The call usually comes about six weeks after a funeral. A client who has been living contentedly near Málaga for three years has just been told by a US custodian that they are the beneficiary of their father's IRA, that it holds $600,000, and that they need to open something called an inherited IRA and choose a distribution option. They ring us because of the word inherited. They assume this is an inheritance question, and they have already read that Andalucía has all but abolished inheritance tax for children. They are relaxed. They are almost certainly asking about the wrong tax.
This page is for Americans who are already Spanish tax residents, or about to become one, and who have inherited or expect to inherit a US traditional IRA or 401(k). It sits deliberately between two of our other pages and is not a repeat of either. Our guide to how US retirement income is taxed in Spain deals with your own retirement accounts, where you own the money and the only question is when you draw it. Our guide to inheritance and gift tax in Spain deals with the assets that pass to you at death and land inside the Spanish inheritance tax. An inherited IRA is the awkward object that belongs to neither category cleanly: it is not your account, and it may never enter the inheritance tax at all. If the inherited retirement account is a surviving spouse's Thrift Savings Plan rather than a private IRA, read the separate guide to TSP beneficiary participant accounts in Spain, because the TSP wrapper adds plan-specific rollover and second-death rules; and if you are a non-spouse who inherited a TSP, note that the plan forces a payout, so the money reads as savings for the visa rather than a pension. The same is true of a private 401(k) or 403(b) inherited by a non-spouse, where the employer's plan document usually forces the payout and a cash distribution carries mandatory withholding before it ever reaches an inherited IRA. A non-spouse inherited HSA is more abrupt still: the account stops being an HSA at death, so there is no ten-year inherited-account wrapper to manage.
On this page
The one asset death does not reset The ten-year clock, and the date that sets it Why 1 April matters more than the will Who you are changes the clock The Spanish question nobody asks: which tax? The Málaga relief that may not reach the account Two accounts, one death, two different worlds The credit that works — and what it does not fix Ten years, and a Spanish calendar with no split year What a consulate makes of a decaying account Modelo 720 and wealth tax Two dates, before anything else Frequently asked questions
"People arrive with the inheritance tax already worked out in their heads, because that is the tax with the reassuring name and the famous Andalusian discount. Then we look at the account and it may not be an inheritance question at all — it may be an income question, every year, at the rates a salary pays. Nobody made a mistake. They simply assumed the label on the envelope told them which tax was in it."
— Lola Jurado · Immigration lawyer, Ilustre Colegio de Abogados de Málaga (nº 10907)
The one asset death does not reset
Start with what death normally does, because the IRA's strangeness only shows up against the background of everything else.
Suppose your father dies holding two things: a taxable brokerage account worth $600,000, and an IRA worth $600,000. Identical money. Identical investments inside, even.
The brokerage account receives a fresh start twice over. In the United States, its basis is stepped up to the value at the date of death, so the forty years of gain your father accumulated simply evaporate for tax purposes — you could sell the whole thing the next morning and report almost nothing. In Spain, the same logic broadly follows: you acquire the assets at their value at death, and that value, together with the proportionate inheritance tax you paid, forms your acquisition cost. Spain then taxes only the growth after the death, in the savings base, at rates running from 19% to 30%. Death, in other words, is a clean line. Everything before it belongs to your father's tax life and is closed.
The IRA receives no fresh start at all, and the United States says so explicitly. An IRA is income in respect of a decedent — income your father earned the right to and never paid tax on — and the Internal Revenue Code expressly excludes such property from the step-up in basis that the brokerage account enjoys. There is no basis to step, because there was never any basis. Every dollar in that account is untaxed ordinary income waiting for a recipient, and death does not change its character. It only changes whose return it appears on.
Spain, as we will see, is likely to reach a structurally similar conclusion by a completely different route. And that is the thesis of this page. Two accounts, same money, same death. One of them gets forgiven its entire history in both countries. The other gets forgiven nothing in either, and is handed a deadline as well.
One thing the two accounts do share is the paperwork that moves them. Both are very likely to carry a named beneficiary, and in both cases that designation, not the will, decides who receives. On the IRA the designation is structural — it is how the account works, and everything on this page follows from it. On the taxable brokerage account it is optional, it is called a transfer on death registration, and it was signed for a quite different reason: to avoid US probate. That reason stops applying the day you move, because Spain has no probate to avoid — but the form keeps working, and Spanish inheritance tax addresses the person who receives. See TOD and POD accounts for Americans in Spain.
