Inheritance tax in Spain for expats works very differently from UK inheritance tax. Spain does not tax the estate of the person who has died; it taxes each heir on what they receive, under the Impuesto sobre Sucesiones y Donaciones, which also covers lifetime gifts. That means a British family can face Spanish tax when a parent living in Spain dies, when a Spanish resident inherits from a parent in the UK, or when anyone inherits Spanish property, and the amount can range from almost nothing to a significant bill depending on the region, the relationship and the heir's residence. This guide explains who pays, the state rates and multipliers, how the regions change the result, how Spanish and UK inheritance tax interact without a treaty, and the deadlines that catch families out. It is general information, not personal tax or legal advice. State figures are from the consolidated text of Ley 29/1987 on the official state gazette (BOE), and the regional reliefs described were checked against official regional sources in October 2026; regional rules change often, so recheck them for the date of death or gift before relying on them.
Under Ley 29/1987, the taxpayer is the person who receives the inheritance, gift or life insurance payment, not the estate of the person who has died. Each heir is assessed separately on the value they receive, after deducting their share of allowable debts and expenses. Whether Spain can tax them depends on the heir's own position. An heir who is Spanish tax resident under the income tax rules is taxed under personal obligation on everything they inherit or are given, wherever the assets are located and wherever the deceased lived (article 6). An heir who is not Spanish resident is taxed under real obligation only on assets located or rights exercisable in Spain, such as Spanish property, Spanish bank accounts and certain life insurance contracts with Spanish insurers or entered into in Spain (article 7). Life insurance proceeds paid on the death of the policyholder to a different person also fall within this tax rather than income tax (article 3). The tax point for an inheritance is generally the date of death (article 24). Our guide to tax in Spain for expats explains how Spanish tax residence is decided.
Because the heir's residence and the location of the assets drive the result, the same family can be in very different positions. First, a parent living in Spain dies and leaves Spanish property to children living in the UK: the children are non-resident, so Spain taxes them only on the Spanish assets, using the rules of the region where the parent lived. Second, a British retiree living in Spain inherits from a parent who lived in the UK: as a Spanish resident, the heir can be taxed in Spain on the whole UK inheritance, even though it is also within UK inheritance tax, and the rules of the heir's own region apply where there are no Spanish assets. Third, a UK resident inherits a holiday home in Spain from a UK resident relative: the heir pays Spanish tax on the Spanish property only, under the rules of the region where the greatest value of Spanish assets is located. These connecting rules are in the second additional provision of Ley 29/1987, introduced after the Court of Justice of the European Union ruling of 3 September 2014 (case C-127/12) and now applied to non-residents generally, including UK residents. For Spanish residents, the regional connecting rules in the regional financing law (Ley 22/2009) generally look to the region where the deceased, or for gifts of other assets the recipient, spent the most days in the five years before the death or gift, and the second additional provision uses the same five year test where it refers to residence in a region.
The calculation has four steps: the value received, less reductions, gives the taxable base; the scale is applied; the result is multiplied by a coefficient based on the heir's relationship and existing wealth; and any regional bonus is then deducted. Where a region has not set its own figures, the state reductions in article 20 apply: 15,956.87 euros for children aged 21 or over, spouses and parents (Group II); the same figure plus 3,990.72 euros for each year under 21, up to 47,858.59 euros, for younger children (Group I); 7,993.46 euros for siblings, nephews, nieces, aunts, uncles and in laws (Group III); and nothing for more distant relatives and unrelated people (Group IV). There are further state reductions, including 95% of the value of the deceased's main home, up to 122,606.47 euros per heir, for a spouse, ascendants, descendants or a relative over 65 who lived with the deceased for two years, provided the home is kept for 10 years, and up to 9,195.49 euros of life insurance for close family. The state scale in article 21 runs from 7.65% to 34% on taxable amounts above 797,555.08 euros. The result is then multiplied by a coefficient in article 22 of between 1.0 and 1.2 for Groups I and II, between 1.5882 and 1.9059 for Group III, and between 2.0 and 2.4 for Group IV, rising with the heir's existing wealth. Unmarried partners who are not recognised as registered or equivalent partners under the applicable regional rules are generally treated as unrelated under the state rules, which can produce effective rates well above 34%.
