Spanish Succession Tax: 2026 guide for non-residents

Guide updated on 10 September 2026 against the consolidated texts of Law 29/1987 on Inheritance and Gift Tax, its Regulations (Royal Decree 1629/1991), Andalucía’s Law 5/2021 on ceded taxes, Law 22/2009 on regional financing and the General Tax Act (Law 58/2003).

Spanish Inheritance Tax (Impuesto sobre Sucesiones y Donaciones, ISD) is the most variable tax in Spain. The same inheritance can be almost tax-free for a child in Andalucía and cost tens of thousands of euros for a nephew, or for a child in a region with fewer benefits. The difference lies in which regional rules apply, the kinship group, and whether the reductions and bonifications are claimed correctly in the return.

This 2026 guide covers what a non-resident heir needs to know: who pays, how the tax is calculated, which regional rules apply to non-residents, what Modelo 650 is, and worked examples with real figures for the most common scenarios on the Costa del Sol.

Who pays Spanish Inheritance Tax?

The heir pays the tax (not the deceased’s estate, unlike UK Inheritance Tax or US federal estate tax). Each heir files a separate return on their own share (art. 5 of Law 29/1987).

You pay Spanish Inheritance Tax if:

• You are a Spanish tax resident inheriting anywhere in the world (“obligación personal”, art. 6), with a deduction for similar tax paid abroad (art. 23).
• You are a non-resident inheriting assets located in Spain — property, bank accounts, shares in Spanish companies, life-insurance payouts from Spanish insurers (“obligación real”, art. 7).

How the tax is calculated

Step by step, with the state rules and the Andalusian rules side by side (the Andalusian rules apply to most Costa del Sol inheritances, as explained below):

1. Gross estate = value of the inherited assets at the date of death. For property, the Cadastre’s “valor de referencia” is the minimum taxable value since 2022; a higher declared value prevails (art. 9).
2. Less deductible debts of the deceased that can be proven (mortgages, taxes owed, documented bills) and funeral and last-illness expenses (arts. 13 and 14).
3. Plus 3 % for household goods (“ajuar doméstico”), unless a lower value or its non-existence is proven (art. 15).
4. Equals the taxable base, divided among the heirs according to their shares.
5. Less reductions (art. 20 of the state Act, improved in Andalucía by Law 5/2021):
   • Kinship reduction: state amounts of €15,956.87 (Groups I and II) and €7,993.46 (Group III); in Andalucía, €1,000,000 for Groups I and II and €10,000 for Group III (art. 28).
   • Deceased’s main home inherited by the spouse, descendants or ascendants: 95 % of its value with a limit of €122,606.47 per heir under the state rule (art. 20.2.c); 99 % in Andalucía, provided the home is kept for three years (art. 27).
   • Family business or shareholdings that qualify for the Wealth Tax exemption: 95 % under the state rule; 99 % in Andalucía (arts. 30 and 31).
   • Life insurance received by the spouse, descendants or ascendants: 100 % up to €9,195.49 (art. 20.2.b).
6. Equals the net taxable base.
7. Apply the progressive scale: 7.65 % to 34 % under the state scale (art. 21.2); 7 % to 26 % under the Andalusian scale (art. 37 of Law 5/2021).
8. Apply the multiplier coefficient: under the state rules it depends on the heir’s kinship group and pre-existing wealth (1.0 to 2.4, art. 22); in Andalucía it depends on the group alone — 1.0 for Groups I and II, 1.5 for Group III and 1.9 for Group IV (art. 38).
9. Apply the regional bonification to the resulting tax: 99 % in Andalucía for Groups I and II (art. 39). There is no bonification for Groups III and IV.
10. Equals the tax due.

Kinship groups

Regional rules in 2026: what the spouse, children and parents get

Each autonomous community sets its own reductions, scale, coefficients and bonifications for inheritances (Law 22/2009), and Navarre and the Basque Country have their own foral tax systems. The table summarises what applies in 2026 to spouses, descendants and ascendants (Groups I and II), checked against the consolidated text of each regional law:

Bottom line: for spouses, children and parents, most regions now leave little or no tax to pay. The exceptions are Asturias above €300,000, Catalonia beyond the first bands, Galicia and Aragón above their reductions, Navarre above €250,000 and the Basque Country above €400,000. For siblings, nephews and nieces and unrelated heirs the tax remains substantial almost everywhere, Andalucía included. Which region’s rules apply to you is explained next.