The ten-year clock, and the date that sets it
Now the deadline. Before 2020, an heir could stretch distributions from an inherited IRA across their own life expectancy — the "stretch IRA," a decades-long thin trickle of income. For most beneficiaries of owners who died after 2019, that is gone.
The rule that replaced it, in the IRS's own words, requires beneficiaries who are not taking life expectancy payments "to withdraw the entire balance of the IRA by December 31 of the year containing the 10th anniversary of the owner's death." If the owner died in 2025, the account must be empty by 31 December 2035. Whatever is left in it after that date is exposed to an excise tax on the amount that should have come out and did not.
For an American in America, ten years is a generous planning window. For an American in Spain, ten years is something else entirely: it is ten Spanish tax years, each with its own progressive scale, and a fixed quantity of ordinary income that must be pushed through them. The question stops being how much tax and becomes which years — and that is a question you can only answer if you have a choice about the years. Which brings us to the fact that decides whether you do.
Why 1 April matters more than the will
Everything now depends on a single characteristic of the person who died, and it is not their wealth, their nationality, their residence or anything written in their will. It is whether they died before or after their required beginning date.
The required beginning date is the moment American law stops letting a retiree leave their IRA alone. For an owner who reaches age 72 after 31 December 2022, it is 1 April of the year following the year in which they reach age 73. Before that date, the IRA is untouched and untouchable by the government. From that date, required minimum distributions begin.
Here is what that date does to you, the heir:
- If the owner died before their required beginning date, and the ten-year rule applies, IRS guidance is unambiguous: "no distribution is required for any year before the 10th year." Nothing has to come out in years one to nine. You may take nothing at all for nine years and everything in year ten, or take it in whatever shape suits you. You have ten years of complete freedom.
- If the owner died on or after their required beginning date, you must take annual required minimum distributions in the intervening years — calculated on the longer of your own single life expectancy or your father's — and the account must still be emptied by the end of year ten. Money comes out every year whether you want it or not, and it is Spanish general-base income every time.
Read those two paragraphs again with a Spanish tax return in mind. In the first case you own a lever: you can hold the account flat through a high-income Spanish year, or through the year of a property sale, or through the year you arrive; you can concentrate or spread; you can align the whole thing with the Spanish calendar. In the second case, you own nothing. Spain collects income tax from you every year for a decade on a schedule set in Washington.
And now the sharp edge. The IRS states it plainly: "If an IRA owner dies after reaching age 73, but before the IRA owner's required beginning date, no minimum distribution is required for that year because death occurred before the required beginning date." A man who turns 73 in June 2026 has a required beginning date of 1 April 2027. If he dies in February 2027, at 73, he died before his required beginning date, and his children get ten years of freedom. If he dies in May 2027, at the same age 73, in the same year, they do not.
Who you are changes the clock
The ten-year rule does not catch everyone. American law carves out a class of eligible designated beneficiaries who may still take life expectancy payments — the old thin trickle — instead of facing the cliff. In the IRS's formulation, a beneficiary is eligible if they are "the owner's surviving spouse, the owner's minor child, a disabled individual, a chronically ill individual, or any other individual who is not more than 10 years younger than the IRA owner."
Three observations for a Spanish resident, in ascending order of usefulness.
First, the last category is the sleeper, and almost nobody self-identifies with it. It says nothing about family. A brother, a sister, an unmarried partner, an old friend — anyone at all who is not more than ten years younger than the person who died is lifted out of the ten-year regime by arithmetic alone. If you are a 66-year-old inheriting from a 74-year-old sibling, you are not facing a ten-year cliff at all, and the entire shape of your Spanish exposure changes from a compressed decade into a long, low, manageable stream. Check the age gap before you accept anyone's ten-year timetable.
Second, the surviving spouse holds the strongest position by a distance. Where they are the sole designated beneficiary, they may elect to be treated as the owner of the IRA. That is not a scheduling concession; it converts them from an heir into an owner, and the whole of this page stops applying to them. Their situation is the one covered by our page on how US retirement income is taxed in Spain, which is a considerably better place to be.