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The autonomous communities can set their own reductions, scales, coefficients and bonuses, and most have done so, so the region whose rules apply often matters more than the state scale. For close family (Groups I and II, broadly spouses, children, grandchildren and parents), several regions popular with British expats give very large relief. The Comunidad de Madrid applies a 99% bonus to the tax for Groups I and II on inheritances and gifts under article 25 of its consolidated tax law, and, following Ley 2/2025 with effect from 1 July 2025, a 50% bonus for Group III relatives such as siblings, nephews and nieces. For gifts, a public deed is required for the bonus where the taxable base exceeds 10,000 euros, counting gifts from the same donor in the previous three years, and for cash the origin of the funds must be justified. The Valencian Community, which includes Alicante and the Costa Blanca, introduced a 99% bonus for Groups I and II on inheritances and life insurance, and on gifts to spouses, parents, children, grandchildren and grandparents, which must be formalised in a public deed, through Ley 6/2023, with retrospective effect from 28 May 2023. In Andalusia, which includes Malaga and the Costa del Sol, the regional tax agency (ATRIAN) describes a 99% bonus on the tax for Groups I and II, alongside an enhanced regional reduction of 1,000,000 euros for those groups, for which the former pre-existing wealth condition was removed for deaths from 1 January 2022, so these are two separate reliefs that work together. In the Balearic Islands, a 100% bonus introduced by Decreto ley 4/2023 with effect from 18 July 2023, now set out in article 36 of the regional consolidated tax law as worded by Ley 11/2023, applies on inheritances for Group I and II heirs who are taxed in Spain under personal obligation (broadly Spanish residents), with a limit on the declared value of property linked to its reference value; non-resident heirs should check whether it applies to them. Other regions, including Catalonia, give more limited relief for adult children, which can taper as the inheritance grows, so meaningful liabilities can still arise there. Relief for siblings, nephews and nieces, unmarried partners in some regions and unrelated heirs is usually much lower, and in many regions there is no equivalent relief even for close family, so liabilities can be substantial after reliefs. Even where a bonus reduces the tax to very little, a return or other declaration is often still required, although filing obligations vary by region and relief, and bonuses often carry conditions, such as a notarised deed for gifts or proof of where gifted cash came from. Regional rules change frequently, often in annual budget laws, so they must be checked for the specific year and region. They are described here as general information, not as a reason to move to, or hold assets in, any particular region.
The UK and Spain have no inheritance tax treaty: GOV.UK lists UK inheritance tax agreements with only a handful of countries, namely Ireland, South Africa, the USA, the Netherlands, Sweden and Switzerland, plus older agreements with France, Italy, India and Pakistan, and Spain is not among them. Both taxes can therefore apply to the same assets, and relief depends on each country's own rules. UK inheritance tax is charged on the estate of the person who died, generally at 40% on the value above the available nil rate bands, subject to exemptions and reliefs. UK situated assets are generally within UK inheritance tax wherever the deceased lived. Since 6 April 2025, whether non-UK assets are also within it depends on long-term UK residence: broadly, being UK resident for at least 10 of the previous 20 tax years, with exposure continuing for between 3 and 10 tax years after leaving, depending on how long the person was UK resident. Where a Spanish resident heir pays Spanish tax on an inheritance that has also borne foreign inheritance tax, article 23 of Ley 29/1987 allows a deduction for the lower of the foreign tax actually paid on that inheritance and the Spanish average effective rate applied to the assets located abroad. On the UK side, HMRC can give unilateral relief under section 159 of the Inheritance Tax Act 1984 for overseas tax charged on the same property, but the credit is limited and depends on where the property is situated under the rules, so relief for Spanish tax on UK assets is not automatic. Our guide to UK inheritance tax for British expats explains the long-term residence rules in more detail.
Assets are valued at the date of death. Since 1 January 2022, Spanish property is generally valued at no less than its reference value set by the Spanish land registry (valor de referencia), following changes made by Ley 11/2021, and declaring a lower value can lead to an assessment. An inheritance return must be filed within six months of the death, under article 67 of the regulations (Real Decreto 1629/1991). An extension of a further six months can be requested within the first five months, but interest runs for the extended period. Gifts must be declared within 30 working days. Spanish residents generally file with the tax agency of the relevant region. Non-residents taxed on Spanish assets generally file with the state tax agency, while still applying the regional rules identified by the connecting rules above. Heirs will usually need a Spanish tax identification number, normally an NIE for foreign nationals, and Spanish banks and land registries will normally ask for evidence that the tax has been declared before releasing or transferring assets. Other Spanish costs can apply on top, such as the municipal tax on the increase in urban land value (plusvalia municipal), which may apply when urban property passes on death, subject to the municipality's rules and any reliefs, notary and registry fees, and translation and legalisation of UK documents such as grants of probate and wills. Our guide to estate planning for Brits in Spain and Portugal covers wills, forced heirship and the EU Succession Regulation.
