Inheritance & Gift Tax (ISD) for Non-Residents
The Inheritance and Gift Tax (Impuesto sobre Sucesiones y Donaciones or ISD) is levied on the recipient of assets (the heir or donee). For individuals who are not tax residents in Spain, this tax applies under the Real Obligation rule, meaning the tax is only due on assets located in Spanish territory.
Notice Title
If you need an overall view of tax obligations click on Taxes in Spain Guide 2025
🏛️ Jurisdiction and Filing Requirements
When the non-resident factor is involved (either the deceased/donor or the recipient is a non-resident), the tax is primarily managed by the State Tax Agency (AEAT), specifically the National Tax Management Office (ONGT), rather than the regional tax offices.
📝 Assets Subject to Tax (Real Obligation)
Non-residents are taxed exclusively on the acquisition of assets or rights that are situated, exercisable, or to be fulfilled in Spanish territory.
This typically includes:
- Real Estate: All property (land, homes) located in Spain.
- Bank Accounts: Funds held in Spanish financial institutions.
- Securities: Shares or holdings in Spanish companies.
- Life Insurance: Policies taken out with Spanish entities.
Filing Forms and Deadlines
Non-residents (or Spanish residents receiving foreign assets/from non-resident deceased) must file a self-assessment with the AEAT.
| Type of Acquisition | AEAT Form | Who Files? | Deadline |
| Inheritance (Mortis Causa) | Modelo 650 | Non-resident heirs/legatees, OR Spanish residents inheriting from a non-resident deceased. | 6 months from the date of death (an extension can be requested). |
| Gift (Inter Vivos) | Modelo 651 | Non-resident donees receiving Spanish assets, OR Spanish residents receiving foreign real estate. | 30 business days from the date of the gift. |
💎 The Critical Advantage: Regional Law Application
Historically, non-residents were forced to apply the default, less generous State Tax Law, while residents benefited from generous Autonomous Community (CC. AA.) rules (e.g., 99% tax relief).
Following critical rulings by the Supreme Court, all non-residents (regardless of whether they are from the EU/EEA or a third country like the USA or UK) now have the right to apply the more favorable regional regulations.
Which Regional Law Applies?
The applicable regional law depends on the circumstances of the transfer:
| Scenario | Applicable CC. AA. Rules |
| Non-Resident deceased + Non-Resident heir | The rules of the CC. AA. where the highest value of the Spanish assets is located. |
| Spanish Resident deceased + Non-Resident heir | The rules of the CC. AA. where the deceased was habitually resident for the longest period in the five years preceding death. |
| Gift (Inter Vivos) | The rules of the CC. AA. where the property is located (for real estate) or where the recipient resides (for movable assets). |
Impact: This is the most crucial aspect of non-resident tax planning. In regions like Madrid, Andalusia, Murcia, or Valencia, this right often means the difference between paying high State rates (up to 34% or more) and paying zero or a negligible amount for close family members (Groups I & II).
⚖️ Tax Calculation and Kinship Groups
The tax due is calculated based on the acquisition’s net value, the relationship between the parties, and the recipient’s pre-existing wealth.
Key Kinship Groups (Determining Reductions)
| Group | Relationship | Typical Status under Regional Law |
| Group I | Descendants and adopted children under 21 years old. | Highest Relief (often 99-100% deduction/reduction). |
| Group II | Descendants 21+, spouses, ascendants, and adopters. | High Relief (often 99-100% deduction/reduction). |
| Group III | Collaterals (siblings, nephews/nieces, uncles/aunts). | Moderate Relief (significant reductions less than 99%). |
| Group IV | Others and Non-Relatives. | Minimal Relief (generally subject to State rates and high multipliers). |
Double Taxation Relief
Spain has signed a limited number of Double Taxation Agreements (DTAs) specifically for Inheritance Tax (currently only with France, Greece, and Sweden).
If your country does not have an ISD-specific DTA with Spain, the possibility of being taxed twice exists. Relief for non-residents depends on the rules of their country of residence (e.g., the US or UK may grant a credit for tax paid in Spain).
