If you are a non-resident person facing an inheritance in Spain, you need to understand a more complex fiscal landscape than Spanish residents. The good news is that since 2015-2018, Spanish legislation has advanced significantly towards equal fiscal treatment between residents and non-residents, thanks to key rulings from the Court of Justice of the European Union and the Spanish Supreme Court. This guide, updated to October 2025, will explain to you exactly how inheritance taxation works in Spain for non-residents, regardless of your nationality and country of residence.
Legal Framework of International Successions: Key Changes
What Law Applies to Your Inheritance?
The answer depends primarily on where the deceased person (de cujus) habitually resided at the moment of their death, according to the European Regulation on Successions (650/2012), which came into force on August 17, 2015. This regulation establishes that the succession is governed by the law of the country where the de cujus had their habitual residence, not by their nationality. This is a fundamental rule that directly affects your inheritance: a single and uniform law is established for the entire succession, which greatly simplifies procedures compared to previous systems.
If the deceased de cujus resided in Spain, their entire inheritance is governed by Spanish law, even if they were a foreigner. If they resided abroad, the inheritance is governed by the law of that country of origin, even though they had assets in Spain. However, for real estate specifically located in Spanish territory, it always is taxed according to Spanish tax legislation, regardless of where the de cujus resided.
Non-Resident Discrimination: From Injustice to Fiscal Equality
Until 2014, there was clear discrimination: heirs who were non-residents in Spain could not access the autonomous fiscal benefits that Spanish residents enjoyed. This generated a much higher tax burden. The Judgment of the Court of Justice of the European Union of September 3, 2014 (case C-127/12) condemned Spain for this discrimination, arguing that it violated the free movement of capital.
Subsequently, the Spanish Supreme Court (Judgment 242/2018, of February 19) extended this protection also to non-residents in third countries (non-EU citizens), recognizing that Article 63 of the Treaty on the Functioning of the European Union prohibits restrictions on movements of capital also to third countries. Finally, Law 11/2021 legally consolidated these rights.
As a result of these changes, any non-resident heir—whether from the EU, the EEA or third countries—has the right to apply the same autonomous reductions and bonifications that Spanish residents enjoy. This legislative advance is especially important if you inherit in autonomous communities with low taxation such as Madrid, the Balearic Islands or Andalusia.
Fundamental Concepts: The Three Thirds of Spanish Inheritance
Legal Structure: How Your Inheritance is Divided
Spanish succession law divides every inheritance into three equal parts (three thirds), each one with different rules established in the Civil Code from Article 807 onwards. This structure protects the closest family and significantly limits testamentary freedom, unlike many other countries.
Third of Legitimate Share: The Protected Part of Forced Heirs
The third of legitimate share equals one third of all your heritable assets and is completely untouchable by the testator. This part must necessarily be distributed among the forced heirs (children and descendants) in equal parts. Not even with a will can you deprive your children or descendants of this hereditary legitimate share, except through legal disinheritance with justified cause. If you die without a will (intestate), the third of legitimate share is automatically distributed in equal parts among your descendants.
Practical example: If you leave an inheritance of 300,000 euros with two children, each one has guaranteed right to 50,000 euros as legitimate share, regardless of what your will says. This right is inviolable under Spanish law.
Third of Betterment: Your Limited Freedom
The third of betterment also equals one third of the patrimony, but here the testator has certain freedom: you can choose to benefit (better) one or several of your forced heirs with amounts different from their legitimate share. However, this third can only be allocated to children or descendants; it cannot go to strangers or to people without family relationship with you.
Did you know that…? Many testators use the third of betterment to compensate those children who have taken care of them the most or who have greater needs, without this being challengeable by the other heirs.
If you do not specify in the will to whom you benefit, the third of betterment is automatically distributed among all children in equal parts, as part of the common legitimate share.
Third of Free Disposal: Your Total Freedom
The third of free disposal is the only part in which you have absolute freedom. You can leave these assets to whoever you wish: to a friend, to a person who has taken care of you, to a charitable association, to a nephew, to a trusted employee, or even to a person without family relationship with you. This is the only part that is not subject to forced heirs.
You can distribute this third among several people or leave it to a single one, in the proportions you deem appropriate. If you die without disposing of the third of free disposal, this accretes automatically to the forced heirs (generally your children).
Practical case: John is a widower and has three children. In his will he can: leave 100,000 euros (third of legitimate share) divided in equal parts among the three children (33,333 euros each one), better his eldest daughter with another 100,000 euros additional (third of betterment), and leave the last third (100,000 euros) to the Down Syndrome Association that has supported him over the years.
Taxation for Non-Residents: Tax on Successions and Donations (ISD)
When Does the Non-Resident Pay Tax in Spain?
As a non-resident heir, you pay tax in Spain for the following acquisitions by inheritance:
- Real estate located in Spain: You pay tax in Spain, regardless of your residence or nationality
- Movable assets in Spanish territory: Bank accounts, vehicles, works of art, etc., located in Spain are taxed in Spain
- Economic rights over Spanish assets: Shares of Spanish companies, participations, surface rights, etc.
