The asset being gifted, or passed on death, is property in Spain

To put it another way, Spanish inheritance tax is not payable if assets are outside Spain and the recipient is also not resident in Spain.

Husband and Wife and Spanish Inheritance Tax
There is no exemption to Spanish inheritance tax between a husband and wife where they are both resident in Spain. Where they are both resident in Spain and, for example, the husband dies, then the estate left to his wife is fully liable on the worldwide assets of the husband.

If the couple are living together unmarried, the tax due is even more. Anything over €15,956.87 is liable to Spanish inheritance tax on the death of their spouse or partner, assuming all assets pass to the spouse.

Gift or Inheritance Tax Rates 2002

Group 1: children, adopted children, grandchildren, spouses, parents, grandparents
Group 2: cousins, nieces, nephews, more distant relatives & descendants & ascendants
Group 3: all others including unmarried partners

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