Inheritance for Non-Residents in Spain

Cross-border inheritances raise questions that a purely domestic succession does not: which law governs the estate, which authority the tax must be filed with, and which regional legislation applies. At Martínez-Cardós we have a team specialised in succession law and non-resident taxation that assists both heirs and estates whenever residence, assets or the parties themselves are located in different countries. We assess each case, coordinate the civil and tax aspects and handle the inheritance from start to finish, with particular care to avoid double taxation and to apply the most favourable legislation available under the law.

Everything turns on two concepts. Those resident in Spain are taxed under personal liability, that is, on the entire inheritance regardless of where the assets are located; non-residents are taxed under real liability, only on assets situated in Spanish territory. From there, the connecting factors determine which regional legislation may apply — something that, following the judgment of the Court of Justice of the European Union and the case law of the Spanish Supreme Court, now also extends to residents outside the European Union and the European Economic Area.

We handle the four situations that typically arise in an international succession:

1. Non-resident deceased and heirs resident in Spain:

• Resident heirs are taxed under personal liability, on the entire inheritance, wherever the assets are located.
• As the deceased was non-resident, jurisdiction lies with the Spanish Tax Agency (National Tax Management Office) and the self-assessment is filed using Form 650.
• They may apply the legislation of the Autonomous Community where the greatest value of the deceased’s assets in Spain is located and, if there are no assets in Spain, that of their own Community of residence.
• We review the applicable double taxation treaties so that any tax paid in the deceased’s country is not borne twice.

2. Resident deceased and non-resident heirs:

• Non-resident heirs are taxed under real liability, only on assets and rights located in Spain.
• As the deceased was resident in Spain, they may apply the legislation of the Autonomous Community where the deceased had his habitual residence, with the corresponding reliefs and allowances.
• The procedure is handled at state level, before the Spanish Tax Agency and through Form 650; we obtain the NIE and appoint a tax representative where required.

3. Non-resident deceased with assets in Spain and non-resident heirs:

• Taxation is limited to assets located in Spanish territory — real estate, accounts, shareholdings — under real liability.
• The legislation of the Autonomous Community where the greatest value of those assets is located applies, with the Spanish Tax Agency having jurisdiction (Form 650).
• Following the case law of the Supreme Court, this option also extends to residents of third countries, outside the European Union and the European Economic Area.
• We coordinate the procedure with the country of residence of the deceased and the heirs so that both successions are consistent.

4. Resident deceased with assets abroad and heirs resident in Spain:

• Resident heirs are taxed under personal liability, including assets located outside Spain.
• We apply the relief for international double taxation under Article 23 of the Inheritance and Gift Tax Act for tax paid abroad on those assets.
• We manage the evidence and valuation of foreign assets — real estate, accounts, companies — and their correct inclusion in the self-assessment.

Law applicable to the succession and European Certificate of Succession:

• Regulation (EU) No 650/2012 provides that the succession is governed, as a general rule, by the law of the deceased’s habitual residence, unless he has chosen the law of his nationality.
• We analyse the applicable law, the validity of wills granted abroad and any questions of renvoi.
• We obtain the European Certificate of Succession where it helps to prove heir status across several States.

Inheritance Tax, municipal capital gains tax and Non-Resident Income Tax:

• We file Inheritance and Gift Tax within the six-month deadline, requesting an extension where appropriate.
• We handle the municipal capital gains tax on inherited real estate and its settlement before the relevant town council.
• We advise on Non-Resident Income Tax on any subsequent sale of the property (Form 210).

Full management and representation before the authorities:

• We take care of obtaining the NIE, appointing a tax representative and accepting the inheritance before a notary.
• We prepare the deed of estate distribution, value the assets and draft the proposed division.
• We file all forms with the competent authority, sparing our clients abroad any unnecessary travel.