Double Taxation on Inheritance in Spain: The Expat Guide

In brief: If you are an expat with assets in Spain and another country, your estate may be subject to inheritance or estate tax in both places. Spain has very few bilateral inheritance tax treaties, which means double taxation is a real risk for many expat families. Understanding how it works — and what can be done about it — is essential for any cross-border estate plan.

How Double Inheritance Taxation Happens

For most taxes, double taxation treaties prevent you from being taxed twice on the same income or asset. For inheritance and estate taxes, the situation is more complicated — and the protection is far weaker.

Two types of double taxation can affect expats in Spain:

Type 1: Residence-based taxation overlapping with source-based taxation Country A taxes heirs because they are resident there (taxing worldwide assets received). Country B taxes heirs because the assets are located there. The same asset is taxed twice — once in each country.

Example: A British expat lives in Spain and dies owning a UK investment portfolio and a Spanish apartment. Spain taxes the estate (as the country of habitual residence, taxing worldwide assets). The UK taxes the estate (as the country where the assets are located — and historically, where the domicile may still be for inheritance tax purposes). Both the Spanish apartment and the UK portfolio can end up in both tax nets.

Type 2: Nationality-based taxation The United States taxes the worldwide estates of US citizens regardless of where they live — making American expats in Spain potentially subject to both Spanish inheritance tax and US estate tax on the same assets.

Spain's Inheritance Tax Treaties: The Gap

Spain has inheritance tax treaties with very few countries. As of 2026, Spain has double taxation treaties specifically covering inheritance and estate taxes with:

France (1963 treaty)
Sweden (1963 treaty)
Greece (1919 treaty — largely obsolete in practice)

That is essentially it. Spain does not have inheritance tax treaties with:

The United Kingdom
Germany
The Netherlands
Belgium
The United States
Canada
Australia
Most of the world

For the vast majority of expats in Spain — British, German, Dutch, American, Australian — there is no bilateral inheritance tax treaty to prevent double taxation. Relief, where it exists, must come from unilateral mechanisms in each country's domestic law.

How Relief Is Available Without a Treaty

Spain's Unilateral Relief

Spain allows heirs to deduct inheritance tax paid abroad on the same assets, up to the amount of Spanish inheritance tax due on those assets. This is provided under Article 23 of Spain's Inheritance and Gift Tax Law (Ley 29/1987).

How it works: If a Spanish estate includes a UK property, and the UK charges inheritance tax on that property, the heir can deduct the UK tax paid from their Spanish inheritance tax bill (up to the Spanish tax amount on that property).

The limit: The deduction cannot exceed the Spanish tax payable on the same asset. If the UK tax exceeds the Spanish tax, the excess is not refunded. The heir pays the higher of the two, not the sum of both.

The requirement: The heir must document the foreign tax paid and submit it with the Spanish inheritance tax declaration. A receipt or certificate from the foreign tax authority is required.

UK Unilateral Relief

The UK offers unilateral double taxation relief for inheritance tax paid abroad on assets located outside the UK. Under UK IHT rules, if inheritance tax is paid in Spain on a Spanish property, this can be offset against UK IHT on the same property.

For British expats in Spain who die with assets in both countries, this means:

Spanish IHT on Spanish assets → can offset UK IHT on Spanish assets
Spanish IHT on UK assets (if Spain taxes worldwide) → the UK does not generally give credit for foreign IHT on UK-situated assets, so double taxation on UK assets held by a Spanish-resident is a real risk

German Unilateral Relief

Germany offers a credit for foreign inheritance tax paid, under Section 21 of the German Inheritance Tax Act (ErbStG). However, the credit is limited to the German tax on the same asset and only applies to assets located in the foreign country. The interaction between German and Spanish tax on a German national resident in Spain is complex and requires specialist advice.

The US Estate Tax Problem for American Expats

American expats in Spain face a particularly complex situation. The United States taxes the worldwide estates of all US citizens, regardless of where they live — unlike most countries, which base taxation on residence or asset location.

A US citizen who has lived in Spain for 20 years and becomes habitually resident there is still subject to US estate tax on their worldwide assets when they die. They are simultaneously subject to Spanish inheritance tax on their worldwide assets (as a Spanish resident). The same estate — Spanish property, US investment accounts, European stocks — is potentially in both tax nets.

The US-Spain tax treaty covers income taxes, not estate or inheritance taxes. There is no US-Spain estate tax treaty.

