The Spanish Inheritance tax is payable by the inheritors for all the assets the deceased had in Spain including properties, money held in bank accounts, vehicles, boats, lump sums from life insurances or any other assets. You need to bear in mind that the tax is paid by the inheritors and not by the inheritance.
This applies either for residents or non residents.
The tax must be paid within the 6 following months followed the decease, and it may be completely different as local regulations vary from province to province (Comunidades Autnomas). There are tax allowances to apply over the tax to be paid, depending on the relationship with the deceased person.
Assets and liabilities will need to be given a value on the date of the death. Charges and funeral costs will offset from total value of the assets. The resulting amount will be liable to pay tax according to a sliding scale.
Inheritors will need to wait till the tax is fully paid before they can deal with the assets. They won’t be able to sell any property or have access to money in bank accounts before the tax is paid.
Calculating the amount to pay is not an easy task as this is applied differently depending on where in Spain your property is located. The Inheritance Tax is regulated by a National Law but different local governments are free to set up different tax rates, tax levels, deductions, reductions and many other factors.
Due to the complexity of this tax we advise everybody to obtain legal advice in order to reduce potential problems and save on taxes for your beneficiaries.
At Corral&Alcaraz Law Firm, we are experts in tax matters and strongly advise you to make us a consultation, to be assessed on the best way and therefore reduce your tax liability as much as possible.