Moving to Spain gives you more than just a better lifestyle — it offers a fresh perspective on what really matters.
For many expats, that means not only enjoying their wealth today, but ensuring it’s passed on efficiently to loved ones tomorrow.
Can I Pass On My Investments Tax-Efficiently in Spain?
By Matthew Green
This article is published on: 18th October 2025
But here’s the catch: Spain’s inheritance and gift tax system works very differently from what most expats are used to in their home countries. And without the right planning, your family could end up facing an unnecessary and unexpected tax bill.
Understanding How Inheritance Works in Spain
In Spain, inheritance tax (Impuesto sobre Sucesiones y Donaciones) is paid by the beneficiary, not the estate.
That’s often the first surprise for newcomers — it’s your spouse, children, or other heirs who pay the tax, rather than your estate before distribution.
The amount payable depends on:
- The relationship between the deceased and the beneficiary (spouses and children generally receive the biggest allowances)
- The value of the inheritance
- The region of Spain you live in — because each autonomous community (like Valencia or Madrid) sets its own allowances and reductions
For example, Madrid currently offers one of the most generous regional allowances, with reductions of up to 99% for close family members. Valencia, on the other hand, provides smaller deductions — which can make a significant difference to your family’s eventual tax exposure.
Structuring Your Investments Can Make a Big Difference
The way you hold your assets determines how smoothly — and efficiently — they can be passed on. Investments in a Spanish tax-compliant bond can offer a number of key advantages when planning for succession:
- You retain full control of your investment during your lifetime
- You can name multiple beneficiaries, who inherit directly without the need for probate delays
- The bond’s structure allows for efficient transfer of value — avoiding the administrative complexity that often comes with overseas holdings
- Beneficiaries may receive significant tax advantages, depending on your region of residence
In short, compliant structures help your heirs inherit assets that are clean, locally compliant and immediately accessible, without triggering unnecessary tax consequences.
Avoiding Common Pitfalls
Many expats unintentionally make things more complicated by:
- Holding UK ISAs, investment accounts, or offshore funds that aren’t recognised under Spanish law
- Keeping property or assets in personal names rather than through efficient vehicles
- Failing to review beneficiary nominations after moving to Spain
These issues can create double taxation risks, delays or even cause assets to fall outside your heirs’ allowances. A simple review of your portfolio through the lens of Spanish succession law can often fix these risks before they become costly.
Peace of Mind for You and Your Family
Effective planning is about more than saving tax — it’s about clarity and peace of mind. Knowing that your wealth will transfer smoothly and efficiently to the people you care about is one of the greatest gifts you can leave behind.
Whether your goal is to ensure your spouse is financially secure, or to pass on assets to your children in the most tax-efficient way possible, a little forward planning today can make all the difference tomorrow.
Final Thought
If you’ve chosen to make Spain your long-term home, your financial plan should reflect that. Local advice can help you align your investments, pensions, and estate planning with Spanish law — so your wealth stays protected across generations.
If you’re an expat living in Valencia, Madrid, or elsewhere in Spain, and you’d like to understand how to structure your assets for efficient inheritance and succession, I can help.
We’ll review your existing arrangements and identify ways to reduce potential inheritance tax exposure, simplify the transfer of assets, and ensure your loved ones are properly protected.
Get in touch for a no-obligation consultation to discuss your personal situation and learn how to build a clear, tax-efficient legacy plan for your family.