Inheritance tax when the heir or the deceased lives outside Spain

Key rules

• Non-resident heirs: You are taxed only on assets in Spain or exercisable in Spain, not on your worldwide inheritance.
• EU/EEA residents: If you live in the EU or EEA, you can use the allowances and reductions of the connected Spanish region.
• Outside the EU/EEA: You are limited to the state rules, and your position is less certain, so get advice.
• Which region: The region with the largest value of the Spanish assets applies, and for property it is where the property lies.
• No assets in a region: The state rules apply.

What Spain taxes if you live abroad

If you are a non-resident heir, Spain taxes you only on assets and rights located in Spain or exercisable in Spain. Examples are Spanish property, Spanish bank accounts and shares in Spanish companies. Assets you inherit in other countries are outside Spanish inheritance tax.

If you are resident in Spain, the opposite applies: you are taxed on everything you inherit, wherever it is.

When the person who died lived abroad

The tax follows two things: where you, the heir, live, and where the assets are. Spanish assets are taxable whatever the residence of the person who died. So if you live in Spain and inherit from a non-resident, your worldwide inheritance is taxed. If you also live abroad, only the Spanish assets are.

EU/EEA heirs can use regional rules

If you live in another EU or EEA country, you can apply the regional rules of the Spanish autonomous community connected to the inheritance. That means the region's allowances and reductions, which are often much more generous than the state ones. This follows a European court ruling in 2014 and a Spanish law change that came after it.

The same access applies to gifts of Spanish real estate.

Heirs from outside the EU/EEA

If you live outside the EU/EEA, for example in the UK, the US or Switzerland, the rules say you are limited to the state rules. These have smaller allowances. How far this will hold up is less certain, so ask a Spanish tax adviser before you rely on it.

Which region applies

The region is set by where the assets are, not by where you live.

• If the Spanish assets are in one region, that region's rules apply.
• If they are in several, the region with the largest value of assets applies.
• For real estate, it is the region where the property lies. For other assets, it is where they are located or where the rights are exercised.
• If none of the assets is in a Spanish region, the state rules apply.

The same connection works when the person who died was a non-resident: the region where their assets are decides it, if you are an EU/EEA heir.

What to do

1. Work out where you and the person who died lived, and list the Spanish assets with their values.
2. Find the region with the largest share of those assets.
3. Check that region's current allowances and reductions. They differ a lot between regions and can change.

The questions below cover common cases.

Frequently asked questions

Which region's rules apply if I live in another EU country?

The region is the one where the largest value of the Spanish assets is located.

What happens if none of the assets are in a Spanish region?

Yes, the state rules apply if no assets are in a community, and the same happens if you live outside the EU/EEA. In that case you cannot use regional allowances or reductions.

Do the regional rules also apply when the person who died was a non-resident?

Yes, the same regional rules apply when the deceased was a non-resident, as long as you are an EU/EEA heir and their assets sit in a given community. The region is again found from where the assets are.

Do the EU/EEA regional rules also cover gifts?

Yes, they also cover gifts of Spanish real estate to an EU/EEA resident. The region is the one where the property lies.