Cross-border · Tax · Information, not legal advice — as at 19 June 2026
Inheritance tax when you inherit in Spain, Portugal, France or Italy — and what you may owe back home
When you inherit property or assets in Spain, Portugal, France or Italy, two completely separate questions decide what happens — and confusing them is the costliest mistake families make. First, succession law decides WHO inherits (set by where the deceased was habitually resident, under Brussels IV, unless their will chose their national law). Second, tax decides what is owed — under entirely different rules that often point at a different country. The four countries tax very differently (Portugal is the gentlest; Spain, Italy and France all tax, with big differences), and on top of that your home country — most often the UK — may tax the estate too. We handle the legal side and, in all four countries, the succession tax that goes with it — computed, prepared and filed. Your home-country tax is not ours, and we say early where an adviser there is needed.
Law and tax are two different questions
When someone with assets abroad dies, people ask one big question — “what happens to the estate?” — but the law splits it in two, and they can point at different countries:
- Who inherits? (succession law.) Governed by the EU Succession Regulation (Brussels IV): by default, the law of the country where the deceased was habitually resident, unless their will elected the law of their nationality. It decides the heirs and their shares — including any forced-heirship reserved for children.
- Who pays tax, and how much? (tax law.) Not decided by Brussels IV at all. Each country taxes under its own rules — and the country that taxes is frequently not the country whose law decides who inherits.
A quick illustration: a British couple who made their home in Portugal. The law answer is Portuguese (so Portuguese forced heirship can bite) unless their wills elected English law — while the tax answer may point at the UK. Two countries, two questions, two different results.
How the four countries tax an inheritance
(General orientation only — rates change and vary by region and circumstance, and are confirmed per matter.)
- Portugal — the gentlest. Classic inheritance tax was abolished in 2004. What remains is stamp duty (Imposto do Selo), and spouses, children, grandchildren, parents and grandparents are exempt — so for most close families, no inheritance tax is due (the small extra charge on real estate belongs to lifetime gifts, not inheritances — and a declaration is still filed by the end of the third month).
- Spain — taxed, and it varies by region. Spain does tax inheritances (Impuesto sobre Sucesiones y Donaciones), with no automatic spouse exemption. Rates run roughly 7.65%–34% before relief — but reliefs vary sharply by autonomous community: Madrid and Andalucía effectively exempt close family (~99% relief) while other regions charge more. Non-residents may now apply the relevant region’s rules (Ley 11/2021). So where in Spain the estate sits makes a real difference.
- Italy — comparatively light, but real. Inheritance tax (imposta di successione) is 4% above a €1,000,000 allowance per beneficiary for a spouse and children; 6% for siblings (€100,000 allowance); 8% for the unrelated. The declaration is due within 12 months and the tax is self-assessed.
- France — the heaviest, and tightly tiered. Spouses and PACS partners are exempt; children get a €100,000 allowance each, then a 5%–45% scale; distant or unrelated beneficiaries can face up to 60%. France also has particular rules for life-assurance (assurance-vie) and trusts.
The actual numbers, country by country: Portugal · Spain · Italy · France.
And then there’s home
Even where the local tax is modest, your home country may still tax the estate — and the two can both apply at once, because they use different tests:
- UK. Inheritance tax now turns on whether the person was a UK “long-term resident” — broadly, UK tax-resident for at least 10 of the previous 20 tax years (this replaced the old domicile basis on 6 April 2025). A long-term resident is taxed on their worldwide estate; others, generally, only on UK-situated assets. Note this is a different test from habitual residence for Brussels IV — someone can be habitually resident in Portugal (so Portuguese succession law applies) yet still a UK long-term resident in the UK tax net. (UK pensions also enter the IHT net from April 2027.)
- US citizens are taxed on their worldwide estate wherever they live — a US national retired in Europe has a US filing position regardless of the local tax, and needs US-qualified advice.
- German and several other EU heirs can trigger tax based on the residence of the deceased or the heir — so a beneficiary’s own country can tax a foreign estate.
Double-tax treaties and unilateral reliefs can sometimes credit tax paid in one country against the other — but coverage is patchy and country-specific, so it must be checked deliberately. It doesn’t sort itself out.
Why the confusion is costly
- People assume choosing English law in their will fixes the tax — it doesn’t; Brussels IV governs succession, not tax.
- People assume that because Portugal exempts close family, there’s no tax anywhere — there may still be UK (or US, or other home-country) tax.
- People plan the succession carefully and forget the tax, or vice versa — and the two can pull in opposite directions. Planning in advance (the right will, the right structure) reduces exposure far more effectively than anything done after a death.
How we keep them apart — and where our work stops
Our work is the legal side — who inherits, under which law, and how the estate transfers — and, in all four of our countries, the succession tax that goes with it: we compute the tax, prepare the return and file it as part of the work. Your home-country tax is not ours. There, what we do is tell you plainly where the tax question lives, flag exactly when an adviser at home needs to be brought in, and brief them precisely, so nothing falls between the legal and tax sides. For close family inheriting in Portugal, the only real tax question is often the home-country one; elsewhere it needs looking at deliberately, early, with the specific countries and nationality considered together.
The short version
Two separate questions: which country’s law decides who inherits (Brussels IV — habitual residence, or your chosen national law), and which country taxes it (different rules entirely). Portugal is gentle on close family; Spain, Italy and France all tax, with big regional and relationship differences; and the UK or US may tax on top. The only way to know is to look at the specific countries and nationality together, early. We do the legal side and, in our four countries, the succession tax that goes with it — computed, prepared and filed. The home-country tax we put to the right adviser, clearly framed and early.
What is a UK “long-term resident”? In rough terms, from 6 April 2025 the UK swapped the old domicile test for a residence one: a person is a long-term resident for inheritance tax if they have been UK-resident for tax in at least 10 of the previous 20 tax years. Long-term residents are within UK inheritance tax on their worldwide estate; others, generally, only on UK-situated assets. This is a plain-language guide, not tax advice — the precise test and transitional rules depend on your circumstances and are a question for a tax adviser.