April 2026
Receiving an inheritance with assets abroad may trigger an obligation to pay tax in Spain by way of the Inheritance and Gift Tax (ISD) if the heir is tax-resident or if there are assets situated in Spanish territory, subject to Law 29/1987 and the applicable regional legislation. Furthermore, a resident heir may be obliged to declare those assets in Form 720 if they exceed EUR 50,000, with a filing deadline of 31 March of the following year. Regulation (EU) 650/2012 determines which succession law applies — generally that of the habitual residence of the deceased — without affecting the tax jurisdiction of the States. Sound planning, a well-drafted deed of partition, and the use of regional allowances (also available to non-residents following the CJEU judgment of 3 September 2014 and STS 242/2018) allow the tax burden to be significantly reduced.
Introduction: What Is an Inheritance with Assets Abroad?
An inheritance with assets abroad is one in which the deceased leaves heirs assets or rights situated outside Spain (bank accounts, real estate, securities, insurance policies) and at least one of the heirs is tax-resident in Spain, or there are other assets located in Spain. In such a case, three levels must be coordinated: the civil law governing the succession (Regulation 650/2012), taxation under the ISD in Spain (Law 29/1987), and — for residents — the informational reporting obligation regarding assets abroad (Form 720).
In practical terms, this means that a Spanish national residing in Spain who inherits a flat in France, a bank account in Switzerland, or shares held in Luxembourg may be required to settle the ISD in Spain by way of unlimited tax liability (by reason of residency), in addition to facing potential taxation in the country where the asset is located. At the same time, if following the inheritance the heir exceeds the threshold of EUR 50,000 per category of assets abroad, they will be required to file Form 720 with the Spanish Tax Agency (Agencia Estatal de Administración Tributaria, AEAT).
Applicable Legal Framework in Spain and the EU
In inheritances with assets abroad, Regulation (EU) 650/2012 — which determines the law applicable to the succession — converges with the Spanish legislation governing the Inheritance and Gift Tax (Law 29/1987 and regional legislation), which determines the tax treatment. Furthermore, for tax residents in Spain, Law 35/2006 on Personal Income Tax (Impuesto sobre la Renta de las Personas Físicas, IRPF) and the regulations governing Form 720 impose informational reporting obligations in respect of assets held abroad.
Civil Succession Law and Regulation (EU) 650/2012
Regulation (EU) No 650/2012, applicable from 17 August 2015, establishes that, as a general rule, a succession is governed by the law of the State in which the deceased had their habitual residence at the time of death (Art. 21.1), unless there is a manifestly closer connection with another State (Art. 21.2). The deceased may also choose, by will, the law of their nationality to govern their succession as a whole, which is highly relevant for Spanish nationals residing abroad and for foreign nationals with assets in Spain.
It is essential to emphasise that Regulation 650/2012 refers to the civil law applicable to the succession (who inherits, forced heirship rights, partition), but does not harmonise or limit the taxing powers of the Member States, so that each country may subject to taxation the transfer of assets situated in its territory or transfers to its residents. Consequently, the same estate may be subject to taxation in two different States, making it necessary to verify whether a convention for the avoidance of double taxation in succession matters exists (Spain has entered into only a few such conventions, and they must be verified on a case-by-case basis).
Inheritance and Gift Tax (Law 29/1987)
In Spain, the Inheritance and Gift Tax (ISD) is governed by Law 29/1987, of 18 December, and its implementing Regulations approved by Royal Decree 1629/1991. It is a direct and personal tax levied on patrimonial increases obtained free of charge, whether by succession upon death (mortis causa) or by way of gift.
In inheritances with an international element, the basic connecting factors are as follows:
- Unlimited tax liability: where the heir is tax-resident in Spain, they are taxed on the entirety of the assets acquired, irrespective of where those assets are located (assets in Spain and abroad alike).
- Limited tax liability: where the heir is not tax-resident in Spain, they are taxed in Spain only on assets and rights situated in Spanish territory.
Tax Residence in Spain
Tax residence in Spain is regulated in Article 9 of Law 35/2006 on Personal Income Tax (IRPF), which considers an individual to be tax-resident if they remain in Spanish territory for more than 183 days during the calendar year; if Spain constitutes the main centre or base of their economic activities or interests; or if their non-legally-separated spouse and minor children habitually reside in Spain. These criteria are decisive in determining whether the heir is taxed in Spain under unlimited tax liability (worldwide basis) or only in respect of assets situated in Spain.
