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V3310-20 6 November 2020 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ISD · caudal relicto

Inheritance tax in Spain for Swedish residents governed by asset location under the Spain-Sweden treaty

A Spanish resident heir asks how to tax the assets of her Swedish resident brother. The DGT explains that the Spain-Sweden treaty must be applied to determine the location of assets and the taxing rights of each country.

The question raised

Taking into account the double taxation treaty and the fact that, currently, there is no tax in Sweden that levies mortis causa acquisitions, it is requested that the following issues regarding taxation in Spain be resolved:

The DGT's ruling

Real estate is taxed in the State where it is located. Current account balances are considered to be in Spain if the branch is Spanish, the IBAN indicates said branch, and essential services are primarily provided there. Holdings in investment funds are considered to be located in Spain if they are held in a securities account of a Spanish branch, unless they are registered directly with the management company. The taxpayer may opt for either the state regulations or those of the Autonomous Community where the greater value of the assets in Spain is located, but the option may not be changed once exercised.

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