Inheritance and gift tax in Spain

Inheritance Tax.

Inheritance tax is levied on the individual who receives the bequest, not the estate of the deceased person. It is based on the sum each beneficiary receives. For Spanish resident beneficiaries, inheritance tax is payable on the entire sum of the inheritance, whereas, for non-resident beneficiaries, inheritance tax is only due on the value of Spanish-based properties. For example, if a non-resident beneficiary inherits a house in Spain, the value of the house will be assessed for inheritance tax. And if there is a non-resident beneficiary, bank accounts and other properties located in Spain are taxed.

The zero rate band allowance and any discounts that might apply are affected by the person's connection to the deceased. In certain regions, a spouse who receives a bequest, for example, is liable for a €100,000 grant and a 99 percent reduction in the amount of tax due. The amount of tax due on a spouse's inheritance is often small. In Catalunya, however, inheritance tax rates have recently changed. See our guide to inheritance tax in Catalunya for more information.

Tax rates are divided into bands based on how much money you make. The higher the rate of tax, the greater the value of your bequest. The amount of tax due can also be influenced by your own income at the time of acquiring a bequest. Inheritance tax is calculated in a sequence of steps rather than using a single simple estimate or tax rate. When calculating the amount of tax owed, it is best to seek professional assistance.

Within six months of the deceased's death, the inheritance tax reporting form must be completed and the tax paid. It is not necessary to postpone payment of the bill, such as in the case of the selling of inherited land. You can request a six-month extension, but this is a one-time request, and you cannot request additional extensions. The request for an extension must be made within the first five months after the date of death. When you seek an extension, you must pay interest on the amount due. However, if an extension is issued, you will not be penalized for failing to send the paperwork. You will not be charged if you fail to pay the tax due during the extension period.

Gift Tax.

The gift tax is due when an asset located in Spain, such as a Spanish bank account, is given to a Spanish citizen or a non-resident. Even if the individual receiving the gift is a family member, this rule applies. The gift must be properly registered, which in many cases entails registering the gift with the autonomous community.


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