Did you know that thousands of inheritances are still refused in Spain every year? According to the latest available data published from notarial statistics, around 54,800 inheritance renunciations were recorded in 2024, a figure that keeps this reality at high levels.
There are many reasons why a person may decide to renounce an inheritance. The most common include the existence of debts in the estate that exceed the assets, the lack of liquidity to cover associated costs, or the need to pay the taxes arising from the succession.
In today’s article, we discuss the possibility of extending the filing deadline or deferring the payment of Inheritance Tax in an estate.
Filing and payment deadline for Inheritance Tax in an estate
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Inheritance Tax accrues on the date of death of the deceased, or when the declaration of death becomes final. From that moment, there is a six-month period to file the Inheritance Tax return with the corresponding regional tax authority.
This deadline is especially important. During those six months, the heirs must gather the necessary documentation, value the assets and rights included in the estate, and analyse whether they have sufficient liquidity to pay the tax.
Therefore, when the estate is complex or there is no immediate liquidity, it is advisable to assess in advance the possibility of requesting an extension, deferral or payment in instalments.
Possibility of extending or deferring Inheritance Tax
The six-month period to settle Inheritance Tax may be insufficient for the heirs. This may happen because there are disagreements between them, because the estate is complex, or because the heirs do not have enough liquidity to pay the tax.
In these cases, it is important to distinguish between the possibility of requesting an extension of the filing deadline and the possibility of deferring or paying the tax debt in instalments, as each option responds to a different need.
For all these cases, the regulations governing Inheritance Tax provide for the possibility of:
Extending the Inheritance Tax filing deadline
The heirs may request an extension of the Inheritance Tax filing deadline for a further six months.
The steps to request the extension are as follows:
- The application must be filed within the five months following the death.
- The death certificate and the details of all heirs must be provided. In addition, the reason for requesting the extension and the approximate value of the assets and rights forming part of the estate must be indicated. It is important to note that this value is only indicative and may differ when the final tax return is filed.
In these cases, the silence of the Tax Administration is considered positive. In other words, if one month has passed since the application was filed and the tax authority has not responded, the application is deemed to have been accepted.
If the tax authority rejects the application, the deadline for filing Inheritance Tax will be extended according to the number of days elapsed between the day following the filing of the application and the day on which the rejection is notified.
It should be noted that the extension increases the filing deadline, but it does not eliminate the obligation to file the tax return. Nor does it prevent, where applicable, the accrual of the interest that may be due under the applicable regulations.
Deferring or paying Inheritance Tax in instalments
In cases where the heirs cannot pay Inheritance Tax due to a lack of liquidity in the estate, for example because there are several properties but not enough cash, they may request a deferral or payment in instalments of the tax debt.
As a rule, the tax regulations provide for two main options:
- Payment deferral: this may be requested for up to one year in mortis causa acquisitions when the deceased’s assets do not include sufficient cash or easily realisable assets to pay the assessed tax liabilities. In these cases, the granting of the deferral entails the obligation to pay the corresponding late-payment interest.
- Payment in instalments: if the deferral is not sufficient, payment in instalments may be requested for a maximum of five annual payments, provided that the required conditions are met and, where applicable, sufficient guarantee is provided to cover the principal debt, late-payment interest and the additional percentage established by the regulations.
Before requesting a deferral or payment in instalments, it is particularly advisable to review:
- The composition of the estate.
- The liquidity available to pay the tax.
- The deadlines applicable in each case.
- The relevant regional regulations, since Inheritance Tax is assigned to Spain’s autonomous communities and its management may vary depending on the territory.
Suspension of Inheritance Tax filing deadlines
If, in relation to the estate, litigation or voluntary testamentary proceedings have been initiated, the Inheritance Tax filing deadlines will be interrupted until the day after the final resolution ending the judicial proceedings becomes final.
When the proceedings are initiated after the document or tax return has been filed within the deadline, the Administration will suspend the tax assessment until the final resolution becomes final.
If the proceedings are initiated after the filing deadline or the extension deadline has expired without the tax return having been filed, the Administration may require its filing. However, it may also suspend the tax assessment until a final resolution is issued, without prejudice to any penalties that may apply.
If the proceedings are initiated after the tax assessment has been issued, payment may be deferred in accordance with the applicable regulations.
How is Inheritance Tax declared?
Inheritance Tax is generally declared through Form 650, which relates to mortis causa acquisitions. These are acquisitions of assets and rights by inheritance, legacy or any other succession title.
Where applicable, amounts received from life insurance policies linked to the death must also be declared using this form.
In any case, the competent autonomous community and the filing channel available in each territory must be considered, as Inheritance Tax is assigned to Spain’s autonomous communities and its management may vary.
If you need to declare Inheritance Tax or request an extension, deferral, payment in instalments or suspension, it is advisable to rely on specialised tax advice. At LEIALTA, we analyse the situation of the estate, the applicable deadlines, the available liquidity and the necessary documentation to help you file the tax correctly, within the required deadline and in proper form.