Third, and this is where American planning collides with Spanish reality: if the estate or a non-qualifying trust is the beneficiary rather than a person, there is no designated beneficiary, and where the owner died before the required beginning date the harsher five-year rule applies instead — the whole account out within five years. Americans who put a trust in the beneficiary line for perfectly sound US reasons may have halved the window their Spanish-resident child had to work with. If there is a US living trust anywhere in this structure, the beneficiary designations need reading before anything else.
The Spanish question nobody asks: which tax?
Now cross the Atlantic, where the interesting problem is not how much but which tax.
Spain has two candidates and they do not overlap. The Impuesto sobre Sucesiones y Donaciones — inheritance tax — reaches assets acquired by inheritance, and a Spanish resident heir is liable on their worldwide inheritance, not merely on Spanish assets. IRPF — income tax — reaches worldwide income. Spanish law keeps them strictly apart: income subject to inheritance tax is not subject to income tax. One or the other, not both.
Instinct says inheritance tax. The account came from a dead man. It is called an inherited IRA. Spanish doctrine on pension money points firmly the other way.
The Spanish treatment of a domestic pension plan is settled and counter-intuitive: benefits from a pension plan, whatever contingency triggered them — including the death of the holder — are taxed in all cases as employment income (rendimientos del trabajo) in the beneficiary's income tax, and are not subject to inheritance tax. The Directorate-General for Taxes restated this in a binding ruling in February 2025, in a case where the beneficiary was not even resident in Spain: the benefits went into income tax, not inheritance tax. Pension money in Spain simply does not travel by succession. It travels by beneficiary designation, and it arrives as income.
The second building block is more directly on point. In a binding ruling of 5 March 2025, the Directorate-General for Taxes considered a Spanish tax resident with a US retirement plan who wanted to move the funds to an IRA or to a Spanish pension plan. The conclusions matter for us in three ways. Funds received from the US plan are employment income under article 17.1 of the Spanish income tax law, taxed in the general base. The special regime for plans regulated under Spanish law does not apply, because a US plan is not regulated under Spanish or EU rules — so no reductions and no exemptions, it is taxed like income from a former employment. And a direct trustee-to-trustee transfer within the United States does not trigger Spanish tax, provided the taxpayer never receives the funds — but there is no legal mechanism for a tax-free transfer of a US plan into a Spanish one.
Put the two together and the picture that emerges for an inherited US IRA is income tax, on the general progressive scale, on the whole of every distribution, with no acquisition value, no reduction and no exemption. Not a capital gain. Not an inheritance.
The Málaga relief that may not reach the account
This is where the abstraction turns into money, and specifically into money in Andalucía.
A great many Americans choose Málaga over Barcelona or Palma partly on the strength of one number. For deaths from 11 April 2019, Group I and Group II heirs — children, spouses, parents, and registered unmarried partners equated to spouses — apply a 99% bonificación of the inheritance tax liability on acquisitions on death. For deaths from 1 January 2022, the same heirs also get a €1,000,000 reduction of the taxable base, with the old preexisting-wealth condition removed. The practical effect is that an adult child can inherit a substantial estate in Andalucía and pay a token amount. It is a genuine advantage and we recommend the region for it, among other reasons.
But a relief that lives inside the inheritance tax can only rescue an asset that is inside the inheritance tax. If the inherited IRA is income rather than inheritance, then the inheritance tax never applies to it, the 99% has nothing to reduce, the €1,000,000 has nothing to shelter, and the account is taxed instead on the general IRPF scale — the same bands that tax a salary, reaching rates in the mid-forties — on every euro that comes out, over ten years.
There is a detail in the Andalusian rule that makes this sharper rather than softer. The 99% bonificación is expressly stated to include "the beneficiaries of life insurance policies." The legislature plainly did consider money that passes by beneficiary designation rather than by will, and deliberately brought it in. It brought in life insurance because life insurance is inside the inheritance tax. It did not bring in pension money, because pension money was never in that tax for it to reach.
So the situation is not that Andalucía has been ungenerous. It is that the most generous inheritance-tax regime in Spain is, for the largest single asset most American retirees will ever inherit, potentially beside the point. That is worth knowing before you make a regional decision on the strength of the headline, and it is the reason we treat this as a different question from our page on inheritance and gift tax in Spain rather than a paragraph within it.
