Spanish Inheritance Tax for Non-Residents 2026: Complete Guide

If you are a non-Spanish resident who has inherited (or expects to inherit) assets located in Spain — whether property, bank accounts or investments — you need to understand how Spanish inheritance tax (Impuesto sobre Sucesiones y Donaciones, or ISD) works.

The good news: if the assets are in the Canary Islands, the effective tax burden for close family members can be virtually zero thanks to a 99.9% regional exemption.

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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.

Spain's Constitutional Court ruled in 2015 (and the law was subsequently amended) that non-EU residents must be treated equally to EU residents for inheritance tax purposes. 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 — applicable to non-residents):

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 based on the heir's existing wealth. Wealthier heirs 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 2011, the Canary Islands Autonomous Community has applied a 99.9% bonus on inheritance tax for Group I and Group II heirs (spouses, children, parents).

What this means in practice:

Example:

• Parent dies, leaving a property in Gran Canaria worth €350,000 to their adult child
• State-level tax calculated: approximately €42,000
• After 99.9% Canary Islands bonus: €42 (yes, forty-two euros)

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

• The assets (typically the property) are located in the Canary Islands
• The heir is a Group I or Group II beneficiary (spouse, descendants, ascendants)

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

Groups NOT eligible for the 99.9% bonus:

• Group III: brothers/sisters, nephews/nieces, aunts/uncles
• Group IV: more distant relatives and unrelated persons

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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:

• Up to 3 months late: 5% surcharge
• 3–6 months late: 10% surcharge
• 6–12 months late: 15% surcharge
• More than 12 months late: 20% surcharge plus 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 before the initial deadline expires.

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

The ISD return is filed at the tax office of the autonomous community where the deceased was last resident, or where the highest-value assets are located (for non-residents).

In the Canary Islands: the relevant tax office is the Agencia Tributaria Canaria.

4. Pay or Get Exempted

Once the return is filed, you either pay the tax or, in the case of Canary Islands heirs, receive confirmation that the 99.9% exemption applies.

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% for EU/EEA residents, 24% for others, 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, the 2015 ruling still applies — 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 a free initial consultation — we will explain the full process and the approximate costs for your specific situation.

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