New inheritance tax rules from today

Hi all,

As part of my commitment to keeping you informed about the legal and tax landscape for your assets in Spain, I am writing to share some significant updates that came into effect TODAY regarding Inheritance and Gift Tax in the Valencian Community.

These changes are designed to make the transfer of assets more efficient, but they also bring new administrative requirements that you should be aware of.

New Collateral Relief (Group III): Effective 1 June 2026, there is now a 25% tax reduction on the inheritance tax quota for "collateral" heirs, which includes siblings, nieces, and nephews. This is a welcome change for those planning to pass assets to extended family, and it is set to increase to 50% in June 2027.

Continued Stability for Direct Family (Groups I & II): The established 99% tax bonus for spouses, children, and parents remains firmly in place. While this keeps the tax burden negligible for direct heirs, it is critical to remember that this benefit is not automatic—it must be formally claimed via a timely tax return.

Why This Matters for Your "Two-Will" Strategy

While these tax savings are excellent news, they do not change the 6-month administrative deadline for filing the Spanish Inheritance Tax. A common misconception is that because the tax liability may be low (or almost non-existent), the deadline is less critical. This is not the case. The Spanish tax authorities (Agencia Tributaria) require a formal filing within six months of the date of death. Missing this window—even if the tax owed is minimal—can trigger surcharges, interest, and unnecessary administrative complications.

How We Can Help

Our goal at Thy Will Be Done is to ensure that your Spanish assets are protected from the "probate bottleneck" that arises if relying solely on a UK Will. You really do need a separate Spanish Will for your Spanish assets containing an EU succession 650/2012 clause declaring that the law of England and Wales, Scotland, Northern Ireland, the Isle of Man, or Jersey and Guernsey dictates the succession of your Spanish estate. Remember - there is no such thing as UK or British law.

If you would like to review your current estate plan in light of these new 2026 rules, or, if you simply want to ensure your existing Spanish Will is structured properly, please let me know.

We are here to provide the peace of mind that comes with knowing your affairs are in order and your heirs are fully protected.

Just give us a call on 865 756 058, Monday to Thursday 9-4 and Fridays 9-1 (except red days).

Kind regards

Paul