Spanish Inheritance Tax for Non-Residents 2026: How Much, Exemptions and Deadlines

Does Inheritance Tax Apply to Non-Residents?

Yes. Spanish inheritance tax applies based on where the inherited assets are located, not where the deceased or the heirs lived.

The Court of Justice of the European Union ruled on 3 September 2014 (Case C-127/12) that Spain could not treat residents and non-residents differently for inheritance tax purposes. The law was subsequently amended and, since 11 July 2021 (Law 11/2021, in line with Supreme Court judgment 242/2018 of 19 February), the right to apply the regional rules covers all non-residents, whether they live in the EU, the EEA or a third country. This means all non-residents can now access the more favourable regional tax regulations — including the Canary Islands' near-zero rate.

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How Spanish Inheritance Tax Is Calculated

The calculation has three steps:

Step 1: Determine the Taxable Base

The taxable base is the net value of what you receive: the gross value of assets minus any deductible debts (mortgages, funeral expenses, etc.) and minus any applicable personal allowances.

Personal allowances (state level — Article 20.2.a of Law 29/1987):

Where the Canary Islands rules apply, the allowances are higher (Article 20 of Canary Islands Legislative Decree 1/2009): €40,400 for the spouse, €23,125 for children aged 21 or over, €18,500 for parents and €9,300 for Group III.

Step 2: Apply the Tax Rate

Spain uses a progressive scale. The state rates range from 7.65% to 34% depending on the amount:

Step 3: Apply the Multiplier

The tax calculated is then multiplied by a coefficient (from 1.0 to 2.4) based on the heir's existing wealth and degree of kinship. Wealthier heirs and more distant relatives pay more. This means the effective rate can be much higher than the bracket rates suggest.

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The Canary Islands 99.9% Exemption — The Key for Canarias Heirs

Since 6 September 2023 (Decree-Law 5/2023, which redrafted Article 24 ter of Canary Islands Legislative Decree 1/2009), the Canary Islands Autonomous Community applies a 99.9% bonus on inheritance tax for Group I, Group II and Group III heirs (spouses, children, parents and also brothers and sisters, nephews and nieces, uncles and aunts).

What this means in practice:

Example:

• Parent dies, leaving a property in Gran Canaria worth €350,000 to their adult child
• Tax calculated before the bonus: approximately €62,300 (state scale, after the €23,125 Canary Islands allowance for a child aged 21 or over, with no other reductions and a multiplier of 1)
• After 99.9% Canary Islands bonus: about €62 (yes, sixty-two euros)

This exemption applies to non-residents as well as residents, provided:

• The Canary Islands rules apply to the estate (the deceased lived in the Canary Islands or, if the deceased was not resident in Spain, the highest-value Spanish assets are located there)
• The heir is a Group I, Group II or Group III beneficiary

Groups eligible for the 99.9% bonus:

• Group I: children and other descendants under 21
• Group II: children (21+), parents, grandparents, spouses and civil partners
• Group III: brothers/sisters, nephews/nieces, aunts/uncles, and ascendants and descendants by marriage

Group NOT eligible for the 99.9% bonus:

• Group IV: more distant relatives and unrelated persons

The bonus reduces the tax payable: the return must still be filed within the deadline.

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Deadline: 6 Months from Date of Death

The inheritance tax return must be filed — and the tax paid — within 6 months of the date of death.

If you miss this deadline and file late without a prior demand from the tax office (Article 27 of the General Tax Act):

• Up to 12 months late: surcharge of 1% plus a further 1% for each full month of delay
• More than 12 months late: 15% surcharge plus late-payment interest

Requesting an Extension

If 6 months is not enough time to gather documents (especially when the deceased was a foreigner or had complex assets), you can request a 6-month extension within the first five months of the deadline (Article 68 of the Inheritance and Gift Tax Regulations).

Important: the extension means you pay interest on the tax, but avoids the much higher surcharges for late filing.

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What Assets Count and How Are They Valued?

