Manuel emigrated to Buenos Aires in 1987 and retired there, with an Argentine pension and a small Spanish Social Security pension for the years he paid contributions in Cádiz. He died in March 2026. He leaves two children: Lucía, who has lived in Valencia for fifteen years, and Javier, who stayed in Argentina. In Spain he had kept a flat in Cádiz, worth about 150,000 €, and an account holding 40,000 €. In Buenos Aires, his house, worth about 120,000 €. Lucía calls a notary's office in Valencia to get started and is asked something she cannot answer: where was her father resident?
The question is not a formality. It decides which administration manages the tax, which rules apply and which assets are taxed in Spain for each child.
When the deceased did not live in Spain, the State manages the tax
The ISD (Impuesto sobre Sucesiones y Donaciones, the Spanish inheritance and gift tax) is devolved to the regions (comunidades autónomas), but the devolution is organised according to the residence of the deceased. When the deceased lived in a region, that region manages the tax. When they lived outside Spain, there is no region to which the tax can be attributed and management falls to the State tax administration, to which the self-assessment is submitted on Modelo 650. The second additional provision of the ISD act regulates precisely the self-assessment of those who must meet their obligations before the State.
The State managing the tax does not mean that only State law applies. Following the judgment of the Court of Justice of the European Union of 3 September 2014 (case C-127/12), that same second additional provision recognises the right to apply regional rules in cases with an international element.
Which rules apply in this case
For inheritances where the deceased was not resident in Spain, the rule is as follows: the heirs are entitled to apply the rules of the region where the greatest value of the estate's assets and rights located in Spain is found. If there were no assets in Spain, each heir applies the rules of the region where they live.
For Manuel:
- Assets in Spain: flat in Cádiz, 150,000 €, and an account of 40,000 €.
- Where the greatest value is: the flat, in Andalucía. The account follows the whole.
- Applicable rules: those of Andalucía, for both children, even though Lucía lives in Valencia.
- Administration that manages the tax: the State, because the deceased did not live in Spain.
The regional reductions and allowances that may apply, and their amount, are checked in the Andalusian rules in force at the date of death. We do not anticipate them here because they change often and depend on each heir's relationship to the deceased and their existing wealth.
Which assets are taxed for each child
The residence that matters now is that of each heir. The law distinguishes two ways of being subject to the tax:
- Personal liability (article 6 of the act): someone who lives in Spain is taxed on everything they inherit, wherever it is.
- Territorial liability (article 7): someone who does not live in Spain is taxed only on what they inherit in assets located in Spain or rights to be exercised here.
Applied to Lucía and Javier, in equal shares:
| Asset | Value | Lucía (resident in Spain) | Javier (resident in Argentina) |
|---|---|---|---|
| Flat in Cádiz | 150,000 € | 75,000 € | 75,000 € |
| Account in Spain | 40,000 € | 20,000 € | 20,000 € |
| House in Buenos Aires | 120,000 € | 60,000 € | Not taxed in Spain |
| Total taxed in Spain | 155,000 € | 95,000 € |
Lucía includes her half of the Argentine house in her self-assessment. If Argentina, or one of its provinces, also taxes that inheritance, article 23 of the act allows someone taxed on a personal basis to deduct the lower of two amounts: what was paid abroad in a similar tax, or the result of applying the Spanish average effective rate to the part corresponding to assets located abroad. Whether anything is paid in Argentina, and how much, is a question of Argentine law, which the family's adviser there confirms.
The deadline for filing the self-assessment for an inheritance is six months from the death, extendable by another six if requested within the first five. In inheritances where the deceased lived abroad, the foreign death certificate, the certificate of last wills, the will and its legalisation or apostille use up a good part of that time. Requesting the extension in time is almost always prudent, and leaving it to the sixth month does not work.
The father's residence has to be proved
Everything above rests on Manuel not having lived in Spain. If in his last years he had spent long periods in Cádiz, the conclusion might be different: residence is determined under the IRPF (income tax) rules, as article 6.2 of the act states, and it can be disputed. It is advisable to gather evidence: an Argentine tax residence certificate, returns filed there, local registration, and the very fact that his Spanish pension was taxed as a non-resident's.
The other formalities around the estate
The estate of a pensioner who lived abroad brings with it other formalities that are not the inheritance tax itself, but which should be on the list:
| Formality | Before whom | Note |
|---|---|---|
| Notifying the death to the body managing the Spanish pension | Social Security | Monthly payments received after the death are usually reclaimed |
| Municipal plusvalía (the local tax on the increase in land value) on the Cádiz flat | Cádiz town hall | It has its own deadline and its own rules |
| Non-resident income tax for the last year | Agencia Tributaria | If the flat was empty, imputed income up to the date of death |
| Change of ownership of the account | Bank | It will require the filed self-assessment |
| If Javier later sells the flat | Agencia Tributaria | 3 % withholding by the buyer and a return declaring the gain |
The municipal plusvalía on inheritances has its own particular features, which we cover in plusvalía on inheritances and gifts, and the situation of someone who inherits a property while living abroad in I inherit a flat in Spain as a non-resident.
If you are in Lucía's position, the pensioners form lets you send us the date of death, the list of assets in Spain and abroad and where each heir lives; with that the real deadline and the applicable rules can be established.
When there is nothing in Spain
If Manuel had had no assets in Spain at all, Javier would not be taxed here on anything: he is non-resident and inherits no assets located in Spain. Lucía, on the other hand, would be, because she is taxed on a personal basis on everything she inherits. In that case, the regional rules applicable to Lucía would be those of the region where she lives, Valencia, and the State would still manage the tax. It is a good example of how the same inheritance can have very different consequences for two siblings.
Coordinating inheritances where the deceased was non-resident (the Spanish side, with the State as the managing administration, and communication with the family's adviser in the other country) is described at Salama Tax and, in more detail on which administration is competent, in the ISD competence table.