Two accounts, one death, two different worlds
The same $600,000, the same father, the same day.
| His taxable brokerage account | His traditional IRA | |
|---|---|---|
| US basis at death | Stepped up to date-of-death value | No step-up — income in respect of a decedent, excluded by name |
| US tax when you take the money | Little or nothing — the gain was wiped | Ordinary income on the whole amount |
| Spanish tax that applies | Inheritance tax at death; then income tax on later growth | Likely income tax on each distribution; possibly no inheritance tax at all |
| Which Spanish base | Savings base, 19%–30%, and only on post-death growth | General base, progressive salary scale, on 100% of each distribution |
| Spanish acquisition value | Value at death, plus proportionate inheritance tax paid | Nothing to step — no capital gain is being computed |
| Andalucía's 99% relief and €1M reduction | Applies for Group I / II heirs | Cannot apply if the asset is outside the inheritance tax |
| Deadline to take the money | None. Hold it for thirty years | Empty by 31 December of the 10th year after death |
| Do you choose the years? | Entirely | Only if he died before his required beginning date |
The credit that works — and what it does not fix
Readers of our pages on the Roth IRA and on qualified charitable distributions will be bracing for the familiar trap: a US rule removes the American tax, no American tax means no foreign tax credit, and Spain taxes the lot with nothing to offset it. It is worth saying clearly that this is not that case, and that the news here is comparatively good.
An inherited traditional IRA distribution is genuinely, fully taxable in the United States. Both countries tax the same money in the same year. The relief machinery therefore has something real to work with. Under the US–Spain treaty, pensions and similar remuneration for past employment derived by a resident of Spain are generally taxable only in Spain; the United States nevertheless taxes its own citizens under the saving clause; and it is then the United States that must relieve the resulting double taxation. In practice, the American heir files in both countries and the US side looks to credit mechanics rather than to exemption.
So what is actually lost is not relief. It is rate. The money leaves a world where it would have been taxed at US ordinary rates and enters one where it is taxed on the Spanish general scale, and since the Spanish figure is typically the higher of the two, that is broadly where your total lands. There is no scandal in it and no failure of the treaty. There is simply a conversion, and it happens the moment you become resident.
But notice the mirror image, because it is the part that is genuinely uncomfortable. If the account were instead held to fall inside Spanish inheritance tax, the position on relief would be worse, not better. The United States gives an income tax deduction for the federal estate tax attributable to income in respect of a decedent — federal estate tax, not a foreign one. A Spanish inheritance tax bill would not be creditable against US income tax, and there is no US–Spain estate or inheritance tax treaty to coordinate the two systems, as we explain elsewhere. So the reading that most clients instinctively hope for — "it's an inheritance, Andalucía barely taxes those" — is also the reading with the least relief architecture behind it, if the numbers ever got large. Neither branch is clean. They are uncomfortable in opposite directions, which is precisely why this needs deciding rather than assuming.
Ten years, and a Spanish calendar with no split year
If you have the lever — if your father died before his required beginning date — the planning question is which years absorb the money, and the answer is constrained by two Spanish features that surprise Americans.
The first is that Spain has no split-year treatment. Arrive in March and you are generally a Spanish tax resident for the whole of that calendar year, retroactively to 1 January. "Take the money out before I move" therefore does not mean before your flight. It means before 1 January of your arrival year. This single fact converts a decision about a plane ticket into a decision about a tax year, and it is the same trap we describe for a pre-move business sale and for savings bonds reaching maturity.
The second is that acceleration has its own price. Collapsing a ten-year window into one American year to escape Spain entirely means pushing the whole account up through the US brackets in a single filing — which on $600,000 is not a modest exercise. The elegant answers usually live in between: the low-income years after a final salary and before pensions and required distributions begin are, for many Americans, the cheapest years of their adult life, and a large inherited IRA distribution taken in one of those years, while still solely a US taxpayer, can be remarkably inexpensive. If the inheritance and the relocation are both in front of you, their order is worth several times what most people spend on advice about either.
