Spanish inheritance law differs from UK inheritance law. Priority may be given in Spain to children and parents ahead of any surviving spouse when it comes to inheriting an estate.
>> Download your free guide to Inheritance in Spain
So if you don’t have a will, it’s easy to see what could go wrong.
Estimates vary, but it is generally agreed that around two thirds of British people do not have a will. When a person dies without a will this means that the estate is “intestate”. What this means is that the assets pass according to a fixed set of rules, called the rules of intestacy, whereas if there is a will then the assets pass according to the wishes of the person who has passed away as set out in their will.
In the event that a British national who owns assets in Spain dies without a Spanish will, matters can become rather complicated. As with all matters regarding Spanish law it is advisable to obtain good quality independent legal advice at an early stage.
Intestate Estates in Spain - Stage One
First it is necessary to identify whether Spanish or English law applies, and from there to identify who is entitled to inherit from the estate. The factors which are considered at this stage involve complex issues of law and so this is a step best approached by a lawyer with expertise in cross border succession matters.
If you think that you may be entitled to benefit from an estate in Spain, then please contact us and we can advise you as to your status.
Intestate Estates in Spain - Stage Two
Once it has been established which law applies and who is entitled to inherit from the estate, it is necessary to prepare documentation in order to sign a “declaration of heirs” - this is a document setting out all of the assets of the estate in Spain and the relationship of those who are entitled to inherit to the person who has died.
It is necessary to include with this document documentary evidence of the relationships of the beneficiaries to the deceased. In cases where there are a large number of beneficiaries this can mean that a large amount of documentation is required.
At this stage it will also be important to make enquiries to establish the value of the estate and to calculate any inheritance tax that may be payable in respect of the estate.
For more information about inheritance tax in Spain please see our page here.
Intestate Estates in Spain - Stage Three
Once the declaration of heirs has been signed it will be possible to sign the acceptance of inheritance in Spain. This is a document which is signed before a Notary in Spain in which the assets are described and the beneficiaries are set out. In the case of an intestacy where there is no will, reference will be made to the declaration of heirs in place of the will.
Once the acceptance of inheritance has been signed any inheritance tax which is payable will become due immediately. Hence it is important to know how this will be funded prior to signing documentation.
When the inheritance tax has been paid and the document stamped by the Spanish tax agency work can begin upon obtaining the funds from the Spanish banks and arranging for any property owned by the deceased to be registered in the names of the beneficiaries.
Intestate Estates in Spain - Stage Four
Once the acceptance of inheritance documentation has been approved by the Spanish tax agency it will be possible to ask the banks to release funds. Please note that in some cases this can be the part of the process that takes the longest. Spanish banks can and do take an inordinate amount of time in considering documentation and in making the arrangements to release funds. Rest assured that you will receive interest for the time that the funds will be held.
If you are planning to sell the property once the acceptance of inheritance has been completed please note that it will not be possible to register a sale of the property until the inheritance has been registered. Hence, it is best to avoid marketing the property for sale too early.
Spanish inheritance laws differ from those in the UK. Priority may be given to children, parents and grandparents ahead of any surviving spouse when it comes to inheriting an estate.
So if you don’t have a will, it’s easy to see what could go wrong.
Who inherits property in Spain?
In Spain, in the absence of a will, any children and a spouse are the legal beneficiaries. Because of this, depending upon where you are habitually resident immediately before you die, you may only have one third of your estate to do with as you please if you have no will from either Spain or the UK.
What is the inheritance tax threshold in Spain?
The nil rate band available to each beneficiary of a Spanish estate varies depending upon where in Spain the assets are located. The amount of tax payable depends upon the overall value to be inherited. The higher the value, the higher the rate of taxation.
How can Spanish inheritance tax be minimised?
When it comes to calculating the inheritance tax payable in Spain each beneficiary benefits from a nil rate band. That means that if the share of the estate they inherit is below the nil rate band, they will pay no inheritance tax in Spain.
Intestate Estates in Spain - Next steps
If you are administering an estate or you are a beneficiary of an estate with assets in Spain feel free to contact us for a free initial consultation. E&G Solicitors in Spain has considerable experience and expertise in this area. You can reach us by email at info@solicitorsinspain.com, by telephone on 020 3478 1420 or by completing our contact form.