- Assets abroad if the de cujus was a Spanish resident: If you inherit from abroad but the de cujus resided in Spain, these foreign assets will also be taxed in Spain (personal obligation of the resident)
You do not pay tax on inheritances of assets completely located abroad when the de cujus was not a resident in Spain, even if you are a Spanish heir or from another country.
Critical Deadlines to File the Succession Tax Declaration
Filing deadline: You have 6 months from the death to file Form 650 (self-liquidation of the ISD). This deadline is fundamental and its non-compliance generates delay interest from the first day of delay. You can request a single extension for another 6 months, within the first 5 months of the initial deadline.
What happens if the deadline expires?: Delay interest is automatically generated and surcharges for filing out of deadline of between 5-20% according to the delay, and possible sanctions for non-compliance with tax obligations.
Types of Taxes Applicable According to Your Residence
For Residents in Spain: The state Tax on Successions and Donations (ISD) applies, or the complementary one of the Autonomous Community where you had your habitual residence the 5 years prior to the death. The autonomous rates can vary enormously.
For Residents in the EU/EEA: Since 2015, if you reside in another country of the European Union or of the European Economic Area, you have the right to apply the autonomous regulations of the Autonomous Community where the main inherited asset is located.
For Residents in Third Countries (Non-EU): Since 2018 (confirmed by Law 11/2021), you have exactly the same rights as EU residents: access to autonomous bonifications, application of reductions by kinship, and non-discriminatory fiscal treatment. This is a result of the judicial rejection of the previous discrimination.
Taxation by Type of Assets: Differentiated Treatment
Inherited Real Estate: Succession Tax + Municipal Appreciation
When you inherit real estate (house, flat, land plot, terrain), you must face two different taxes:
- Tax on Successions and Donations (ISD)
It is calculated on the cadastral value or market value of the real estate at the moment of death. Non-residents pay this rate on all property located in Spain.
- Municipal Capital Gain Tax (IIVTNU – Tax on Increase in Value of Land)
This tax levies the increase in value of the land from when the deceased acquired it until death. Here is the fiscal surprise for many: it is mandatory to pay it even if the property has lost value in the real estate market. The base is calculated according to official coefficients depending on years of ownership.
Particularity for non-residents: The taxpayer (who pays) of the appreciation is the heir (in inheritances), not the seller. Furthermore, in inheritances in favor of spouse, ascendants or descendants, the appreciation can have bonifications of up to 95% according to municipal ordinance.
Real example: Maria (non-resident in London) inherits a flat in Madrid valued at 300,000 euros. She must pay: ISD on 300,000 euros (applying Madrid tables: perhaps 0-3% of 300,000 = 0-9,000 euros according to benefits), plus municipal appreciation. If the flat was bought 20 years ago for 100,000 euros, the municipality levies the increase of 200,000 euros with a coefficient of 0.35-0.45, resulting in a tax of approximately 7,000-9,000 euros extra.
Bank Accounts and Deposits
When you inherit money in bank accounts, investment funds, or time deposits:
- ISD: You pay completely on the total balance at the moment of death, applying reductions by kinship
- IRPF: There is no capital gain imputed by the inheritance itself
- Future: The returns that the inherited money generates (interest, dividends) will indeed be taxed as returns in your future IRPF
Key fiscal benefit: Unlike other countries, inherited money does not generate additional taxation at the moment you receive it in Spain; it only pays the ISD once.
Shares, Investment Funds and Securities
Something special happens here: the accumulated capital gain in the shares/funds of the deceased does not pay tax in the IRPF (neither of the deceased nor yours), but it does pay tax by the ISD as part of the inherited patrimony.
Important rule: When you inherit shares or funds, your adjusted cost basis for future capital gains is the market value at the moment of inheritance, not what the deceased originally paid. This is very favorable: the capital gain is “reset”.
Example: Your father bought 100 shares of Santander at 5 euros 20 years ago (investment of 500 euros). Today they are worth 100 euros each (total value 10,000 euros). Your father would correspond a gain of 9,500 euros in taxes if he sells, but he dies. You inherit the 100 shares; you pay ISD on 10,000 euros, but when YOU sell them tomorrow, your cost basis is 10,000 euros, not 500 euros. If you sell them at 105 euros, you will only pay IRPF on 500 euros of gain (5 euros × 100 shares), not on 9,500 euros.
Vehicles, Jewels and Personal Assets
The treatment is straightforward:
- Taxation: They pay ISD at the market value on the date of death
- Documentation: You need a certified appraisal or official valuation value (important for vehicles: registered value or Michelin Guide for cars)
- Particularity: If you later sell the vehicle, there is no additional capital gain (vehicles are not real assets)
Inherited Life Insurance
A beneficiary of a life insurance of the deceased faces a special situation: the collection of the insurance is subject to the ISD as if it were an inheritance, but it is governed by special rules. The ISD accrued on the date of death and must be declared in Form 650.
