Inheritance in Spain UK families-general information

Inheriting property in Spain as a UK citizen involves navigating both Spanish and UK legal systems. Here  is  a comprehensive guide to help UK families understand the process, obligations, and potential complications.

1. Wills
It is advisable to have a Spanish will if you own property in Spain to simplify the process and ensure compliance with local laws. However, a UK will can also be recognized if it specifies that UK law should govern the inheritance, potentially
overriding the forced heirship rules for UK citizens. Our advise is to have a Will always.

Forced Heirship

Spain operates under a forced heirship system, which mandates that a certain portion of the estate must go to the deceased's direct heirs (spouse and children). The estate
is divided into three parts:
– Legítima (Compulsory Share): Two-thirds of the estate are reserved for compulsory heirs. One-third goes directly to the children in equal shares (the “legítima estricta”), and another third can be allocated more flexibly among the children and spouse (the
tercio de mejora)
– Free Disposal: The remaining one-third can be distributed according to the deceased’s wishes, as stated in the will.

Understand the process, obligations, and potential complications.

2. The Inheritance Process
Steps Involved
1. Death Certificate: Obtain a death certificate from the UK legalised with the apostille stamp.
2. Certificado de Últimas Voluntades: This certificate from Spain confirms whether the deceased had a Spanish will.
3. Will Execution: If there is a Spanish will, it needs to be executed by a notary in Spain to make the Estate distribution with the Inheritance Deed.
4. Heir Declaration: If there is no Will and the deceased was a Spanish resident who passed away in Spain and whose Estate was only in Spain, the heirs must be declared, which may require proof of relationship to the deceased.
5. Payment of Debts and Taxes: Any outstanding debts and taxes must be settled from the estate.
Heirs will need:
– The deceased’s death certificate
– Certificado de Últimas Voluntades
– Copy of the will (if applicable)
– NIE (foreigner identification number) for all heirs

– Deed of acceptance of the inheritance (Escritura de Aceptación de Herencia)

3. Tax Implications
Inheritance Tax (Impuesto sobre Sucesiones y Donaciones)
– Residents: Spanish residents are subject to inheritance tax on their worldwide assets.
– Non-Residents: Non-residents are taxed only on Spanish assets.
– Rates and Allowances: Rates vary by region and relationship to the deceased. Spouses and children generally receive more favorable rates and allowances. In the Valencian Community (Torrevieja, Alicante, Benidorm, Costa Blanca area) the Inheritance and Gift tax is reduced almost to zero (it is reduced by 99%)
– Double Taxation: The UK and Spain have a double taxation treaty to avoid being taxed twice on the same inheritance.
Other Taxes
– Plusvalía Municipal: A municipal tax on the increase in the value of urban land, payable by the heir(s).
– Capital Gains Tax: Applicable if the property is sold after inheritance.

4. Practical Considerations

Legal Assistance
Engaging a bilingual lawyer who specializes in cross-border inheritances can greatly simplify the process and ensure compliance with both UK and Spanish laws.
– Complexity of Dual Systems: Navigating the different inheritance laws and tax systems in Spain and the UK.
– Documentation: Ensuring all necessary documents are correctly prepared and submitted in both countries.

Inheriting property in Spain as a UK citizen involves multiple legal and tax considerations. Proper planning, understanding the local laws, and seekingprofessional advice are crucial steps to ensure a smooth and efficient inheritance process.