Spain is a popular destination for foreigners who want to acquire property or retire. However, it is important to be aware of the inheritance tax implications before receiving an inheritance in Spain.
Who is subject to inheritance tax in Spain?
Inheritance tax in Spain is payable by all heirs, regardless of their residency status. This means that both residents and non-residents of Spain are liable to pay inheritance tax on assets located in Spain.
What is the tax rate?
The inheritance tax rate in Spain varies depending on the value of the inheritance and the relationship between the heir and the deceased. Direct heirs, such as children and spouses, benefit from a higher tax allowance.
The following table provides an overview of the inheritance tax rates in the comunidad Valenciana:
| Value of inheritance | Tax rate for direct heirs | Tax rate for other heirs |
|---|---|---|
| Up to €7,993 | 7.65% | 7.65% |
| €7,993 to €31,956 | 7.65% to 10.2% | 7.65% to 10.2% |
| €31,956 to €79,881 | 10.2% to 15.3% | 10.2% to 15.3% |
| €79,881 to €239,389 | 15.3% to 21.25% | 15.3% to 21.25% |
| €239,389 to €398,778 | 25.5% | 25.5% |
| Over €398,778 | 34% | 34% |
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How to declare an inheritance in Spain?
The inheritance declaration must be filed with the Spanish tax agency (Agencia Estatal de Administración Tributaria, AEAT) within six months of the death. The declaration must be accompanied by the following documents:
- Death certificate
- Certificate of last will and testament
- Inventory of assets and debts
- Certificate of residence (for non-resident heirs)
Tips for foreigners
It is important to note that the inheritance tax rules in Spain can be complex. It is therefore advisable to consult a Spanish lawyer or tax advisor before receiving an inheritance. A lawyer or advisor can help you to understand the applicable tax rules and to file the inheritance declaration correctly.
Here are some additional tips for foreigners receiving an inheritance in Spain:
- Be aware of the time limit for filing the inheritance declaration.
- Gather all of the necessary documentation before filing the declaration.
- Consider hiring a Spanish lawyer or tax advisor to help you with the process.
- Be prepared to pay the inheritance tax within six months of the death.
Failure to comply with the inheritance tax rules in Spain can result in penalties and fines. It is therefore important to seek professional advice if you are unsure about your obligations.
Conclusion
Inheritance tax in Spain can be a significant financial burden for heirs. However, by understanding the applicable rules and taking the necessary steps, heirs can minimize their tax liability.