Spanish gift tax uses the same rules, with the recipient as the taxpayer, but residence works slightly differently: lifetime gifts of Spanish property to non-residents are taxed under the rules of the region where the property is located, while other gifts to Spanish residents generally follow the recipient's region. A gift is not free of tax just because the giver survives a set period: unlike UK inheritance tax, Spanish gift tax is charged when the gift is made. Many regional bonuses for gifts require a notarised public deed, and for cash, evidence of where the money came from and how it was paid. Before making changes, it is worth understanding how each heir's residence, the region, the type of asset and the timing would interact, and how the UK rules apply to the same transfer. For example, a gift that is wholly or largely relieved in Spain under a regional bonus could still count for UK inheritance tax if the giver dies within seven years and is within UK inheritance tax. Life insurance policies, pensions and investments paid to a Spanish resident beneficiary also need checking, because their Spanish treatment depends on the type of arrangement and how benefits are paid. Any action, including no action, should follow a suitability assessment and appropriate Spanish and UK tax and legal advice, and should be judged on overall tax, cost and risk, not on Spanish inheritance tax alone.
The biggest surprise for British families is that Spain looks at the person inheriting, not the person who has died. Two children inheriting from the same estate can be in quite different Spanish positions if one lives in the UK and the other in Spain, so it helps to map out who your heirs are, where they live and which region's rules would apply before looking at anything else.
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Spanish tax is charged on each heir, based on their own residence, relationship and existing wealth. Two children inheriting equal shares can face different Spanish bills if one lives in Spain and the other in the UK.
A Spanish resident who inherits from a parent in the UK can be taxed in Spain on the whole inheritance, including UK assets, even after UK inheritance tax has been paid. Spain allows a deduction for foreign tax paid, but only up to the Spanish tax on the foreign assets.
Where a high regional bonus for close family applies, it can reduce the tax substantially, but a return or other declaration is often still required, the bonus applies to the tax calculated after reductions and coefficients, it depends on the region, the heir's group and residence and other conditions, and it may not cover siblings, nieces, nephews or unrelated heirs.
The inheritance return is due within six months of the death. An extension must be requested within the first five months, and late filing can bring surcharges and interest on top of the tax.
Regional gift bonuses often require a notarised public deed and evidence of where cash came from. A bank transfer to a child without the paperwork can lose the bonus, and the gift may also still count for UK inheritance tax if the giver dies within seven years.
Under the state rules an unmarried partner is generally treated as unrelated, with no allowance and a higher multiplier. Some regions treat registered couples like spouses, so the region and registration status should be checked early.
Regional bonuses can make a very large difference for close family, but they are conditional and they change. People often assume a 99% bonus means there is nothing to do, when there is still a return to file within six months, and gifts can lose the bonus if they are not documented properly. The rules for the actual year and region always need checking.
Illustrative example only, not a real client. This example is simplified and fictional, applies the state rules in Ley 29/1987 and the Andalusian reliefs for Group II heirs as stated assumptions for 2026, ignores currency movements and valuation detail, and is not a guarantee of any outcome. Helen moved from Kent to Malaga eight years ago and is Spanish tax resident. Her mother, who lived in the UK all her life, has died and left her estate equally to Helen and Helen's brother, who lives in the UK. Helen's share is mainly half of her mother's UK house and cash. She assumed that, because the estate was in the UK and UK inheritance tax was being dealt with by the executors, there was nothing to do in Spain.
A review with a regulated financial adviser, working alongside a Spanish tax specialist, explained that as a Spanish resident Helen is taxed in Spain on everything she inherits, wherever it is located, while her brother, as a UK resident with no Spanish assets in the estate, has no Spanish tax to consider. Because her mother was not Spanish resident and there were no Spanish assets, Helen would apply the rules of her own region, Andalusia. On these assumptions, as a child of the deceased she falls within Group II, so the Andalusian reliefs for Group II heirs, the enhanced reduction and the 99% bonus, could reduce, eliminate or leave part of the Spanish tax in place depending on the facts and whether their conditions were met, so no saving or liability could be predicted without a full calculation, and any UK inheritance tax attributable to her share could also be deducted, up to the Spanish tax on those UK assets. The review flagged that she would still need to file a Spanish return within six months of the death, or request an extension within the first five months, and that the bonus conditions and valuation rules should be confirmed by the Spanish tax specialist.
