Spanish Inheritance Tax and Form 650
Last updated: May 2026
We handle estates and Form 650 across Spain. We review reductions, allowances, municipal capital gains tax and non-resident cases.
Key Information for Estate Settlement
Residents in Spain who receive assets through inheritance or legacy are obliged to file the Inheritance and Gift Tax (Model 650), applying the regulations of the Autonomous Community corresponding to the deceased's habitual residence.
Who Pays Inheritance Tax and Where is it Settled?
Those obliged to pay and file the tax are the heirs (who succeed universally) and legatees (who receive specific assets) who acquire assets and rights due to death or hereditary succession.
The applicable regulations (tax rates, reductions, allowances) are, as a general rule, those of the Autonomous Community where the deceased person had their habitual residence at the time of death. For non-residents, special rules apply, which you can consult in our specific section.
Key Deadlines for Settling Inheritance Tax (Model 650)
- The general deadline for filing and paying Model 650 is 6 months, counted from the date of the deceased's death.
- This period is extendable by another 6 additional months, provided the extension request is submitted within the first 5 months of the initial period.
- It is crucial to meet these deadlines for the settlement of the inheritance, as failure to file or late filing can lead to surcharges, late payment interest, and possible penalties from the Tax Agency.
Essential Documents for Processing an Inheritance and Inheritance Tax
The documentation required to process an inheritance may vary slightly depending on the Autonomous Community, but generally the following is required (original or certified copy):
- Literal Death Certificate of the deceased.
- Certificate from the General Registry of Last Will Acts (indicates if the deceased made a will and before which notary).
- Authorized copy of the last valid will (if it exists) or, failing that, the Declaration of Heirs Ab Intestato (if there is no will or the existing one is null).
- Identification documents (DNI/NIE) of the deceased and all heirs and legatees.
- Detailed inventory and valuation of the assets and rights composing the inheritance (property deeds, bank certificates of balances and positions at the date of death, vehicle documentation, life insurance policies with beneficiary designation, etc.).
- Proof of deductible debts of the deceased and deductible expenses of the inheritance (e.g., burial and funeral expenses, last illness expenses).
- Deed of manifestation, acceptance, and adjudication of inheritance (if granted before a notary, it is the document where heirs formally accept the inheritance and distribute the assets).
Importance of Regulatory Compliance!
Correctly and timely filing of Inheritance Tax is crucial not only to avoid penalties but also to be able to register inherited assets (real estate, vehicles) in the names of the new owners in the corresponding registries (Property Registry, Traffic, etc.).
Inheritance Tax Reductions and Allowances by Autonomous Community
State regulations for Inheritance Tax establish basic reductions, but Autonomous Communities (ACs) have extensive powers to significantly improve them or introduce important allowances on the tax liability. It is crucial to know the specific regulations of the applicable AC to correctly apply the available reductions and allowances.
By Kinship
There are very significant state and regional reductions depending on the degree of kinship with the deceased (Groups I and II: direct descendants, direct ascendants, spouse). Many ACs also apply significant allowances on the tax liability for these groups, in some cases reaching 99% or even 100%.
For Acquisition of Primary Residence
Reduction in the taxable base for the acquisition of the deceased's primary residence (generally 95%, with maximum limits varying by AC), if the heirs are spouse, ascendants, or descendants (or collaterals over 65 who lived with the deceased) and meet maintenance requirements for a specified period.
For Family Business or Professional Practice
Reduction of up to 95% (or more depending on AC) in the value of shares in entities or individual family businesses, if strict requirements for maintaining the activity and shares by the heirs are met.
For Heir's Disability
Additional reductions for heirs with a recognized degree of physical, mental, or sensory disability, the amount of which varies according to the degree of disability and AC regulations.
For Life Insurance Proceeds
Reduction of 100% with a state limit of €9,195.49 on amounts received from life insurance contracts, when the beneficiary is the spouse, ascendant or descendant of the deceased policyholder. Some Autonomous Communities improve this limit or apply specific rules, so the regional regulations applicable to each case should be checked.
For Historical Heritage Assets
Applicable reduction (generally 95%) for the acquisition of assets listed in the General Inventory of Spanish Historical Heritage or equivalent AC registries, under certain conservation and maintenance conditions.
Highlighted Inheritance Allowances in the Community of Madrid
The Community of Madrid is one of the ACs with the greatest tax benefits in Inheritance Tax for direct relatives:
- 99% allowance on the tax liability for acquisitions by descendants (children, grandchildren...), spouse, and ascendants (parents, grandparents) - Kinship Groups I and II.
- 50% allowance on the liability for acquisitions between siblings, uncles/aunts and nephews/nieces (collaterals of the 2nd and 3rd degree by consanguinity and affinity) — Group III. Applicable from 1 July 2025 under Madrid Region Law 2/2025, subject to the legal requirements being met and to the regulations in force on the accrual date of the tax.
This may significantly reduce the tax burden for close relatives in Madrid, and reduced by half for siblings, uncles/aunts and nephews/nieces (by consanguinity and affinity) from July 2025.
Each case should be reviewed individually, especially when the estate includes property, non-resident heirs, life insurance policies or multiple heirs with different degrees of kinship.
Estimate Your Inheritance Tax Easily
Need to calculate an estimate of the tax on an inheritance? Access our online tax calculator for Inheritance and Gifts, which considers the regulations of all ACs and specific rules for non-residents.