And if the inheritance has already happened and you are already resident? Then the ten years are Spanish years, the lever still exists, and it is now a question of shaping the drawdown around your other Spanish income — which is exactly the modelling our page on how US retirement income is taxed in Spain sets out, applied to an account with a deadline attached.
What a consulate makes of a decaying account
A short but consequential point for anyone whose visa is not yet settled, because it cuts against the intuition that more money is always better.
The non-lucrative visa asks you to demonstrate sufficient, recurring means — the threshold expressed as a multiple of the IPREM — and a consulate reads recurrence rather than balance. An inherited IRA under the ten-year rule is, by construction, income that stops. It is not a pension. It is not an annuity. It is a fixed pile with an expiry date, and if it is doing heavy lifting in your means calculation at application, it is doing nothing at all by your second or third renewal, when the same evidence has to be produced again and the account is empty.
This is the same distinction we draw in our page on using a 401(k) or IRA as proof of income for the non-lucrative visa: a balance is not a stream, and a stream that terminates in year ten is a weak foundation for a permission you must renew. The inherited IRA is best understood as something that funds your life in Spain, not as something that proves you can live there.
Modelo 720 and wealth tax
Two Spanish obligations attach to the account itself rather than to what comes out of it, and both start earlier than people expect — at the moment the account is yours, not the moment you draw on it.
An inherited IRA is a foreign asset held by a Spanish resident and falls within the reporting categories of Modelo 720 once the thresholds are met. The trap here is the timing: an account you inherited in November and have never touched, whose statements go to a US address and whose existence you learned of by telephone, is exactly the kind of asset that misses its first reporting cycle. It is new to you and therefore new to your Spanish filings, and inheriting it mid-year is precisely when a reporting obligation is easiest to overlook. If the same inventory reveals old missed FBARs or unfiled US returns, the remedial question is separate; our guide to catching up through Streamlined Foreign Offshore Procedures explains the non-willful route for taxpayers living abroad.
The same balance feeds the wealth tax analysis, which varies by autonomous community, plus the state solidarity tax above €3m. There is a small unfairness worth naming: the untaxed balance sitting in that account increases your wealth-tax base each year, even in the years when you deliberately take nothing out of it — and you will still pay full income tax on the same money when it finally emerges. The nine quiet years are not free.
Two dates, before anything else
Almost every page on this site ends with a list. This one ends with two dates, because if you get them the rest of the analysis follows, and if you do not, nothing else is decidable.
Get the date of birth and the date of death of the person whose IRA you inherited. Work out whether they died before or after 1 April of the year following the year they turned 73. That single relationship tells you whether you own ten years of choice or a nine-year schedule you cannot alter, and everything else — the move date, the drawdown shape, the Spanish bracket modelling — is downstream of it. It is free to establish and nobody will hand it to you.
Then, in order: check the age gap between you and the deceased, because ten years or less lifts you out of this regime entirely. Read the beneficiary designation to see whether a person or a trust is named, because a trust may have replaced your ten years with five. Get the Spanish characterisation settled — income or inheritance — with advice, before the first withdrawal rather than after it, since the first withdrawal is where the position gets taken. Put the account into your Modelo 720 and wealth tax filings for the year you inherited it, not the year you first draw on it. And coordinate the two returns together with your US adviser and your US filing obligations, because this is one of the items where looking at each country separately produces two correct answers and one wrong outcome.
The account will still be there in year nine. The choices will not.
Frequently asked questions
I inherited my father's IRA and I live in Spain. Does Spain tax it?
Almost certainly, yes, and the difficult question is not whether but under which tax. Spain taxes its residents on worldwide income and worldwide inheritances, so both of the candidate taxes reach the account. Spanish doctrine on pension plans holds that plan benefits are taxed as employment income in the beneficiary's income tax and are not subject to inheritance tax, whatever the contingency that triggered them, including death. The Directorate-General for Taxes has separately confirmed that funds received from a US retirement plan or IRA by a Spanish resident are employment income under article 17.1 of the income tax law, taxed in the general base, with no access to the special regime for Spanish pension plans and no specific reduction. Applied to an inherited IRA that points towards income tax at general progressive rates on the whole distribution rather than inheritance tax on the account. We have not seen the point squarely decided for an inherited US IRA, so both readings are arguable, but the difference is worth a great deal of money and it should be settled with advice before the first withdrawal, not after.
