Spanish Inheritance Tax: What You Need to Know
Inheritance tax is an important consideration for expats with assets in Spain. Understanding the country’s inheritance tax laws can ensure that your assets are distributed according to your wishes and that your loved ones don’t face unexpected tax bills. In this article, we’ll explain the basics of Spanish inheritance tax and what you need to know to plan for your future.
Basics of Spanish Inheritance Tax
In Spain, inheritance tax is known as Impuesto sobre Sucesiones y Donaciones. It’s a tax that’s paid on inheritances and gifts and is applied at the regional level. The tax rates and exemptions vary depending on the region where the beneficiary resides, the relationship between the deceased and the beneficiary, and the value of the inherited assets.
Regional Differences in Spanish Inheritance Tax
The following table provides an overview of the inheritance tax rates and exemptions for each region in Spain based on the latest tax rules in 2023:
|Region||Tax Rate||Tax Exemption|
|Andalusia||1% – 20%||€1,000 – €1,000,000|
|Aragon||7.65% – 34%||€3,000 – €500,000|
|Asturias||7.65% – 34%||€8,000 – €400,000|
|Balearic Islands||1% – 20%||€1,000 – €1,000,000|
|Basque Country||1% – 30%||€500,000|
|Canary Islands||1% – 10%||€1,000 – €1,000,000|
|Cantabria||7.65% – 34%||€7,993 – €400,000|
|Castilla La Mancha||7.65% – 34%||€7,993 – €400,000|
|Castilla y Leon||7.65% – 34%||€8,000 – €400,000|
|Catalonia||1% – 30%||€100,000|
|Extremadura||1% – 20%||€1,000 – €1,000,000|
|Galicia||7.65% – 34%||€400,000|
|La Rioja||7.65% – 34%||€7,993 – €400,000|
|Madrid||7.65% – 34%||€15,956 – €500,000|
|Murcia||7.65% – 34%||€7,993 – €400,000|
|Navarra||0% – 34%||€500,000|
|Valencia||7.65% – 34%||€100,000|
Note: Tax rates and exemptions are subject to change.
As shown in the table, the tax rates and exemptions for inheritance tax can vary significantly between regions. Some regions have a higher tax rate and lower exemption threshold, while others have a lower tax rate and higher exemption threshold.
It’s important to note that tax exemptions are per beneficiary and per deceased person. This means that if there are multiple beneficiaries or more than one deceased person, each beneficiary will be entitled to their own tax exemption.
How to Plan for Spanish Inheritance Tax
If you’re an expat with assets in Spain, it’s crucial to plan for inheritance tax to ensure that your assets are distributed according to your wishes and that your loved ones don’t face unexpected tax bills. You can do this by seeking professional advice from a Chorus Financial advisor. Contact Chorus today for a free, no-pressure consultation.