Pierre Dubois, a French national, spent the last eleven years of his life in Jávea. When he died he had three accounts: 60,000 € at a branch in Jávea, 120,000 € at a bank in Lyon and the equivalent of 200,000 € in Swiss francs in Geneva. Eight months before his death he had withdrawn 30,000 € in cash from the Spanish account. His heirs, in equal shares, are his son Julien, who lives in Jávea, and his daughter Claire, who lives in Brussels. Each bank asks for different papers and each sibling thinks they declare "their bit" in their own country. The Spanish answer depends on where each of them lives and where each account is.
What goes into each heir's Modelo 650
In the Spanish inheritance and gift tax (Impuesto sobre Sucesiones y Donaciones, ISD), each heir files their own self-assessment, on Modelo 650, for what they acquire. What it includes depends on their residence:
- Heir resident in Spain (Julien): personal liability, article 6 of Law 29/1987. He declares his share of all the accounts, whatever country they are in.
- Non-resident heir (Claire): limited liability, article 7. She declares only her share of what is located in Spain. An account at a Spanish bank is an asset located in Spain; those in Lyon and Geneva are not.
The deceased's residence decides who manages the tax and which rules apply. Pierre lived in the Comunitat Valenciana, so Julien files with the Generalitat (the regional government) under its rules. Claire files with the State's Agencia Tributaria (the Spanish tax agency), with the right to apply the Valencian rules (second additional provision, section One.1.b). More detail in which autonomous community applies.
How each account is valued
The value is the balance at the date of death, with interest accrued up to that day. For each account the bank is asked for a certificate of the balance on that date.
- Accounts in another currency: converted at the exchange rate on the day of accrual. The Swiss francs in Geneva are valued in euros at the rate on the date of death, not on the day they are collected.
- Accounts with joint holders: only the deceased's share goes in. The son appearing as a joint holder "just in case" does not mean that half is his; what matters is who contributed the funds.
- Recent withdrawals: this is where Pierre's cash comes in.
Article 11.1.a) of Law 29/1987 presumes that assets that belonged to the deceased up to one year before death form part of the estate, unless there is reliable proof that they were transferred and are held by someone other than an heir, legatee, relative within the third degree or the spouse of any of them. The 30,000 € withdrawn eight months earlier is added to the estate unless what it was used for is shown (paying for a care home, building work, debts). Without that proof, it counts as if it were in the Spanish account.
Julien's and Claire's figures
With the State scale and reduction (group II), without regional benefits, which would change the amounts of tax:
| Item | Julien (resident) | Claire (non-resident) |
|---|---|---|
| Jávea account plus presumed withdrawal (90,000 €) | 45,000 € | 45,000 € |
| Lyon account (120,000 €) | 60,000 € | Not taxed in Spain |
| Geneva account (200,000 €) | 100,000 € | Not taxed in Spain |
| Taxable base | 205,000 € | 45,000 € |
| Net taxable base (−15,956.87 €) | 189,043.13 € | 29,043.13 € |
| Tax (State scale) | 29,312.51 € | 2,554.89 € |
For Julien one step remains: the deduction for international double taxation in article 23.
- Effective average rate: 29,312.51 / 189,043.13 = 15.51 %.
- Suppose the French adviser certifies that Julien paid 6,000 € in France on his share of the Lyon account.
- Limit: 15.51 % × 60,000 € = 9,306 €. Only the part taxed abroad counts; if the Geneva account did not bear any similar tax, it does not enter the limit.
- Deduction: the lower, 6,000 €. Julien's final tax: 23,312.51 €.
Claire has no deduction in Spain because she is taxed under limited liability. If Belgium or France taxes her on the foreign accounts, how she avoids double taxation there is confirmed by her adviser in that country; we give no opinion on foreign law.
The presumption in article 11 is one of the most frequent causes of supplementary assessments. The authorities see the balance a year before and the balance on the day of death; if the difference does not show up anywhere, they add it. If there were real expenses (care home, carers, building work), the invoices must be gathered before filing, not after the letter arrives.
What each bank asks for to release the money
The Spanish bank cannot hand the balance over to the heirs unless payment of the tax or an exemption is proven (article 32.4 of Law 29/1987). It usually asks for: the death certificate, the certificate of last wills, the will or declaration of heirs, the deed of acceptance or division document, the heirs' NIE (the Spanish tax identification number for foreigners) and proof of the self-assessments. If they need the money to pay the tax, article 89 of the Regulations allows a partial self-assessment to release those funds.
Foreign banks apply their own rules: local succession certificates, the European Certificate of Succession in the case of France, or specific requirements in Switzerland. They are handled by the adviser the family appoints in each country; we provide the Spanish documents, such as the deed and the self-assessments.
Obligations that follow
- Julien's Modelo 720. If he keeps the Lyon and Geneva accounts, his share adds up to 160,000 € in the accounts block (code C) of this return of assets held abroad: it exceeds 50,000 € and he must declare them the following year. The answer on Modelo 720 for joint accounts abroad deals with joint holders.
- Julien's income tax (IRPF). The interest on those accounts is taxed in his income tax as a resident.
- Claire. If she leaves her share in the Spanish account, the interest creates obligations for her as a non-resident.
- Pierre's income tax for the year of death. Where applicable, the heirs file the deceased's return for the year of death.
Recommended order of work
- Certificates of the balance at the date of death from all three banks.
- Transactions over the last year on all the accounts, to anticipate the presumption in article 11.
- Each heir's residence on that date.
- A partial self-assessment if cash is needed in Spain.
- Each heir's Modelo 650, with its own scope of assets.
- Coordination with the advisers in each country to release the foreign accounts.
If your inheritance has accounts in several countries, send us the list of banks, approximate balances and residences through the inheritance form. We prepare the Spanish side and coordinate with the professionals you appoint abroad.
Julien and Claire found no evidence of what the 30,000 € had been used for and included it in the estate, as in the calculation above. The Jávea bank released the account with the two self-assessments.
The logic of residences and locations that applies here is the same as the one we develop in I am inheriting assets located abroad and at Salama Tax for inheritance and gifts.