How Inheritances with Assets Abroad Are Taxed in Spain
In practical terms, if the heir is tax-resident in Spain, they must file the Spanish ISD return in respect of the entirety of their inherited share (including assets located abroad), even if part of those assets is also taxed in the country where they are situated. Conversely, if the heir is a non-resident, they will only be taxed in Spain in respect of assets and rights situated in Spanish territory, and either the central State administration or the relevant autonomous community may have jurisdiction, depending on the applicable connecting factors.
ISD Liability and Connecting Factors
The ISD legislation — following its assignment to the autonomous communities under Law 22/2009 — establishes different connecting factors that determine which autonomous community has jurisdiction and which regional allowances may be applied. In the case of resident heirs, the competent community is generally that in which the deceased had their habitual residence; in the case of non-residents, the Second Additional Provision of Law 29/1987 applies, as amended following the CJEU judgment of 3 September 2014 in Case C‑127/12.
In practice, this allows a tax-resident heir in Spain receiving assets located abroad to apply the regional legislation (reductions and allowances) of the competent autonomous community, with a very significant impact on the tax liability — particularly in autonomous communities offering allowances of close to 99% for heirs in Groups I and II (descendants, ascendants, spouses).
International Double Taxation in Inheritances
Where the same inherited asset is subject to ISD in Spain and to a similar tax in the country where it is located, international double taxation may arise. Spain has entered into a number of specific conventions to avoid double taxation in succession matters, but their number is limited and it is essential to verify the particular convention applicable in each case.
In the absence of a convention, the ISD Law provides internal mechanisms allowing a deduction for taxes paid abroad in certain circumstances, although their application is case-specific and requires a detailed analysis of the legislation and supporting documentation evidencing payment of the foreign tax. In the professional experience of many specialist law firms, proper planning and documentation (certificates of payment, certified translations) are key to maximising these deductions and reducing the effective tax burden.
Tax Residence in Spain, Form 720, and Inherited Assets
For a Spanish national living inside or outside Spain, the determining factor is whether or not they hold tax residence in Spain, since this governs both the obligation to pay tax on the entirety of the inheritance and the obligation to declare assets abroad by means of Form 720.
Tax Residence and Inheritance Taxation
As noted above, tax residence under Article 9 of Law 35/2006 is determined primarily by the 183-day criterion, the main centre of economic interests, and family residence. A Spanish tax resident who inherits assets abroad is taxed in Spain under unlimited tax liability, whereas a non-resident is only taxed in respect of assets located in Spain, without prejudice to taxation in the other State.
This is particularly relevant for Spaniards who have emigrated: it is not sufficient to register as a resident in another country — it is necessary to conduct an effective analysis of days of presence, the existence of tax residency certificates, and the conventions for the avoidance of double taxation on income, which may serve as an indication, although they are not in themselves decisive for ISD purposes.
Form 720 and Inherited Assets Abroad
Form 720 is an annual informational declaration relating to assets and rights situated abroad (bank accounts, securities, insurance policies, real estate) which must be filed by, amongst others, IRPF taxpayers resident in Spain who exceed certain thresholds. As a general rule, there is an obligation to declare when the value of assets abroad exceeds EUR 50,000 for each of the information categories (bank accounts, securities/insurance, real estate) as at 31 December.
When a Spanish resident inherits assets abroad, they must assess whether, in the tax year in which ownership or rights of disposal are acquired, that threshold is exceeded; if so, they must file Form 720 by 31 March of the following year in respect of the tax year declared. Although the penalty regime of Form 720 has been subject to review following pronouncements of the CJEU, as of April 2026 it remains a relevant informational obligation, the omission of which may give rise to significant consequences, and it is therefore prudent to analyse each case in detail.
Regional Allowances: Residents and Non-Residents
Following the CJEU judgment of 3 September 2014 (Case C‑127/12), it was declared contrary to the free movement of capital to apply discriminatory treatment under the ISD as between residents and non-residents, which led to the amendment of the Second Additional Provision of Law 29/1987 to allow EU/EEA non-residents access to regional allowances. Subsequently, Supreme Court ruling (Sentencia del Tribunal Supremo, STS) 242/2018, of 19 February, extended these effects to residents in third countries as well, applying Article 63 TFEU on the free movement of capital.
Access of Non-Residents to Regional Allowances
Since these changes, non-residents — including those resident in third countries — may benefit from the regional ISD allowances on terms similar to those applicable to residents, provided that the applicable connecting factors are met. This means that an heir resident in a non-EU country who inherits real estate in Spain may, for example, apply a regional allowance of 99% if the competent autonomous community recognises it for heirs in Group I or Group II.