Relief is available through the US IRC §2014 foreign tax credit, which allows the estate to credit foreign estate or inheritance taxes paid against US estate tax. However:

The credit is complex to calculate and subject to limitations
It applies per country and per asset category
Professional US tax counsel is essential — this is not a DIY calculation

American expats in Spain should ensure their estate planning includes both a US attorney familiar with cross-border estates and a Spanish lawyer or notary. The interaction of the two systems is one of the most complex in international succession planning.

The France-Spain Treaty: What It Actually Provides

For French nationals or French residents with assets in Spain (or vice versa), the 1963 France-Spain inheritance tax treaty provides genuine relief.

Key provisions:

Real property (land and buildings) is taxed only in the country where it is located
Business assets are taxed where the business is established
Other assets (financial assets, personal property) are taxed in the country of the deceased's domicile

Practical effect for a French expat in Spain:

Spanish property → taxed only in Spain
French property → taxed only in France
French bank accounts → taxed only in France (country of domicile)
Spanish bank accounts → taxed in Spain (where located) and potentially France (domicile) — treaty allocation depends on interpretation

The treaty eliminates the most severe forms of double taxation for French-Spanish estates, but its application requires careful professional advice.

How the Choice of Law Affects Tax

One important distinction: choice of law under EU Regulation 650/2012 affects who inherits and in what proportions — it does not affect inheritance tax.

An expat in Spain who chooses English law to govern their succession still pays Spanish inheritance tax on their Spanish assets. Tax is governed by where you live and where assets are located, not by which succession law you choose.

This is a common misconception among expats who believe that choosing their home country's law "opts out" of Spanish tax. It does not.

Practical Steps to Manage Cross-Border Inheritance Tax

1. Map your assets by country Identify which assets are in Spain and which are elsewhere. This is the starting point for understanding your exposure.

2. Get advice in both countries A Spanish tax adviser or gestor can calculate the Spanish inheritance tax position. A tax professional in your home country can calculate the home-country position. Both are needed to understand the interaction.

3. Check whether a treaty applies If you are French or Swedish, a treaty applies and provides real relief. If you are British, German, Dutch, or American, you are relying on unilateral relief mechanisms — which are less certain and more complex.

4. Consider the structure of your estate In some circumstances, how assets are held — directly, through a company, through a trust — affects the tax treatment. Trusts, in particular, are problematic in Spanish succession law and can create unexpected tax outcomes. Always take advice before using trust structures for Spanish assets.

5. Document everything for your heirs Double taxation relief requires documentation — proof of foreign tax paid, asset valuations, official receipts. If your heirs do not know what you owned and where, they cannot make the claims that reduce their tax bill. Sucesio's asset inventory function addresses exactly this: a complete, documented picture of all assets, delivered to heirs at the right moment.

Frequently Asked Questions

Can I be taxed on the same Spanish property by both Spain and the UK? Potentially yes. Spain taxes the estate because the deceased was resident in Spain (on worldwide assets) or because the property is in Spain. The UK may tax the estate if the deceased was domiciled in the UK for IHT purposes, which can persist for years after moving abroad. Unilateral relief is available in both countries, but the relief may not eliminate all double taxation. Professional advice in both jurisdictions is essential.

Does paying Spanish inheritance tax mean I don't owe tax in my home country? Not automatically. You need to actively claim relief — in Spain, by deducting foreign tax paid under Article 23; in your home country, by claiming the credit or exemption under that country's domestic rules. The relief is not applied automatically.

I've lived in Spain for 15 years. Am I still UK domiciled for inheritance tax purposes? Possibly. UK inheritance tax uses the concept of "domicile," which is notoriously persistent. You are UK domiciled by origin until you acquire a new domicile of choice — which requires both physically living in another country and forming the intention to live there permanently. After 15 years, you may have acquired Spanish domicile of choice, but this is a facts-and-circumstances test. You may also be "deemed domicile" in the UK if you were UK domiciled for 15 of the last 20 years. A UK inheritance tax specialist can advise on your specific situation.

Does Spain tax my worldwide assets if I am resident here? Yes. A person habitually resident in Spain is subject to Spanish inheritance tax on their worldwide estate, not just their Spanish assets. This is the basis for potential double taxation with any other country that also taxes the same assets.

This article is for general informational purposes only and does not constitute legal or tax advice. Cross-border inheritance tax is highly complex and jurisdiction-specific. Always consult qualified tax advisers in each relevant country for your situation.