Being an Heir While Living Abroad: What You Need to Know

🇪🇸 Read the original in Spanish

Receiving an inheritance in Spain while residing abroad is an increasingly common situation in a globalised world, but it usually turns into a real bureaucratic and tax labyrinth for those who face it. Physical distance, lack of knowledge of local laws, and the coexistence of different regional and state regulations can delay the processes or, worse still, generate costly tax penalties. In this detailed guide, we analyse everything you need to know to manage your inheritance in Spain without the need to travel constantly, strictly complying with current legislation and optimising your tax bill.

The legal framework: Which law governs the succession?

When an heir resides outside of Spain, the first question that arises is which law regulates the inheritance (the forced share, wills, the order of succession, etc.). To resolve this, we must look to Regulation (EU) No 650/2012 (known as the European Succession Regulation), which applies to the inheritances of persons deceased on or after 17 August 2015.

According to this regulation, the law applicable to the entirety of the succession will be that of the habitual residence of the deceased at the time of their death, unless they had opted in their will for the law of their nationality (professio iuris).

• If the deceased resided in Spain: The Spanish Código Civil (Civil Code) will apply (or the regional civil laws, known as derechos forales, of autonomous communities such as Catalonia, Aragon, the Basque Country, Navarre, Galicia, or the Balearic Islands, if the deceased had that specific regional legal status, known as vecindad civil).
• If the deceased resided abroad: The law of that foreign country will apply, unless they had chosen Spanish law in their will due to holding Spanish nationality.

It is fundamental to distinguish between the law that regulates the inheritance (who inherits and in what proportion) and the law that regulates taxes (where and how much is paid), as the latter will always be governed by the criteria of tax territoriality.

Practical step-by-step procedures for the heir abroad

Managing an inheritance from thousands of kilometres away is perfectly viable if the appropriate steps are followed. Below, we detail the chronological roadmap you must follow:

1. Obtaining a power of attorney for representation

If you cannot or do not wish to travel to Spain to carry out the procedures, you must grant a Poder Especial para Herencias (Special Power of Attorney for Inheritances) in favour of a third party (a lawyer in Spain or a trusted relative).

• Where it is done: At the Spanish Consulate in the country where you reside (which acts as a Spanish notary) or before a local foreign notary.
• Key requirement: If it is done before a foreign notary, the document must be translated by a sworn translator and legalised with the Hague Apostille (or diplomatic legalisation if the country did not sign the Hague Convention).

2. Obtaining the NIE (Foreigner Identity Number)

Any heir who is not a resident in Spain (whether a foreigner or a Spanish citizen who has lost tax residency) needs a tax identification number to carry out any procedure with tax implications.

• For foreigners: The provisional NIE (Número de Identidad de Extranjero) is requested at the Spanish Consulate of the country of origin or directly at the Dirección General de la Policía (General Directorate of the Police) in Spain through a representative.
• For Spaniards abroad: They must have their valid NIF/DNI (National Identity Document) or request a specific NIF (Número de Identificación Fiscal) for non-residents from the Agencia Tributaria (Tax Agency).

3. Requesting the death and last will certificates

To initiate any succession procedure in Spain, you need three fundamental documents:

• Certificado de Defunción (Death Certificate): This is requested from the Registro Civil (Civil Registry) where the death occurred.
• Certificado de Actos de Última Voluntad (Certificate of Last Will and Testament): This document certifies whether the deceased granted a will and before which notary. It can be requested after 15 business days have elapsed since the death.
• Certificado de Contratos de Seguros de Cobertura de Fallecimiento (Certificate of Insurance Contracts for Death Coverage): This indicates whether the deceased had life insurance policies.

4. Inventory of assets and debts

The legal representative or you yourself must locate the deceased's assets in Spain. This includes requesting bank balances as of the date of death, obtaining notas simples (property registry extracts) from the Registro de la Propiedad (Land Registry) for real estate, and valuing other assets (vehicles, shares, etc.). *Article 1003 of the Código Civil** reminds us that the heir is liable for the deceased's debts even with their own assets, unless they accept the inheritance a beneficio de inventario* (under benefit of inventory).

5. Drafting and signing the deed of acceptance and allocation of inheritance

Once the assets and heirs have been identified, the inheritance deed is drafted. The representative holding the power of attorney will go to the notary's office in Spain to sign the acceptance and allocation of the assets on your behalf.

Taxation of the non-resident: Where and how much is paid?

The most complex aspect of inheriting from abroad is the settlement of the Impuesto sobre Sucesiones y Donaciones (ISD - Inheritance and Gift Tax). In Spain, this tax is devolved to the Comunidades Autónomas (Autonomous Communities), which apply significant allowances (in many cases up to 99% or practical exemption between parents and children).

The historic change: Ruling of the Court of Justice of the EU (CJEU)

Historically, non-residents in Spain had to pay the state-level tax, which was much more expensive and did not offer access to regional reductions. However, following the landmark CJEU ruling of 3 September 2014, Spanish regulations had to be modified (through Law 26/2014).

Today, non-resident heirs (both EU and non-EU residents) have the right to apply the regulations of the Autonomous Community with which there is the closest connection (for example, where the highest value of the real estate assets of the inheritance is located).

Submission deadlines

The deadline to file and pay the Inheritance Tax in Spain is 6 months counting from the day of the deceased's death.

• Extension: An extension of an additional 6 months can be requested, provided it is applied for within the first 5 months of the submission period. This extension entails the accrual of late-payment interest.