Access IGT CalculatorInheritance cases we handle regularly
If your situation looks similar to any of these, we can help. If not, we will tell you straight away.
Estates with real estate — homes, premises, plots in different autonomous communities.
Intestate estates — declaration of heirs (abintestato).
Time-barred estates — old deaths still unsettled.
Estates with non-residents — heirs or deceased abroad.
Estates with several heirs — co-heirs in different regions.
Life insurance — policy beneficiaries with separate taxation.
Family home of the deceased — applying the 95% reduction.
Plusvalía municipal (Spanish municipal capital gains tax) — coordination with the corresponding city council.
Forms 650 and 660 — self-assessment and recapitulative return.
Subsequent registration — Land Registry and other registries.
Our process
1. We review the documentation
2. We compute the tax and allowances
3. We coordinate with the notary if needed
4. We file Form 650 and municipal tax
5. We help with the Land Registry
How we work with you
Direct service from a real adviser — no chatbots, no anonymous queues.
Documentation review first — before quoting we tell you whether the case is viable.
Coordination with notaries and the Land Registry — we handle the touchpoints when needed.
Cross-border cases and complex estates — bilingual experience, multiple regions, EU case-law.
Note: Inheritance Tax + Plusvalía municipal (municipal capital gains tax)
For estates with real estate, in addition to Form 650 there may be a plusvalía municipal (Spanish municipal capital gains tax on the increase in the value of urban land). It is a local tax charged separately by the city council where each property is located, with its own deadlines, taxpayers and allowances. At GESTISYD we also review the plusvalía municipal and coordinate its filing when you engage us for the full estate administration.
Frequently Asked Questions (FAQ) about Inheritance and Estates in Spain
1. What is Inheritance Tax?
The Inheritance and Gift Tax (IGT) is a direct and subjective tax levied on wealth increases obtained by individuals free of charge. The Inheritance modality applies to acquisitions of assets and rights due to death (inheritances, legacies, and other succession titles).
2. Who is liable to pay Inheritance Tax (taxpayers)?
Those liable for payment of the tax as acquirers (taxpayers) are:
- In "mortis causa" acquisitions (due to death), the heirs, legatees, and those who acquire assets by any other succession title.
- The beneficiaries of life insurance contracts, when the policyholder is a person other than the beneficiary, except for the exceptions in IRPF (Personal Income Tax) regulations.
3. When does Inheritance Tax become due (obligation to pay arises)?
The tax becomes due (i.e., the obligation to pay it arises) on the day of the deceased's death (the person leaving the inheritance) or when the declaration of death becomes final. The deadlines for its settlement and payment begin from this date.
4. What is the deadline for filing Inheritance Tax?
The general deadline for filing the self-assessment or declaration of Inheritance Tax (Model 650) is 6 months, counted from the day of the deceased's death or from when the declaration of death becomes final.
5. What happens if I do not file Inheritance Tax on time?
Failure to file the tax on time can have several negative consequences:
- Surcharges for late filing (no prior request): Following the reform of Spanish Law 11/2021, a surcharge of 1% plus an additional 1% per full month of delay applies, up to 12 months. After 12 months, the surcharge rises to 15% of the tax due, plus the corresponding late-payment interest from that point onwards.
- Late payment interest.
- Tax penalties.
- Inability to dispose of assets.
6. How is the taxable base for Inheritance Tax calculated?
The taxable base is calculated starting from the real value of the assets and rights composing the inheritance, adding addable assets, and subtracting deductible charges, debts, and expenses.
What is the household goods presumption ("ajuar doméstico") and how is it valued?
Spanish inheritance tax includes a presumption that the deceased's household goods ("ajuar doméstico") are worth a percentage of the estate. The general rule presumes 3% of the computable estate, but following Spanish Supreme Court case-law from 2020, this percentage does NOT apply to the entire estate: it only covers assets actually used for personal/domestic purposes (mainly the principal and secondary residences). Bank balances, investment funds, shares, receivables and other assets not subject to domestic use must be excluded from the calculation. The taxpayer can rebut this presumption with evidence. We review this case by case, especially when the estate includes property and significant financial assets.
7. Does Inheritance Tax vary between Autonomous Communities?
Yes, significantly. Autonomous Communities have broad regulatory powers.
See more frequently asked questions (3 more)
Can an extension be requested for filing Inheritance Tax?
Yes. Taxpayers can request an extension of the filing period for an additional 6 months. This request must be made within the first 5 months of the initial filing period (i.e., before the end of the fifth month from death). Granting the extension entails the accrual of late payment interest corresponding to the extension period but does not prevent the application of surcharges if the filing is made after the granted extension has ended.
What form is used to settle Inheritance Tax?
The main form for the self-assessment of Inheritance Tax is Model 650.
Is professional advice recommended for inheritance and IGT?
Yes, absolutely. Given the complexity, having expert advisors is highly recommended. You can contact us for a personalized study.
Different case?
At GESTISYD we also handle:
Is your case unusual? Contact our advisers and we will tell you whether we can help.
Expert Advice on Inheritance and Inheritance Tax
At GESTISYD, we offer expert advice and handle the entire processing of Inheritance Tax (Model 650) and comprehensive estate management. Contact us for a review of the available tax benefits and hassle-free processing.
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