The "valor de referencia" issue: Since 2022, the Hacienda uses an official reference value for properties, often different from the actual sale price. Heirs can challenge this value if they believe it's too high, which can significantly reduce the tax bill.

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Documents Required for Non-Resident Heirs

To file the inheritance tax return in Spain, non-residents typically need:

1. Death certificate (apostilled + sworn translation into Spanish if not in Spanish)
2. Proof of relationship (birth/marriage certificate, apostilled + translation)
3. Deceased's last will or declaration of intestate heirs — if there is a foreign will, it may need to be recognised in Spain through the legal process
4. NIE number for the heir(s) — a Spanish tax identification number is mandatory
5. Title deeds or registro de la propiedad extract for any Spanish real estate
6. Bank statements from Spanish accounts at date of death
7. Inventory of all Spanish assets and their values

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The Process: Step by Step

1. Obtain the NIE

Every heir must have a Spanish NIE (Número de Identificación de Extranjero) to pay Spanish taxes. This can be obtained at a Spanish consulate in your country or at the Extranjería office in Spain.

2. Accept or Renounce the Inheritance

Before paying taxes, heirs must formally accept or renounce the inheritance. In Spain, this is done through a escritura de aceptación de herencia (notarised deed of acceptance), executed before a Spanish notary.

3. File the Tax Return

Heirs who are not resident in Spain file their ISD return with the State Tax Administration (Administración Tributaria del Estado): only the tax of heirs resident in Spain is assigned to the autonomous communities (Article 32.2 of Law 22/2009). They are still entitled to apply the regional rules described above (Additional Provision 2 of Law 29/1987).

Heirs resident in Spain file with the tax office of the autonomous community where the deceased was resident. In the Canary Islands: the relevant tax office is the Agencia Tributaria Canaria.

4. Pay the Tax

Non-resident heirs file a self-assessment: you calculate the tax, apply the 99.9% Canary Islands bonus if you qualify, and pay the remaining 0.1% when you file.

5. Register the Property

After tax clearance, any Spanish property can be transferred into the heirs' names at the Property Registry (Registro de la Propiedad).

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Other Taxes to Consider

Municipal Capital Gains Tax (Plusvalía Municipal)

When real estate is inherited, the local municipality charges a tax on the increase in land value since the last transfer. In the Canary Islands, this is typically a modest amount for residential properties. It is calculated separately from inheritance tax.

Income Tax When Selling

If you later sell an inherited Spanish property, you may be subject to capital gains tax in Spain on the difference between the sale price and the value at the date of inheritance. Non-residents are taxed at a flat rate (currently 19% on the gain whatever their country of residence — Article 25.1.f of the Non-Resident Income Tax Act — though treaties may apply).

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UK Citizens Inheriting in Spain Post-Brexit

Since Brexit, UK citizens are no longer EU residents for Spanish tax purposes. However, since Law 11/2021 all non-residents (EU and non-EU alike) can access the regional inheritance tax regulations. UK citizens inheriting Canary Islands property therefore still benefit from the 99.9% exemption.

UK-Spain inheritance considerations:

• Spain taxes based on asset location
• UK taxes based on domicile of the deceased
• There is no UK-Spain double taxation treaty for inheritance tax
• UK residents may face inheritance tax in both countries on the same Spanish assets (though relief may be available for foreign tax paid)

Specialist advice is essential for UK nationals with significant Spanish assets.

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How ALY Abogados Can Help

Administering a Spanish inheritance as a non-resident involves legal procedures in two countries, strict deadlines, and significant penalties for errors. Our team in Las Palmas de Gran Canaria handles the entire process:

• NIE applications for all heirs
• Acceptance of inheritance before Spanish notary
• Inheritance tax return and application of the Canary Islands 99.9% exemption
• Property registration in the heirs' names
• Advice on subsequent sale of Spanish property and capital gains implications

Request an initial consultation — we will explain the full process and the approximate costs for your specific situation. Your first consultation fee is deducted from our fees if you instruct us.

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Lázaro Héctor Amable Méndez — Lawyer, Bar No. 5.231 ICALPA