Spanish inheritance tax, exemption limits and tax rates

Guide to inheritance tax in Spain

Spanish inheritance tax or probate tax in Spain is incredibly complex as there are both national and regional variations. For regional rules to apply it is normally necessary for the deceased to have been habitually resident in the region for five years and sometimes it is also necessary for the beneficiary to have been resident and to continue to remain resident.

Spanish inheritance tax

Spanish inheritance tax is payable if either the recipient is resident in Spain or if the asset passing on death is property in Spain. It is payable by the recipient and not the estate.

No husband-wife exemption

As regards inheritance in Spain there is no husband wife exemption and where both are resident in Spain then the surviving spouse is fully liable on the worldwide assets of the deceased spouse.

Tax payable

The amount payable depends on a number of factors such as:

• Value of asset inherited
• Pre-existing wealth of  beneficiary
• Relationship between deceased and beneficiary

Deductions or allowances
The surviving spouse, children, grandchildren, parents and grandparents can each claim a deduction of EUR15,956.87
Other relatives (brother, sisters, aunts, uncles, nieces, nephews & step children) can claim a deduction of EUR7,993.46
Non-relatives and distant relatives (ie cousins) are not entitled to any standard deduction.
Children between the age 13 and 21 can claim an addition EUR3,990.72 for each year less than 21 up to a maximum total deduction of EUR47,858.59.

Spanish inheritance tax rates

Multiplier

Group I – Children & adopted children of less than 21 years of age [deduction EUR15,956.87]
Group II – Children & adopted children of more than 21 years of age, spouse, parents, grandparents [deduction EUR15,956.87]
Group III – Brothers, sisters, aunts, uncles, nieces, nephews & step children (not adopted) [deduction EUR7,993.46]
Group IV– All others beneficiaries and distant relatives (including cousins) [no eduction]

Prescripción or 4 year limit
The liability to all Spanish taxes expires four years after the date upon which taxes should have been paid. Spanish law requires that an inheritance be declared and all taxes paid within 6 months of death. Therefore after 4 years and 6 months no inheritance tax is payable. However in the intervening period the beneficiary is exposed to significant penalties and interest.

Surcharge & interest on late payment

Statutory interest ( Interés de demora ) is calculated from end of surcharge period (ie 12 months from the date that the tax should have been paid) until date payment is actually made at 5% from 4 April 2009 (previously 7%).

See also