Foreigners who inherit assets in Spain can apply tax exemptions available to Spanish residents. This means foreigners pay less Spanish inheritance tax than before.

Both state and regional governments set Spanish inheritance tax rates. The regional governments have used their powers to bring down tax rates through reductions and exemptions. As a result Spanish inheritance tax is generally much lower under the regional rules than under the national rules. Before 2014 only residents could benefit from the regional government rules. Non residents had to apply the punitive state rules.

The law changed in 2014 to allow all EU residents to apply the more favourable regional government rules. This was due to a ruling of the ECJ that the rules breached the principle of free movement of capital ( ECJ Judgment of 3rd September 2014, case 127/12). The Spanish government therefore changed the law to allow all EU residents to benefit. The law changed again in 2018 due to a decision of Spain´s Supreme Court. The judges held that residents of countries outside the EU were also entitled to apply the regional government inheritance tax rules. ( Supreme Court Judgment 242/2018, of 19th February). The current position is that foreign beneficiaries of Spanish estates can benefit from the savings that are available under the regional government rules.