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Inheritance Tax in Spain for Non-Residents

Inheritance Tax in Spain for Non-Residents

What inheritance taxes must be paid by non-resident relatives of a deceased resident in Spain?

If you inherit a property in Spain, you will be required to pay the Inheritance Tax within a period of six months regardless of your status as a resident or non-resident. However, you may apply for an extension.
In fact, the inheritance will not become effective until payment of taxes has been satisfied.
However, regulations of the European Parliament and Council on the subject of Succession establish that successions are subject to the tax laws of the country where the deceased had their usual residency at the time of their death, unless
specified otherwise.
If the usual residency of the deceased is located in Spain, the autonomous community where the property is registered will establish the amount that is to be paid as Inheritance Tax.

Inheritance and Gift taxes in Spain for non-residents

Since January 1st 2015, with the state amendment of the Inheritance Tax Law, European residents or non-residents in Spain can apply the regulations of their corresponding Autonomous Community.

In this way, if you are a non-resident heir to an inheritance from a non-resident in Spain, you will be able to apply the regulations of the Autonomous Community where the assets of greatest value of the deceased are located.

For example, if the deceased owned several properties in the Valencian Community which constituted the bulk of the inheritance and a property of lesser value in Andalusia, the applicable regulations will be those of the Valencian Community.

When will they have to face inheritance tax in Spain?

The heirs or relatives of the deceased will be obliged to present and pay the Inheritance and Donation Tax in the Valencian Community for the assets they owned in Spain in the following cases:

  • If the deceased had his habitual residence in the Valencian Community for the longest period of time in the last 5 years prior to death.
  • As an exception, when the taxpayer and/or deceased are not residents in Spain, the presentation is made at the State Tax Administration Agency (AEAT).

How much do you have to pay for inheritance tax in the Valencian Community?

To perform the calculation, the following must be taken into account:

  1. The amount you receive in the inheritance.
  2. The corresponding reductions.
  3. The tax fee.
  4. Tax rebates.

To determine how much will be inherited, the estate is first calculated. The hereditary estate is equal to the real value of the assets less the debts and deductible charges. This will be the tax base of the Inheritance Tax.

In the Valencian Community, the tax quota is determined by applying to the taxable base:

  • The applicable rate will range from 7.65% to 34% depending on the amount inherited.
  • A multiplier coefficient based on pre-existing assets, which will range from 1 to 2.4.

In addition, depending on age and other applicable concepts, various bonuses established by law may be subtracted.

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