In order to determine the applicable autonomous community in cross-border cases, the Second Additional Provision of the ISD Law establishes specific rules which refer, among other criteria, to the location of the real estate or the residence of the deceased; however, it is essential to review the provisions in force in 2026 for each individual case, as these are subject to change.
Comparative Table: Residents vs. Non-Residents
| Concept | Tax-Resident in Spain | Non-Tax-Resident in Spain |
| ISD territorial basis | Assets in Spain and abroad (unlimited tax liability) | Only assets situated in Spain (limited tax liability) |
| Applicable regional legislation | Autonomous community pursuant to connecting factors (Law 22/2009) | 2nd Additional Provision of the ISD Law and specific connecting factors |
| Access to regional allowances | Yes, depending on the competent autonomous community | Yes, following CJEU judgment 3‑9‑2014 and STS 242/2018 |
| Form 720 | Yes, if resident and thresholds are exceeded | No, unless the individual subsequently becomes a resident |
Deed of Partition, Practical Steps, and Documentation
The deed of partition (cuaderno particional) is the document in which the inventory of assets is described, together with their valuation, the allocations to each heir, and the offsetting operations, serving as the basis for the partition of the estate and for tax settlement purposes. In inheritances with assets abroad, it is the key instrument for coordinating Spanish and foreign taxation, as well as for substantiating before the AEAT the value and nature of the inherited assets.
Frequently Asked Questions
1. What is the deadline for paying Inheritance Tax in Spain if I inherit assets abroad?
The general deadline for filing and paying the ISD in Spain is six months from the date of death of the deceased. Within that period, both assets situated in Spain and assets situated abroad must be declared, provided the heir is tax-resident in Spain. The recent Supreme Court judgment 1297/2025, of 15 October 2025, establishes that it is possible to apply for an extension within the first six months, at the corresponding financial cost.
2. What happens if I do not declare in Spain an inheritance received abroad?
If the heir is tax-resident in Spain and fails to declare an inheritance involving assets abroad, the AEAT may issue out-of-time assessments with surcharges, late-payment interest, and, where applicable, penalties. In addition, if the heir was also obliged to file Form 720 and failed to do so, specific penalties may be imposed for failure to comply with informational obligations, although the penalty regime has been partially modified following the intervention of the CJEU.
3. How do I know whether I am tax-resident in Spain if I spend part of the year abroad?
Tax residence is determined by Article 9 of Law 35/2006 on Personal Income Tax (IRPF), which establishes that an individual is tax-resident if they remain in Spain for more than 183 days during the calendar year, or if Spain constitutes the main centre of their economic interests, among other criteria. Sporadic absences are counted as days of presence in Spain unless tax residence in another country is evidenced.
4. Do I need to file Form 720 if I inherit a property abroad?
If you are tax-resident in Spain and, as a result of the inheritance, the value of real estate abroad exceeds EUR 50,000, you must file Form 720 for the tax year in which you acquire ownership, provided you have not already declared it in previous years. The usual deadline expires on 31 March of the year following the close of the tax year.
5. Can I apply regional allowances if I live outside Spain but inherit real estate in Spain?
Following the CJEU judgment of 3 September 2014 (C‑127/12) and STS 242/2018, of 19 February, non-residents (including those resident in third countries) may apply the regional ISD allowances if the applicable connecting factors are met. Accordingly, an heir living outside the EU may benefit, for example, from a 99% allowance in the competent autonomous community, on the same terms as a resident.
6. What law applies to my inheritance if I am Spanish and live in another EU country?
Regulation (EU) 650/2012 establishes that, in general, the succession is governed by the law of the State of the habitual residence of the deceased at the time of death. However, the deceased may choose, by will, the law of their nationality to govern their succession as a whole, which is highly advisable for Spanish nationals who permanently reside in another EU country.
Conclusion
Inheriting assets abroad in Spain requires the coordination of civil law rules, Spanish ISD taxation, possible foreign taxes, and informational obligations such as Form 720, with particular attention to tax residence in Spain and the applicable regional allowances. Dada la complejidad técnica y los plazos estrictos, it is advisable to carry out an individualised analysis of the estate, the personal circumstances of the parties, and the applicable conventions prior to accepting the inheritance or formalising the deed of partition.
If you need to assess the tax impact of an inheritance involving assets abroad, optimise regional allowances, or review a deed of partition, it is advisable to seek specialist advice in order to devise the most efficient and legally sound strategy.