The Impuesto sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana (Municipal Capital Gains Tax)

If the inheritance includes urban real estate, in addition to the ISD, the Plusvalía Municipal (Municipal Capital Gains Tax) must be settled with the Town Hall where the property is located. The submission deadline is also 6 months (extendable to 1 year if requested in time).

Practical examples of non-resident inheritance

To understand the impact of tax residency and the location of assets, we analyse two real scenarios:

Example 1: Heir residing in France with a property in Madrid

Jean resides in Paris and is the only son of Manuel, who passed away in Madrid, where he had his habitual residence valued at €350,000 and bank accounts with €50,000.

• Applicable regulations: As he is not a resident in Spain, the self-assessment of the ISD is submitted to the Agencia Estatal de Administración Tributaria (AEAT - State Tax Administration Agency) in Madrid (Non-Resident Assistance Office), but Jean has the right to apply the regulations of the Community of Madrid because the highest value of the assets is located there.
• Tax result: The Community of Madrid applies a 99% tax credit on the tax liability for Group II (children). Therefore, from a theoretical tax liability that could exceed €45,000, Jean will end up paying barely €450 in inheritance tax thanks to the equal treatment of non-residents.

Example 2: Heir residing in Argentina with bank accounts in Spain

María resides in Buenos Aires and inherits a bank account with €80,000 from her uncle (who was a resident in Spain). There is no real estate.

• Applicable regulations: As there is no real estate in Spain, the regulations of the Autonomous Community where the deceased had their last habitual residence apply. Let us assume the uncle resided in Andalusia.
• Tax result: As this is an inheritance between collateral relatives (Group III: uncles/aunts and nephews/nieces), the reductions are lower than between parents and children. María will have to pay tax according to the regional scale of Andalusia, but managing the payment directly before the AEAT Delegation in Madrid due to her status as a non-resident.

Mistakes you must avoid

• Letting the 6-month deadline pass: Many non-residents assume that, because they live abroad, deadlines are suspended or more flexible. Failing to file the tax on time generates automatic surcharges ranging from 1% to 15% (plus interest if it exceeds 12 months) and prevents requesting an extension.
• Forgetting the legalisation and translation of foreign documents: Any document issued outside of Spain (such as a foreign death certificate or a will drafted abroad) lacks legal validity in Spain if it does not bear the Hague Apostille and an official sworn translation.
• Not appointing a tax representative in Spain: Although it is not always mandatory by law, not having a professional or a representative in Spain to receive physical and electronic notifications from the Tax Agency usually results in missing appeal deadlines and facing penalties due to defenselessness.
• Accepting the inheritance without checking for debts in Spain: Signing a pure and simple acceptance of inheritance from abroad without a prior asset and liability analysis can make you liable for the deceased's debts with your own personal assets in your country of residence.

Frequently Asked Questions (FAQ)

Do I have to travel to Spain to accept the inheritance?

No, it is not necessary to travel to Spain at any point in the process. You can manage the entire procedure by granting a power of attorney at the Spanish Consulate in your place of residence. Your legal representative in Spain will be able to request the certificates, sign the deed of acceptance before a notary, settle the taxes, and register the assets in your name.

If I inherit an apartment in Spain and sell it, what taxes do I pay as a non-resident?

If you decide to sell the inherited property, you will be subject to the Impuesto sobre la Renta de No Residentes (IRNR - Non-Resident Income Tax) for the capital gain obtained (the difference between the transfer value and the acquisition value declared in the inheritance deed). The general tax rate for non-residents is 19% for residents in the EU, Iceland, and Norway, and 24% for residents in the rest of the world. In addition, you must pay the Plusvalía Municipal for the sale.

What happens if the deceased did not leave a will in Spain but did leave one abroad?

A will granted abroad is valid in Spain if it complies with the formal requirements of the Hague Convention on the Conflicts of Laws Relating to the Form of Testamentary Dispositions. For it to take effect before a Spanish notary, it must be presented duly apostilled, translated by a sworn translator, and, occasionally, accompanied by a "certificate of law" issued by a consul or jurist from the country of origin explaining the validity of the document according to their local legislation.

Can I apply the tax benefits of my community if I live outside the European Union?

Yes. Following several rulings by the Spanish Supreme Court that extended the doctrine of the CJEU, residents of third countries (such as the United States, Argentina, Mexico, Andorra, or the United Kingdom) have exactly the same right as EU residents to apply the tax advantages and allowances of the Autonomous Community with which the connection point of the inheritance exists.

In summary

• Applicable law: The succession is governed, as a general rule, by the law of the last habitual residence of the deceased, unless they had opted for their national law in their will.
• Representation: Traveling is not mandatory; you can carry out the entire process from abroad by granting a power of attorney at the Spanish Consulate.
• Key procedures: It is essential to obtain the non-resident NIE or NIF and to have all foreign documents duly apostilled and translated.
• Tax equalization: Non-residents (both from the EU and outside of it) have the right to apply the tax allowances of the corresponding Autonomous Community.
• Strict deadline: You have a period of 6 months from the death to settle the Inheritance Tax, extendable for another 6 months if requested within the legal timeframe.

General legal information, not personalised legal advice. For your specific situation, ask your question for free at AbogadoAI — answers grounded in Spanish law (BOE), in English.

This is general information, not legal advice. Verify on the BOE or consult a lawyer for your specific case.