Which rules apply to a non-resident heir?

Until 2014 non-residents could only apply the state rules, without regional reductions or bonifications. The Court of Justice of the European Union declared that discriminatory in case C-127/12 (judgment of 3 September 2014). The Second Additional Provision of Law 29/1987 — introduced by Law 26/2014 for residents of the EU and the EEA and extended by Law 11/2021 to residents of any other country — now sets these rules:

• If the deceased was resident in Spain, non-resident heirs apply the rules of the autonomous community where the deceased lived (for the Costa del Sol, Andalucía).
• If the deceased was not resident in Spain, the heirs apply the rules of the community where the greater value of the Spanish assets is located; if there are no assets in Spain, resident heirs apply the rules of their own community.
• This applies to residents of the United Kingdom, the United States, Canada, Australia, Switzerland and any other country; the Supreme Court had already extended the regional rules to third-country residents in judgments of 2018, before the 2021 reform.

Two practical consequences. First, the regional reductions and bonifications are applied by you in the self-assessment: they are not granted automatically. Second, non-resident heirs file with the State Tax Agency (AEAT, Oficina Nacional de Gestión Tributaria), not with the regional tax office, even though they apply the regional rules (art. 32 of Law 22/2009 and section Two of the Second Additional Provision). Heirs resident outside the EU — UK residents since Brexit included, with an exception for EEA countries with mutual-assistance arrangements — must also appoint a representative in Spain before the filing deadline (art. 18.4 of the Regulations).

Worked examples (Andalusian rules, 2026)

All figures leave out the 3 % household-goods addition and any deductible debts, and assume the property was not the deceased’s main home unless stated. They are calculated with the scale of art. 37 and the coefficients of art. 38 of Law 5/2021, and with the state scale of art. 21.2 of Law 29/1987 for comparison.

Example 1 — UK resident inheriting a €400,000 villa in Marbella from her father

• Heir: adult daughter (Group II), UK resident. Deceased resident in Andalucía.
• Taxable base: €400,000. Andalusian kinship reduction: €1,000,000 (it replaces the state reduction of €15,956.87).
• Net taxable base: €0. Tax: €0. Modelo 650 must still be filed with the AEAT within six months, and a representative in Spain must be appointed.
• Under the state rules alone the tax would be about €76,900 (base of €384,043 on the state scale, coefficient 1.0).

Example 2 — German resident inheriting a €1.5M villa in La Zagaleta from his father

• Heir: adult son (Group II), German resident.
• Taxable base: €1,500,000 − €1,000,000 kinship reduction = €500,000.
• Andalusian scale on €500,000: €99,620 (art. 37). Coefficient 1.0. Bonification of 99 %: tax due about €996.
• If the villa was the deceased’s main home and the son keeps it for three years, the 99 % main-home reduction applies first (art. 27) and the tax is €0.
• Under the state rules the tax would be about €433,000.

Example 3 — Son resident in Andalucía inheriting €600,000 from his father, who lived in the UK

• Heir: Spanish tax resident (Group II). Estate: a flat in Fuengirola worth €350,000 and UK assets worth €250,000.
• A Spanish resident is taxed on the whole inheritance, wherever the assets are (art. 6). Because the deceased was not resident in Spain, the rules of the community where the greater value of the Spanish assets is located apply — Andalucía — and the return is filed with the AEAT.
• Taxable base €600,000 − €1,000,000 reduction = €0. Tax: €0.
• Had any Spanish tax resulted, the deduction for international double taxation of art. 23 allows a Spanish-resident heir to deduct, within its limits, a similar tax paid abroad on the same assets.

Example 4 — Nephew inheriting a €300,000 apartment in Benalmádena from his aunt

• Heir: nephew (Group III), resident in Ireland. Deceased resident in Andalucía.
• Taxable base €300,000 − €10,000 Group III reduction = €290,000.
• Andalusian scale on €290,000: €51,420; coefficient 1.5: tax due €77,130. There is no bonification for Group III.
• The same apartment inherited by a child or by the spouse would pay €0. Lifetime gifts to nephews and nieces are taxed on the same scale, so for Group III heirs the tax has to be budgeted for and, where there is no cash in the estate, deferred or paid in instalments (see below).