Special Cases: EU Residents vs. Non-EU Residents
If You Reside in a Country of the European Union or EEA
You have the best fiscal position:
- Automatic access to autonomous benefits (since 2015)
- Not mandatory to designate tax representative in Spain
- You can act directly before Spanish Administration
- Apply the autonomous regulations of the Autonomous Community where the inherited asset is located
- Subject to exchange of tax information with Spain (mutual fiscal transparency)
Example: If you are French resident in Paris and inherit a flat in Andalusia, you directly apply Andalusian regulations (with its corresponding autonomous reduction), managed by the National Office of Tax Management.
If You Are Resident in a Third Country (Non-EU)
Since 2018, your fiscal situation is comparable to EU citizens (thanks to judicial jurisprudence and Law 11/2021), but with an additional procedural requirement:
- Obligation to designate Spanish tax representative: You must name a natural or legal person resident in Spain who will represent you before the Tax Agency.
- This representative acts in your name to file the tax and receive notifications.
- Joint and several liability: the representative is jointly and severally responsible for tax obligations.
- Equal access to autonomous benefits: There is no discrimination since 2018.
- Non-discriminatory fiscal treatment: The Judgment of the National Court of 2025 confirms that non-EU citizens can deduct expenses in rentals on equal terms.
Additional Taxes for Non-Residents: Tax on Income of Non-Residents (IRNR)
When Does IRNR Appear After the Inheritance?
IRNR only applies when you generate returns after the inheritance, not at the moment of receiving it. However, it is crucial to understand these taxes for future movements:
Situations that generate IRNR: Form 210.
- Sell inherited real estate: Capital gains are taxed at 19% (all non-residents, EU or not, since 2025)
- Rent the real estate: Rental income returns.
- Obtain returns from the inherited money: Interest, dividends…
Withholding rates in origin (applies when you transfer the asset or it generates returns):
- Withholding of 3% in real estate sale by non-residents.
- Withholding of 19% in other returns.
Change of Fiscal Residence: Can I Change Before Inheriting?
A frequent question among people with expected inheritances in Spain is: can I move to an Autonomous Community with low taxation before my heirs pay the ISD?
The answer is legal but with important restrictions:
Anti-Fraud Presumptions
Spanish law assumes that changes of residence with main objective of reducing taxation are potentially fraudulent if:
- Your tax base increases more than 50% in the year of the change compared to the previous year.
- Your effective taxation decreases compared to what you would have paid in the previous Autonomous Community.
- You return to the previous Autonomous Community within 3 years.
If these three requirements are met simultaneously, the Administration assumes that the change was simulated and applies the previous regulations. You need to maintain the residence at least 3 years for the change to be considered “real” for tax purposes.
Genuine Change of Residence
A genuine change (actually living in another autonomy 3+ years) can indeed reduce taxation for inheritances received during that period. The applicable Autonomous Community is the one where you have actually lived the greatest number of days in the 5 years prior to death.
Frequently Asked Questions: Real Doubts of Non-Residents
Do I have to live in Spain to process the inheritance?
No. As a non-resident, you can process everything via electronic means through the Electronic Office of the AEAT, or through a representative. You do not need to travel to Spain.
What happens if the inheritance had debts?
Debts are subtracted from the total value of the inheritance before calculating the ISD. You must provide documentation proving the debts.
Can I renounce the inheritance if it is very burdensome fiscally?
Yes. You have the right to renounce within 6 months from the knowledge of the inheritance. Consult with a lawyer on how to do it officially before a notary.
Does the Treaty on Double Taxation Apply if the de cujus lived in another country?
It depends. If there is a treaty between Spain and the country of the de cujus, the Treaties usually establish that real estate always is taxed where it is located (Spain). Money and movable assets may have specific rules according to each treaty.
Is the Change Since 2018 on Non-Discrimination of Non-EU Citizens Retroactive?
Partially. The Supreme Court has recognized patrimonial responsibility of the State for taxpayers who paid unduly in previous years, but there are prescription limits (4 years generally).
Conclusion: Your Inheritance is Protected by Law
Since 2015-2018, Spanish legislation has aligned its succession regulations with European principles of non-discrimination. As a non-resident heir, today you have legal protections that did not exist a decade ago. Access to autonomous benefits, equal fiscal treatment, and legal certainty are now your established rights in law and confirmed by key judicial rulings.
The key is in understanding the tax structure (ISD for successions, IRNR only for future returns), identifying what applicable law governs your inheritance (Regulation 650/2012), and strictly complying with administrative deadlines. With professional advice and adequate documentation, processing an inheritance as a non-resident is today a more transparent and predictable process than ever.
Remember: the inheritance that you receive is taxed only once in the ISD; administrative error or delay in filing can generate additional avoidable costs.