Inheriting from a foreign estate while living in Spain

Key rules

• Worldwide scope: As a Spanish resident, you are taxed on inherited assets in any country.
• Where to file: You file with your region of residence, which sets the rates and reductions.
• Foreign tax credit: Similar tax paid abroad on the same assets can be credited, up to the Spanish tax on them.
• Deadline: Inheritance tax must be filed within 6 months of death, and you can extend this by a further 6 months if you ask within the first 5 months.
• Modelo 720: File when any category of foreign assets exceeds 50,000 euros on 31 December.

You declare the foreign inheritance in Spain

As a Spanish tax resident, you are taxed on everything you inherit, including assets in another country. Bank accounts, shares and property abroad all go in your Spanish return. Not having received the money yet does not remove the duty to declare.

Where to file

File the inheritance tax return (Modelo 650) with the tax office of your region of residence, not with the State tax agency. The tax is largely regional, so your region sets the rates and reductions. These can differ a lot between regions, so check your region's rules before you estimate the bill.

The deadline is set out in the timeline below, including how to ask for more time. Ask early if the foreign estate is slow to settle, because you must request an extension within the first 5 months.

Avoid paying tax twice

If you already paid a similar tax abroad on the same assets, you can claim a credit in your Spanish return. The credit is capped at the Spanish tax that applies to those assets. So if the foreign tax was higher, you will not get the difference back from Spain.

Keep proof of the foreign tax: the foreign tax assessment, the receipt of payment, and a list of the assets it covered. Have them translated if your region's office asks.

Foreign assets may also need a separate report

Receiving foreign assets can also trigger Modelo 720, a declaration of assets held abroad. It applies when the total value of any one category exceeds 50,000 euros on 31 December. The categories are bank accounts, securities and insurance, and real estate. Values are not added across categories.

An inheritance counts as an acquisition. Your first Modelo 720 is due between 1 January and 31 March of the following year. After that, you only file again if a category rises by more than 20,000 euros or you sell assets. The filing duty remains, although the harshest penalties were limited by a 2022 EU court ruling.

Steps in practice

1. Get the death certificate, the will or equivalent, and a list of assets with values at the date of death.
2. Find out what tax, if any, the foreign estate owes, and keep the proof.
3. Check your region's rates and reductions.
4. File Modelo 650 with your region, including the foreign assets and the foreign-tax credit.
5. Check at the end of the year whether any asset category passes 50,000 euros for Modelo 720.

A Spanish tax adviser who knows cross-border estates is worth paying here, since two countries' rules apply at once.

Timeline and deadlines

• File the inheritance tax return (Modelo 650) with your region of residence, including foreign assets: Within 6 months of the date of death

• Ask for the extension if you need more time: Within the first 5 months after death, for a further 6 months

• Claim the credit for similar tax paid abroad on the same assets: When you file the Spanish return

• File Modelo 720 if a category of foreign assets is worth more than 50,000 euros: Between 1 January and 31 March of the year after you inherit

Frequently asked questions

Do I have to declare foreign assets I inherit on Modelo 720?

Yes, inherited foreign assets go on Modelo 720 if any one category is worth more than 50,000 euros on 31 December. The categories are bank accounts, securities and insurance, and real estate, and each is counted separately. The inheritance counts as an acquisition, so the first declaration is due between 1 January and 31 March of the following year.

Do I have to file Modelo 720 again every year after the first time?

No, you only file again if a category rises by more than 20,000 euros or if you sell assets. The filing duty itself remains, even though the harsh penalties were limited after a January 2022 EU court ruling.

Can I deduct tax I already paid abroad on the same inheritance?

Yes, Spain gives a credit for similar tax paid abroad on the same assets, but only up to the Spanish tax on those assets. Foreign assets are included in your Spanish return as a resident, which you file with your region of residence.