Does Andalucía's 99% inheritance tax relief apply to an inherited IRA?
Possibly not, and this is the point that surprises people most. Andalucía's 99% bonificación of the inheritance tax liability for Group I and Group II heirs, together with the one-million-euro reduction of the taxable base, is one of the reasons Americans retire to Málaga rather than elsewhere in Spain. But a relief inside the inheritance tax can only help you if the asset is inside the inheritance tax. If the inherited IRA is characterised as employment income in your income tax return, as Spanish pension-plan doctrine suggests, then the inheritance tax never applies to it and there is nothing for the 99% to reduce. The account would instead be taxed on the general progressive scale as each distribution comes out. Notice that the Andalusian rule expressly extends to beneficiaries of life insurance policies. The legislature did think about money that passes by beneficiary designation, and included the one such product that sits inside the inheritance tax. Pension money is not in that tax to begin with.
What is the ten-year rule and does it force me to take money out?
The ten-year rule requires a beneficiary who is not taking life expectancy payments to withdraw the entire balance of the inherited IRA by 31 December of the year containing the tenth anniversary of the owner's death. Whether it forces annual withdrawals along the way depends entirely on one fact about the person who died. If the owner died before their required beginning date, IRS guidance is explicit that no distribution is required for any year before the tenth year, so you may take nothing for nine years and everything in year ten, or spread it however you like. If the owner died on or after their required beginning date, you must also take annual required minimum distributions in the intervening years, and the account must still be emptied by year ten. One case gives you ten years of choice. The other gives you almost none.
Why does my father's date of death matter so much?
Because it decides whether you have a planning lever at all. The required beginning date for a traditional IRA owner who reaches age 72 after 31 December 2022 is 1 April of the year following the year in which they reach age 73. Dying before that date and dying after it produce different rules for the beneficiary, and the gap between the two can be a matter of months at the same age. IRS guidance addresses this directly: if an IRA owner dies after reaching age 73 but before their required beginning date, no minimum distribution is required for that year, because death occurred before the required beginning date. For an American living in Spain, whose whole opportunity lies in choosing which years the money lands in, that single date is worth more than any other fact in the file, and no one in the family will think to mention it.
Is the inherited IRA taxed more heavily in Spain than my father's brokerage account would have been?
Generally yes, and by a wide margin, for reasons that have nothing to do with the money itself. An inherited taxable brokerage account receives a new acquisition value at death, so Spain generally looks only at the growth after the death, taxed in the savings base at rates running from 19% to 30%. An inherited IRA, on the analysis Spanish pension-plan doctrine suggests, has no acquisition value to step and no capital gain to compute. The whole distribution is employment income in the general base, on the same progressive scale as a salary. The United States mirrors this: an IRA is income in respect of a decedent and is expressly denied the step-up in basis that the brokerage account receives. The same dollars, held in a different wrapper, are denied a fresh start on both sides of the Atlantic.
Does the foreign tax credit protect me here, or is this another Roth situation?
This is the better case, and it is worth saying so plainly. Unlike a Roth distribution, an inherited traditional IRA distribution is genuinely taxable in the United States, and both countries tax it in the same year, so the relief machinery has something real to work with. Under the treaty Spain taxes as the country of residence, the United States taxes its citizens under the saving clause, and it falls to the United States to relieve the double taxation. So the usual outcome is not double tax. It is conversion: the money leaves a US-rate world and arrives in a Spanish-rate world, and because Spanish general-base rates typically exceed the US rate on the same income, your total bill tends towards the Spanish figure. The loss is real but it is a rate loss, not a relief failure. Note the mirror image, though: if the account were held to fall inside Spanish inheritance tax instead, the United States would give no income tax credit for a Spanish inheritance tax, and there is no US–Spain estate or inheritance tax treaty to coordinate the two. Neither reading is entirely clean.
Am I an eligible designated beneficiary? Does it change anything?
It changes the shape of the whole problem, and one category catches people out. An IRA beneficiary is an eligible designated beneficiary if they are the owner's surviving spouse, the owner's minor child, a disabled individual, a chronically ill individual, or any other individual who is not more than ten years younger than the IRA owner. That last category is the sleeper: a brother, a sister, an unmarried partner, a close friend. It is not about family at all, only about the age gap, and it lifts the beneficiary out of the ten-year regime into life expectancy payments, which for a Spanish resident means a long thin stream instead of a ten-year cliff. A surviving spouse who is the sole designated beneficiary has the strongest position of all, because they can elect to be treated as the owner of the IRA, which resets the analysis to that of an ordinary owner rather than an heir.
