We recommend to all our clients that at some point they make a will in Spain to cover the bequeathing of their Spanish assets. In theory, a will made in their home country covers their world wide assets already.
However, if you have only made a foreign will then there are implications for your inheritors. For example, they will have to have an official translation and the Foreign Office and lawyers will have to be involved. Additional steps that make the procedure more complicated at a particularly difficult time.
The law of succession
Different countries have different laws surrounding who you can and can’t leave your property to. Spanish succession law requires that a proportion of the estate must be left to legal beneficiaries such as your spouse and children. Children must inherit two-thirds of their parents’ inheritance.
Other nationalities living in Spain can follow the succession law of their own country if they prefer. However, EU legislation means that this intention must be declared in your Spanish will.
The Regulation (EU) No. 650/2012 states: “EU citizens habitually residing in Spain (Residents) will be subject to the Spanish succession law, despite their nationality, unless they specifically state in their will the wish for the succession law of their country of origin to apply”.
If the correct clause isn’t included then the distribution of your inheritance in Spain could automatically revert to Spanish law. If you have no will at all, then Spanish law will also apply.
Please note that if you are a non-resident your own national law will dictate how you bequeathe your assets.
Regardless of nationality or status (resident or non-resident) Spanish inheritance tax is applied to all Spanish assets when the owner dies. The tax must be paid before the change of ownership to the inheritor(s) can take place. There are three factors that need to be taken into account when working out how much inheritance tax needs to be paid:
- the inheritor’s relationship to the deceased
- whether you are resident or non-resident in the European Union
- in which Spanish region (comunidad) the property is located
Depending on these three factors the inheritance tax can be anything from 0 to a significant amount.
Signing a Spanish will
In Spain, for a will to be valid and registered at the Last Will Registry, it must be signed before the Public Notary. From the information provided by you, Ábaco staff will prepare the will both in your own language and Spanish and forward it to the Notary office for revision.
The appointment at the Notary is coordinated by Ábaco and a member of our staff will accompany you, acting as your translator. The fee for this service is 180 € per will, including preparation, translation and Notary fee. You will have to produce your original passport, accompanying you may also include your residency card or NIE number at the Notary.
The inheritance procedure
Ábaco Advisers has a multi-lingual team with native speakers of seven languages. They are headed by a qualified Lawyer, specialising in all aspects of inheritance. They are the first point of contact for your inheritors and will guide them in a kind and professional manner throughout the entire Spanish inheritance procedure.
Inheritors will receive clear instructions about documentation they have to provide and how to deal with bank accounts in Spain and change of name issues. Abaco staff will ensure that they receive a detailed explanation about the steps involved in paying inheritance tax and legally transferring the ownership of property or other assets to their name.
Frequently asked questions
Can the inheritance tax be deducted from my estate before it is transferred to my inheritor(s)?
In Spain, tax is charged on the beneficiary and not on the estate. Therefore, each of your inheritors will need to pay tax on their share of the inheritance within six months in order to avoid penalties and fines. Property cannot be sold until the inheritance process is completed, including the inheritance tax declaration.
Will the property automatically be transferred to my inheritors?
No, this is not automatic and Spanish inheritance procedure must be followed. This involves collecting, legalizing and translating several documents and applying for the certificates required by the Spanish Notary to sign the Inheritance Deed. Once this deed has been signed and the tax declaration has been presented the inheritors become the official owners of the property. The Inheritance Deed becomes the new Title Deed of the property they are receiving.
Are inheritance taxes the same all over Spain?
Spanish Inheritance tax rates and allowances are set nationally but each region has the power to vary them. These variations only apply in most cases if you and your inheritors reside permanently in the European Union. Non-residents in the EU are governed by the national rate. Please contact us for a Spanish inheritance tax calculation according to your individual circumstances.
How will my assets be valued?
Spain has a set system for evaluating assets for purposes of inheritance tax. However, your inheritors will need to take guidance from our specialist team as they will be expected to voluntarily declare the value of their inheritance. Needless to say, the tax authorities will soon charge extra tax if they do not agree with the declaration value.
Property is normally valued by taking the so called reference value. However, there are two instances when a more precise valuation must be obtained:
1) If your inheritors are considering selling the property as soon as they sign the Inheritance Deed; they must declare the same value in the Inheritance Deed as the Sale Deed.
2) If your inheritors require an official valuation in their home country then the Inheritance Deed in Spain will have to reflect the same value.
The contents of a property such as furniture, clothing and personal effects are usually valued approximately by calculating 3% of the value of what is inherited.
Vehicles and boats are valued either by an official valuation or approximately, according to the model, age and mileage.
Money in bank accounts etc. is included in the estate by obtaining a certificate of balance on the date of the account holder’s death.
Will my inheritors have to travel to Spain?
No, in fact we recommend that inheritors sign a Power of Attorney, either in Spain or, if they wish to avoid travelling, in their home country. This means that our team of solicitors have permission to act on their behalf during the inheritance procedure.
Should my inheritors have N.I.E. numbers?
Your inheritors do not need to have an N.I.E. number at the time of you signing your will and naming them as inheritors. However, to receive their inheritance they must pay inheritance tax and will have to be fiscally identified by means of the N.I.E. number. A special clause can be included in the Power of Attorney enabling us to apply and obtain their N.I.E. numbers in Spain without them having to travel here.