Oliver was British, lived in Oxford and had owned an apartment in Estepona since 2010. He died in March 2026. His heirs are his two children: Tom, who has lived in Madrid for six years and is tax resident in Spain, and Emma, who lives in London. Both wonder whether they have to file anything in Spain. The answer is that they both do, but for very different things and under different rules.
Whether Modelo 650, the Spanish inheritance tax return, has to be filed depends on three questions: who receives, where the deceased was resident and where the heir is resident. The tax may come out at zero, but the obligation to file almost never disappears.
Who is obliged to file
In inheritance tax, the Impuesto sobre Sucesiones, the taxpayer is each person who receives something on a death: heirs, legatees and beneficiaries of life insurance. Each one files their own self-assessment for what they receive. There is no return for the estate as a whole: if there are three children, there are three 650s, even if they are prepared together.
The obligation exists even if the tax comes out at zero. In most regions, the reductions and relief that bring the tax down to nothing have to be applied in the self-assessment, and to apply them you have to file it. Not filing because "nothing comes out" is one of the most widespread misunderstandings.
Where the deceased and the heir are resident: the four scenarios
| Deceased | Heir | What is taxed in Spain | Rules and administration |
|---|---|---|---|
| Resident in Spain | Resident in Spain | Everything they receive, wherever it is | Those of the deceased's region of residence, which manages the tax itself |
| Resident in Spain | Non-resident | Only the assets located in Spain | Those of the deceased's region of residence; managed by the Agencia Estatal, the state tax agency |
| Non-resident | Resident in Spain | Everything they receive, wherever it is | Those of the heir's region; managed by the Agencia Estatal |
| Non-resident | Non-resident | Only the assets located in Spain | Those of the region where the greatest value of those assets is located; managed by the Agencia Estatal |
The possibility for a non-resident to apply regional rules has existed since European case law obliged Spain to stop applying only the national rules to non-residents, and the law was adapted in 2014. Before that, a non-resident paid on the national scale and without regional relief; now they can apply that of the corresponding region. More detail in international inheritances and gifts.
Tom and Emma's case, step by step
- Oliver was not resident in Spain. He lived in Oxford. That puts the case in the two lower rows of the table, and management with the Agencia Estatal, not with a region.
- Tom is resident in Spain. He is taxed under unlimited liability: on everything he inherits, including his share of the house in Oxford and of the British accounts, not only on the apartment in Estepona. He applies the rules of the Comunidad de Madrid, where he lives.
- Emma is not resident. She is taxed under limited liability: only on her half of the apartment in Estepona, which is the only thing located in Spain. She applies the rules of Andalucía, because the asset is there.
- Both file their 650 with the Agencia Estatal within six months of the death: before the end of September 2026, or within the extension if they requested it in the first five months.
Tom also has an issue that Emma does not: the United Kingdom can also tax the inheritance with its own inheritance tax. Spanish law allows residents to deduct the tax paid abroad on the same assets, within the limits it sets, and it is worth calculating with the British papers in front of you.
If your inheritance has an international element and you are not sure which row of the table is yours, the inheritance and gift form asks you the questions needed to place you.
A list to check it
- Are you receiving something because of someone's death, whether an inheritance, a legacy or life insurance? Then you are a taxpayer.
- Was the deceased resident in Spain? Look at the region where they lived for most of the last five years: that is the one that governs.
- Were they resident abroad? Look at where you are resident. If in Spain, you are taxed on everything under your region's rules; if abroad, only on what is in Spain.
- Do you think it comes out at zero? File anyway, unless you have confirmed that your region does not require it in that situation.
- Is there life insurance? The beneficiary is taxed on it under inheritance tax, even though the money is not part of the estate.
- Is there a property? As well as the 650, there is the plusvalía municipal, the local tax on the increase in land value, payable to the town council, with its own deadline.
Someone who renounces an inheritance outright does not acquire it and is not taxed on it. But the renunciation has to be formalised, usually before a notary, and it is best done before any act implying acceptance, such as using the deceased's money. A renunciation in favour of a specific person is not a renunciation: for tax purposes it is an acceptance followed by a gift, and it is taxed twice.
Cases in which the answer is surprising
The inheritance nobody has accepted yet
The six-month deadline runs from the death, not from when the inheritance is accepted or the deed is signed. An inheritance still waiting to be accepted, because the heirs cannot agree, does not suspend the tax deadline. If there is disagreement, the extension is the tool for gaining time.
The heir who moves during the process
The heir's residence that counts is the one at the date of death, not when they file. If Tom had moved to London in June 2026, after his father's death, he would still be taxed as a resident on that inheritance.
Assets that are not anywhere
An account at a European digital bank, shares with an online broker or a cryptocurrency raise the question of where they are located. For Emma, as a non-resident, that decides whether they are taxed in Spain or not. It is resolved with the location rules of the law and, sometimes, with rulings of the Dirección General de Tributos (the Directorate General for Taxation, which issues binding rulings) that have to be reviewed case by case.
The legacy of a single item
Someone who receives a specific legacy, for example a car, some jewellery or a sum of money, also files their own 650 even though they are not an heir. The legatee is a taxpayer for what they receive, and it is often forgotten because the will names them in a line at the end. The same happens with someone who receives the usufruct of an asset, common for a surviving spouse: the usufruct has its own tax value, which depends on the age of the usufructuary, and it is also declared.
Earlier gifts from the same deceased
If the deceased had made you gifts in the preceding years, they may have to be added to what you inherit in order to calculate the tax, under the law's aggregation rules. It does not change whether you have to file, but it does change how much you pay, and it is a fact the heir knows and whoever prepares the 650 often does not.
The practical conclusion is simple: if someone in your family has died and you receive something, you most likely have to file a 650, even if you pay nothing. What has to be worked out is not whether to file, but where, under which rules and by what date.
What people ask us about the obligation to file Modelo 650
What if I file Modelo 650 without being obliged to?
Filing more than you have to is not an offence, but it is not free either: it binds you to what you reported and, if there is a mistake, it has to be corrected. With Modelo 650 the sensible thing is to check the obligation first, and not to file just in case. The thresholds on this page are there precisely for that.
Can I ask for more time?
Yes: an extension of another six months, but it has to be requested within the first five. After that point it is no longer possible, and it is one of the deadlines most often let slip.