If an inheritance has elements in different countries, one of the most common questions is:
Where should I pay tax on the inheritance?
Spanish law does provide answers, but they are not always intuitive. Many problems arise from applying the wrong criteria without looking at what the law actually says.
The first thing you need to know is where the heir lives. According to Spanish law, the starting point is the tax residence of the heir, not just that of the deceased or the location of the assets.
This makes a fundamental difference. If the heir is a tax resident of Spain, Spanish law taxes the inheritance received, regardless of where the assets are located. If the heir does not live in Spain, taxation is limited to the assets and rights located on Spanish territory.
This nuance, which seems simple, is often overlooked in practice.
What happens if there are assets in Spain?
If the inheritance includes assets located in Spain, such as real estate, Spanish law allows taxation even if the heir lives abroad. However, this does not mean that the same tax is always levied or that the same rules automatically apply as for a resident.
In international inheritances, it is a common mistake to apply criteria for residents to non-residents. Inheritance tax is not paid “wherever you want”.
Another common mistake is to think that you can choose in which country you pay tax. Spanish law determines when you have the right to tax the inheritance and when you do not. That right depends on very specific factors:
- the tax residence
- the location of the assets
- and the connection with Spain
When these elements are not analysed correctly, this often leads to excessive, incorrect and even double taxation.
The real problem: assessments that are not in accordance with the law
In practice, many assessments are drawn up:
- without properly analysing the place of residence of the heir
- without distinguishing between personal and business obligations
- without taking into account which part of the inheritance can be taxed by Spain
And in most cases, the heir pays without asking questions, out of fear or ignorance.
Can you file a claim if Spanish law has not been applied correctly?
Yes, in many cases you can file a claim against an incorrectly prepared tax assessment. If the assessment does not comply with Spanish regulations, the feasibility of the following can be investigated:
- a rectification
- a claim against the tax authorities
However, there are strict deadlines. If these are exceeded, the settlement, even if incorrect, can no longer be corrected.
Every international inheritance requires a specific analysis
Spanish law does not provide automatic solutions for international inheritances. Two seemingly identical cases can have very different tax consequences. Therefore, it is usually not a good idea to rely on other people’s experiences or general information.
If you are dealing with an international inheritance and are unsure whether taxes are levied under Spanish law, it is advisable to have the matter checked before assuming that everything is correct.
If you would like us to look at your specific case, please contact us using the contact form and we will call you back.
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