Should I take the money out before I become a Spanish tax resident?
Where the timing works, it is usually the first thing to model, but it is a calculation and not a rule, and two Spanish features constrain it. Spain has no split-year treatment, so arriving in March generally makes you resident for the whole calendar year. Before the move means before 1 January of your arrival year, not before your flight. And the option only exists if the owner died before their required beginning date, because that is the only case in which nothing has to come out before year ten. Against acceleration, you are collapsing years of deferral into a single US year and pushing yourself up the US brackets, which can be expensive on its own. There is also a visa dimension: a ten-year drawdown is by construction income that stops, which is not what a consulate is looking for when it assesses recurring means for a non-lucrative visa. Model it with your US and Spanish advisers before you touch the account.
Sources reviewed July 2026: IRS Publication 590-B (2025), Distributions from Individual Retirement Arrangements — the 10-year rule requiring the entire balance to be withdrawn by 31 December of the year containing the 10th anniversary of the owner's death; "if the IRA owner dies before the required beginning date and the 10-year rule applies, no distribution is required for any year before the 10th year"; required minimum distributions for a designated beneficiary where the owner died on or after the required beginning date, based on the longer of the beneficiary's or the owner's life expectancy; the required beginning date of 1 April of the year following the year the owner reaches age 73 for owners reaching 72 after 31 December 2022, and the statement that an owner dying after reaching age 73 but before their required beginning date died before that date; the definition of an eligible designated beneficiary (surviving spouse, minor child, disabled individual, chronically ill individual, or any other individual not more than 10 years younger than the owner); the surviving spouse's election to be treated as the owner; the 5-year rule where the beneficiary is not a designated beneficiary and the owner died before the required beginning date; and the excise tax on amounts remaining after the applicable deadline. IRC §1014(c) (no step-up in basis for property constituting a right to receive income in respect of a decedent) and §691(c) (deduction for federal estate tax attributable to income in respect of a decedent). IRS/Treasury US–Spain income tax treaty documents (article 20, pensions and annuities; article 1(3) saving clause; article 24, relief from double taxation). Dirección General de Tributos binding rulings V0251-25 of 5 March 2025 (funds received from a US retirement plan or IRA by a Spanish resident are rendimientos del trabajo under article 17.1 LIRPF, integrated in the general base; the special regime of RDL 1/2002 and DA 22ª LIRPF mobilisation relief do not apply to a US plan; a direct transfer within the United States is not taxed in Spain provided the funds are not received) and V0168-25 of 13 February 2025 (pension plan benefits, whatever the contingency including death, are taxed as employment income and are not subject to the Impuesto sobre Sucesiones y Donaciones). Ley 29/1987 del Impuesto sobre Sucesiones y Donaciones and article 6.4 LIRPF (income subject to inheritance tax is not subject to income tax). Agencia Tributaria de Andalucía, tax benefits in the inheritance tax: 99% bonificación of the liability for Group I and II heirs on acquisitions on death, expressly including beneficiaries of life insurance policies, for events from 11 April 2019, and the €1,000,000 improvement of the state reduction for Group I and II heirs for deaths from 1 January 2022, per Decreto Legislativo 1/2018 and Ley 5/2021 de Tributos Cedidos de Andalucía. AEAT guidance on Spanish tax residence, the IRPF general and savings bases, and Modelo 720 reportable categories and thresholds; Ley 19/1991 del Impuesto sobre el Patrimonio and the state solidarity tax above €3M. General information only, not legal, tax, immigration or US tax advice. In particular, the Spanish characterisation of an inherited US IRA as employment income rather than an inheritance is our reading of existing doctrine and has not, so far as we have seen, been squarely decided for this asset; that characterisation, the availability and mechanics of foreign tax credits, the regional inheritance tax position, valuation for Modelo 720 and wealth tax, and the interaction with your US return must all be confirmed for your own facts with Spanish and US advisers before you rely on them.