Illustrative figures and outcomes only: this does not assess suitability or recommend any course of action, and no tax outcome, liability or saving is guaranteed. Helen understood that she had a Spanish filing obligation even though the estate was in the UK, that her region's rules would largely decide any Spanish tax, and that the timetable ran from her mother's death. Whether any changes to how she held the money she inherited would be appropriate was a separate question, needing its own suitability assessment and tax advice, and advice may conclude that no changes are suitable. Different facts, a different region or a different relationship to the deceased could produce a very different result.
Illustrative example, not a real client.
Clarity Global Wealth helps British families with links to Spain understand the questions to discuss about Spanish inheritance and gift tax before they act, including which heirs could be taxed in Spain, which region's rules would apply, how Spanish and UK inheritance tax could interact on the same assets, how life insurance, pensions and investments might be treated, and the deadlines that apply after a death or gift. We can arrange a free introduction to regulated financial planning; the introduction is an initial conversation, not advice, and places you under no obligation to proceed with advice or any product, so you can review your position with a regulated financial adviser before making changes to savings, investments or how assets are held, where advice is appropriate. Any charges for advice would be explained to you before you proceed. The value of investments can fall as well as rise, tax treatment depends on individual circumstances and can change, tax reliefs and regional rules may change and their value depends on individual circumstances, and advice may conclude that no changes are suitable. Clarity Global Wealth does not provide tax, legal or accounting advice, and adviser comments in this guide are general information, not personal recommendations. Spanish inheritance and gift tax returns, wills and probate are work for qualified Spanish tax advisers and lawyers, so where that is needed we coordinate with qualified specialists.
Related guides: Expat Estate Planning for Brits in Spain and Portugal, Tax in Spain for Expats in 2026, Wealth Tax in Spain for Expats, Capital Gains Tax in Spain for Expats, UK Inheritance Tax for British Expats, Inheritance Tax on Pensions from April 2027 and Drawing Your UK Pension While Living Abroad.
This guide is provided for general information only and reflects our understanding of the rules as at the date of publication. It is not personal financial, investment, pension or tax advice, and should not be relied upon as such. Rules and tax treatment can change and depend on your individual circumstances and country of residence. You should always seek regulated advice specific to your situation before taking action.
It depends on the heir. A Spanish tax resident is taxed in Spain on everything they inherit, wherever the assets are and wherever the deceased lived. A non-resident is taxed in Spain only on Spanish assets, such as Spanish property or bank accounts.
Under the state rules, after the allowances, the scale runs from 7.65% to 34%, and the result is multiplied by a coefficient of 1.0 to 2.4 depending on the relationship and the heir's existing wealth. Most regions set their own rules. As checked in October 2026, Madrid, the Valencian Community and Andalusia have 99% bonuses on the calculated tax for spouses, children, parents and other Group I and II heirs, and the Balearic Islands a 100% inheritance bonus for those heirs where they are taxed under personal obligation, each subject to conditions. The actual figure depends on the region, relationship, residence and assets involved.
Yes, a Spanish tax resident can be taxed in Spain on a UK inheritance. Spain allows a deduction for foreign inheritance tax paid on the same inheritance, limited to the Spanish tax on the foreign assets, and the rules of your own region generally apply where the estate has no Spanish assets.
No. GOV.UK lists UK inheritance tax agreements with only a few countries, and Spain is not one of them. Relief for double taxation depends on each country's domestic rules: the Spanish deduction for foreign tax in article 23 of Ley 29/1987 and UK unilateral relief under section 159 of the Inheritance Tax Act 1984.
As checked in October 2026, Madrid, the Valencian Community and Andalusia have 99% bonuses on the calculated tax for Group I and II heirs, and the Balearic Islands a 100% inheritance bonus for those heirs where taxed under personal obligation, each with conditions, and some other regions also have high bonuses. This is general information: where to live or hold assets should not be decided on inheritance tax alone, and income tax, wealth tax, residence rules, succession law and family circumstances all matter. Relief for siblings, nephews, nieces and unrelated heirs is much lower, and regional rules change often, so check the year and region that apply.
The return must be filed within six months of the date of death. An extension of up to six more months can be requested within the first five months, with interest charged for the extension period. Gifts must be declared within 30 working days.
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