In the event that you have received an inheritance in Spain, even if you are a non-resident, you must file a self-assessment for the Inheritance and Donations Tax with the Spanish Tax Agency. The self-assessment form is Form 650. In the Autonomous Community of Andalusia, a recent reduction in the taxable base has been established for spouses and direct relatives in inheritances, for an amount of up to one million euros.
Who can benefit from this reduction in the taxable base for inheritances in Spain?
To qualify for this reduction, the following conditions must be met by the heirs:
1º. They must have the following relationship with the deceased:
• Descendants or adopted children under the age of 21.
• Descendants or adopted children aged 21 or older, spouses, ascendants, or adoptive parents.
The following groups are considered equivalent to the above:
• Common-law partners registered in the Andalusian Common-Law Partners Registry, or in any similar registry of other public administrations equivalent to Andalusia’s.
• Individuals under permanent foster care or guardianship for the purpose of adoption are considered equivalent to adopted children.
• Individuals providing permanent foster care or guardianship for the purpose of adoption are considered equivalent to adoptive parents.
2º . The heir’s prior wealth in Spain must be equal to or not exceed 1,000,000 euros.
The taxable base for the Inheritance Tax in Spain is determined by the net value of each heir’s individual acquisition.
Bonus for Inter Vivos Donations
In the case of inter vivos donations, taxpayers subject to the Inheritance and Donations Tax who meet the relationship or equivalent conditions mentioned above will benefit from a 99% reduction in the tax quota derived from inter vivos donations, provided that the donation is formalized in a public document within the tax filing deadline and the origin of the funds is justified when the donation is in cash. The deadline to file the tax self-assessment and submit the required documentation is 30 business days from the day following the inter vivos donation.
If you would like more information about accepting your inheritance in Spain, do not hesitate to contact our team of lawyers and economists in Marbella.
