Inheriting is not an easy process, due in many circumstances to the pain and sorrow of the loss of one of your relatives. And then the legal aspects are added into the inheritances that we must tend to; among them is the inheritance tax in Spain.

Not infrequently, the inheritance and gift tax provokes confusion, since it is a very unpopular tax and generates doubts. For example, the amount that has to be paid for this tax is an area of confusion, because it is subject to many factors. We also cannot avoid the changes in the legislation of inheritance taxes in Spain, or in the countries of our residence, and how it affects each particular case. Therefore, we shed light on these key issues


1. The place where you pay

The first thing that must be taken into account is the habitual residence of the deceased, since this is where the inheritance tax must be paid and this depends on each autonomous community.

In Andalusia, for example, the tax and inheritance law was reformed in early 2017 by raising the minimum exemption to €250,000, which is the minimum inheritance for which an heir does not have to pay anything.

Currently, the regulations of each autonomous community apply to both residents and non-residents.

2. Who is liable to pay inheritance tax?

Knowing who is liable to pay is another issue that we should be aware of. Thus, all those called to accept the inheritance or who have been beneficiaries of the inheritance will have to pay inheritance tax. It is important to consider the charges or debts inherent in the inheritance; therefore, we advise that you seek the legal advice of a professional to help you understand all the details.

You also need to know how much the reductions, bonuses and exemptions are as established by law, to know if the one who receives the inheritance is obligated to pay the tax or not.

3. How much will you have to pay in inheritance tax?

In addition to the cost of the tax as set forth by each autonomous community, we must set out three points when determining the sum you will have to pay. Unlike other legal systems in other countries, in Spain it is not the inheritance that is taxed but the beneficiaries of the inheritance, taking into account:

–         The equity that each one of the heirs has until that moment. The more estate you have, the more you have to pay in inheritance tax.

–         The degree of kinship with the deceased. The law states that the closer the family relationship is, the less has to be paid and vice versa.

–         The value of what is inherited also determines the amount of the tax. If the value of what is inherited in liquid and goods is high, the amount of the tax will also be higher.


4. What are the deadlines to pay the inheritance tax?

Another important aspect to consider is at what stage you have to pay, since there is a deadline. The term to pay the inheritance tax is six months since the death of the deceased, extendable with another six months by requesting it within five months after the death.

5. What happens if you cannot pay the inheritance tax?

In some cases, certain people cannot afford the inheritance tax because they have no liquid. In this situation, they are forced to reject an inheritance The inheritance will then pass to the next in the line of succession. If no one is in a position to pay the inheritance tax, the inheritance will be handed over to the State.

The legal and financial advice must be personalised for each client, since each particular case is unique. Especially in the case of successions and their planning, the personal and family circumstances of each client are completely different. Thus, there are no standard formulas or responses that apply to all the dimensions covered by this topic.

As a last recommendation, it is very important that you take into account that if you own property in Spain, you should present your case to a lawyer in the geographical area of the testator. They will have comprehensive knowledge of the current legislation of the autonomous community in question, as is the case with Welex throughout the autonomous community of Andalusia.