In other regions the result differs: in Catalonia, for example, a child pays tax on the excess over the €100,000 reduction with a bonification that decreases as the base grows. We calculate every case with the regional law in force at the date of death.

Modelo 650 — the return

• One self-assessment (Modelo 650) per heir. In Andalucía self-assessment is compulsory (art. 34 of Law 29/1987): resident heirs of a deceased who lived in Andalucía file with the Agencia Tributaria de Andalucía (Modelo 660 for the estate plus a Modelo 650 per heir); non-resident heirs, and all heirs of a deceased who was not resident in Spain, file the state Modelo 650 with the AEAT.
• It includes the heir’s NIE, the deceased’s details, the full inventory with valuations, the reductions claimed, the calculation and the payment, together with the death certificate, the certificate of last wills, the will or declaration of heirs and the inheritance deed or a private inventory.
• Deadline: six months from the date of death (art. 67 of the Regulations). It can be extended by another six months if the extension (prórroga) is requested within the first five months; the extension carries late-payment interest (art. 68).

Surcharges for late filing

Since Law 11/2021 the surcharge for filing late without a prior demand from the tax office is 1 % plus a further 1 % for each full month of delay; after twelve months it is 15 % plus late-payment interest from that point (art. 27 of the General Tax Act, Law 58/2003). Filed within the six months, or within the extension granted, there is no surcharge. If the tax office demands the return first, a penalty procedure applies instead (art. 191), and the tax office has four years from the end of the filing period to assess the tax (arts. 66 and 67).

Frequently asked questions

Is Spanish Inheritance Tax deductible against UK Inheritance Tax?

There is no Spain–UK treaty on inheritance tax (Spain’s only inheritance-tax treaties are with France, Greece and Sweden; the 2013 Spain–UK convention covers income and capital gains taxes). Relief is unilateral on each side. In the UK, section 159 of the Inheritance Tax Act 1984 gives a credit against UK IHT for a similar tax charged in the country where the property is situated, so the Spanish tax paid on a Spanish property can normally be credited against the UK IHT attributable to that property. In Spain, a resident heir deducts similar tax paid abroad under art. 23 of Law 29/1987. We coordinate with your UK adviser when needed.

What if I am not related to the deceased (a friend, or a partner who was not registered)?

Group IV applies: no kinship reduction, coefficient 1.9 in Andalucía (2.0 to 2.4 under the state rules) and no bonification. A €100,000 inheritance from a friend pays about €24,000 in Andalucía (€12,620 on the scale × 1.9). A partner registered in an official register of unmarried partnerships is treated as a spouse (art. 26 of Law 5/2021); an unregistered partner falls into Group IV.

What if the deceased had a Spanish bank account but no property?

Bank accounts and other assets located in Spain are taxed in the same way, and the return must be filed even if no tax results. The bank will not release the funds until the inheritance has been accepted and the tax return filed; it can, however, pay the tax directly to the tax office from the deceased’s own accounts (art. 8.1.a of Law 29/1987).

Can I pay in instalments?

Yes. If the estate does not contain enough cash or easily realisable assets, the tax office can defer payment for up to one year or split it into up to five annual instalments against a guarantee, both with late-payment interest (art. 38 of Law 29/1987 and arts. 82 and 83 of the Regulations). The tax attributable to the deceased’s main home or family business can be deferred for five years without interest and then paid in ten half-yearly instalments (art. 39). The request must be made before the filing deadline expires.

What is the “valor de referencia” and why does it matter?

Since 1 January 2022 the Directorate-General for Cadastre publishes a reference value for most properties. It is the minimum taxable value in Inheritance Tax; if you declare a higher value, the higher value applies (art. 9 of Law 29/1987). The reference value can only be challenged by requesting the rectification of the self-assessment or by appealing the assessment (art. 9.3). Where a property has no reference value, the market value at the date of death is declared, and the tax office may check it (art. 57 of the General Tax Act).

Can I challenge the tax assessment?

Yes. If you filed a self-assessment you can request its rectification (art. 120.3 of the General Tax Act); against an assessment issued by the tax office you can file an optional reconsideration appeal (recurso de reposición, art. 222) or an economic-administrative claim before the TEAR or the TEAC (arts. 226 and following), and afterwards go to the courts. Typical grounds are valuation, reductions that were not applied and calculation errors.

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See: Inheritance in Spain for non-residents (full guide) →