last wills, which will indicate whether the person made a will, the date, and the notary where it was done, or if they passed away without a will. If you are not in Spain, we can assist you in obtaining it through our law firm in Malaga, as well as guiding you through the entire inheritance process and tax filing.
What happens if there is no will?
In this case, intestate succession is initiated, and the succession occurs according to legal provisions. The inheritance will be received by the statutory heirs in the order established by law. If there are no statutory heirs, the closest family members will inherit, and in the absence of relatives, the State inherits.
When do I have to pay the inheritance tax in Spain? Can I pay the inheritance tax later?
Over het algemeen, the deadline is 6 months, extendable for an additional 6 months within the first 5 months from the death of the deceased. The extension must be justified by a valid reason that prevents the fulfillment of the obligation to file within the initial 6-month period from the date of the deceased person’s death.
How much do I have to pay with the Inheritance Tax?
It depends on the inherited assets, the relationship with the deceased, and the Autonomous Community in which it is taxed. Later on, we will explain what kind of reductions and bonuses are available.
What is the right to deliberate? Is there a time limit to accept or renounce an inheritance in Spain?
De right to deliberate is the heir’s right to assess whether it is convenient or not to accept the inheritance. When accepting an inheritance as an heir, one acquires all the assets and rights that the deceased had, along with all the debts the deceased had.
This is why, even in the case where it is known that the value of what is received is higher than what is owed (mortgages, debts, etc.), it is advisable to accept the inheritance with the benefit of inventory. This means that, under no circumstances, if the debts exceed the assets received from the inheritance, the heir would have to assume them with their own assets. To do this, the heir has 6 months to accept the inheritance from the moment they become aware of the death of the deceased and their status as the heir.
Can I leave my share of the inheritance to another heir?
Renouncing in favor of another heir implies, from a tax perspective, that the inheritance is accepted by the renouncing heir, who then renounces it and donates it to another person. This results in the double payment of taxes – both inheritance tax for the inheritance and gift tax for the donation to the other heir.
Another possible scenario is to make a pure renunciation without designating other heirs. If the will includes a substitution clause, where if the heir does not accept and renounces, it is transferred or passed on to the designated substitute. In this way, there is only one inheritance, and in no case an additional donation (only the tax for the donation will be paid).
With this article, we hope to have addressed the majority of frequently asked questions about successions or inheritances in Spain. If you still have doubts or need assistance with making a will or the payment of taxes for residents or non-residents in Spain, please consult with us.
MALAGA SOLICITORS GROUP
Jose M. Lopez-Avalos – Advocaat
Tel. 952 901 225 – mail@malagasolicitors.com
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