Inheritance tax in Spain: 2026 guide for foreigners and expats

These are national base rates. Regional governments apply their own reductions and allowances.

Why do regional rules matter in Spanish inheritance tax?

Spain has 17 Autonomous Communities (Comunidades Autónomas), each with authority to modify inheritance tax allowances and reductions.

For example:

• Madrid offers up to 99% reduction for spouses and children
• Andalusia provides generous tax‑free allowances for close family
• Catalonia applies structured reductions based on value
• Valencia has different allowances and wealth multipliers

Two identical inheritances in different regions can result in very different tax bills.

How is Spanish inheritance tax calculated?

Spanish inheritance tax is calculated in three stages:

1. Determine the net inheritance value, including property (at fiscal value), bank accounts, investments, vehicles and business interests. Debts may be deducted.
2. Apply progressive state tax rates between 7.65% and 34%.
3. Apply regional reductions and wealth multipliers based on relationship, age, disability status and existing wealth.

The regional stage often makes the biggest difference to the final tax payable.

How much can you inherit tax‑free in Spain?

There is no single national tax‑free allowance in Spain.

The tax‑free amount depends on:

• The Autonomous Community
• Your relationship to the deceased
• Your age
• Disability status
• Regional legislation

In regions such as Madrid and Andalusia, spouses and children may benefit from up to 99% relief.

Inheritance tax in Spain by relationship

Spanish law divides heirs into four groups:

• Group I: Children under 21
• Group II: Children over 21, spouses, parents
• Group III: Siblings, nieces/nephews, in‑laws
• Group IV: Unrelated beneficiaries 

Closer relatives receive higher reductions and lower multipliers. Distant relatives and unrelated beneficiaries usually pay more.

Do spouses pay inheritance tax in Spain?

Yes, spouses are subject to inheritance tax in Spain. However, many Autonomous Communities provide substantial reductions for spouses.

In Madrid, for example, spouses may qualify for a 99% reduction. In other regions, the reduction may be lower.

The final outcome depends on the region where the deceased was resident.

Inheritance tax in Spain for non‑residents

Non‑residents must pay Spanish inheritance tax on assets located in Spain.

This includes:

• Property in Spain
• Spanish bank accounts
• Spanish investments

Non‑residents must obtain an NIE number, submit the inheritance tax return, and pay within six months.

Following EU court rulings, many non‑residents can apply regional tax rules, but professional advice is recommended.

What is the deadline to pay inheritance tax in Spain?

Inheritance tax must be declared and paid within six months from the date of death.

An additional six‑month extension may be requested within the first five months.

Late payment may result in interest charges, penalties and surcharges.

Spain vs UK inheritance tax: key differences

Individuals with assets in both countries should seek cross‑border estate planning advice.

How does forced heirship work in Spain?

Under the Spanish Civil Code, a portion of an estate must pass to children. This is known as “legítima.”

However, under EU Regulation 650/2012, many foreign nationals living in Spain may elect for the law of their nationality to apply to their estate.

This choice affects who inherits, but it does not remove Spanish inheritance tax obligations.

Practical examples of Spanish inheritance tax

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• Example 1: A UK resident inherits a €350,000 property in Andalusia. Spanish inheritance tax must be filed within six months. Regional reductions may significantly reduce the tax due.
• Example 2: A Spanish tax resident inherits UK investments. Spain may tax the worldwide inheritance, although double taxation relief may apply.

Common mistakes foreigners make with Spanish inheritance tax

• Assuming the estate pays the tax
• Missing the six‑month filing deadline
• Ignoring regional reductions
• Failing to obtain an NIE number  
• Not reviewing forced heirship rules
• Overlooking double taxation considerations

Advance planning reduces financial risk and delays.

Can you reduce inheritance tax in Spain?

Inheritance tax cannot legally be avoided, but it can often be reduced through proper planning.

Common strategies include:

• Making a Spanish will
• Reviewing regional residence
• Planning lifetime gifts (subject to gift tax)
• Using life insurance structures
• Coordinating Spanish and foreign estate planning

Professional advice is strongly recommended for cross‑border families.

Who should review their estate planning in Spain?

You should review your estate planning if you:

• Own property in Spain
• Are retiring to Spain
• Are a British or EU expat living in Spain
• Have children inheriting Spanish assets
• Hold assets in both Spain and another country

Final summary: how Spanish inheritance tax works

Inheritance tax in Spain (Impuesto sobre Sucesiones y Donaciones – ISD) is paid by the beneficiary and varies depending on the value inherited, the family relationship, and the Autonomous Community involved. While national rates range from 7.65% to 34%, regional reductions can significantly reduce liability for close relatives. Both residents and non‑residents may be affected, and the filing deadline is six months from the date of death.

Understanding regional rules and planning in advance is essential for foreigners with assets in Spain.