How does inheritance affect your Spanish income tax declaration - Costaluz Lawyers

If you have received an inheritance in the last fiscal year, you may be wondering how it affects your annual Spanish income tax declaration. In this blog post, we look at the different aspects of inheritance in terms of wealth and assets and discuss whether they should form part of your personal income tax declaration.

Find out about inheritance tax and laws in Spain

If I earn income from my inheritance, should I include this in my Spanish income tax declaration?

The answer to this question is usually yes, although it depends to some extent on the type of asset and what you do with it.

Inheriting property

If your inheritance includes property and you decide to let or sell it, you should declare it as follows:

Earnings from letting – the money you earn from the rental forms part of your annual income and should therefore be included on the income tax form in the letting section.

Earnings from selling – if the sale of the property earns you a profit (capital gains), you must declare this as part of your annual income and include it in the income tax form.

Inheriting cash

If you received an amount in cash from your inheritance, you must declare this when you file your inheritance tax. Once you have done so, there is no need to declare it again on your income tax form.

In a nutshell – if the asset generates income or gains for you and was not already included in your inheritance tax declaration, you must declare it on your annual income tax form.

Read about tax representation in Spain

Should I declare my inheritance in my annual income tax form?

Generally, the answer is no because you have already declared it when you filed your inheritance tax return. The amount of inheritance tax you pay depends on the amount you inherit, your relationship with the deceased, their place of residence and where you live.

Do I need professional help with declaring inheritance and income tax?

Both are complex subjects and even more so if you don’t speak fluent Spanish. In addition, it’s all too easy to omit essential details on a tax form if you don’t know exactly what you’re doing. And as result, you could end up with a fine for failing to declare everything or paying tax that wasn’t necessary.

To avoid both scenarios, we always recommend that you take expert professional advice to save you time and stress and probably money!

The Costaluz Lawyers team includes experienced professionals with a long track record in inheritance law and Spanish tax matters. Get in touch with them now to find out how they can help you.

Maria Luisa Castro

Director and Founder
María founded CostaLuz Lawyers in 2006 and is the Firm’s Director. María is registered Lawyer number 2745 of the Cadiz Bar Association and is licensed to practice in all areas of law throughout Spain. Working closely with her team, María has developed the firm into one of the most highly regarded and trusted Spanish Law Firms acting for English-speaking clients with legal problems in Spain. We’re here to help. Contact us today for a free no-obligation consultation.
 

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