Inheritance in Spain for foreigners: what you should know

Navigating the legalities of a foreign country can be daunting, especially when dealing with the emotional weight of losing a loved one. For expats and foreign residents in Spain, understanding how inheritance works is crucial to protecting assets and ensuring that your family is taken care of. Spanish inheritance law is notoriously complex, blending national legislation, autonomous regional rules, and European regulations. This comprehensive guide will walk you through everything you need to know about Spanish inheritance, from the applicable laws and tax rates to the practical steps you must take.

1. The Legal Framework: Which Law Applies to Your Estate?

The first and most critical question for any foreigner owning assets in Spain is: Which country's law governs my inheritance?

Historically, this was a source of major legal disputes. However, the landscape changed significantly with the entry into force of European Regulation No. 650/2012 (commonly known as the "Brussels IV" Regulation). This regulation applies to all deaths occurring on or after August 17, 2015.

The Default Rule: Habitual Residence

Under Brussels IV, the default law applicable to your estate as a whole is the law of the country in which you had your habitual residence at the time of death.

This means that if you are a British, German, or American expat living permanently in Spain, Spanish law will automatically apply to your global estate upon your passing—unless you have explicitly stated otherwise in a will.

The Power of Choice: Professio Juris

To prevent expats from being subjected to unfamiliar Spanish inheritance rules, the EU Regulation allows for a crucial exception: *the choice of law (professio juris)*.

You can explicitly state in your will that you wish the law of your nationality to govern your succession. This choice must be made expressly in a will. If you hold dual nationality, you can choose the law of either country.

• Why this matters: Spanish law imposes strict limitations on how you can distribute your assets, whereas countries like the UK or the USA generally allow for "testamentary freedom" (the right to leave your assets to whomever you choose).

Spanish Civil Code and the "Forced Heirship" Rules

If you do not make a choice of law, and Spanish law applies to your estate, the rules of the *Spanish Civil Code (Código Civil)* will dictate how your assets are distributed.

Unlike Anglo-Saxon systems, Spain uses a system of *forced heirship (legítimas)*. Under Article 806 of the Spanish Civil Code, certain relatives are entitled by law to receive a specific portion of the deceased's estate.

For example, under the common Spanish Civil Code:

• Two-thirds (2/3) of the estate must go to the children and descendants.
• This is divided into the "strict legitime" (legítima estricta), which is divided equally among children, and the "improvement portion" (mejora), which can be used to favor one child over another.
• The remaining one-third (1/3) is of "free disposal" (libre disposición) and can be left to anyone.
• The surviving spouse is also guaranteed a life interest (usufructo) in a portion of the estate, depending on whether there are surviving children or parents.

Regional Variations: The Derecho Foral

It is vital to note that Spain is divided into different autonomous communities, some of which have their own historical civil laws (derecho foral). Regions such as Catalonia, the Basque Country, Galicia, Navarre, Aragon, and the Balearic Islands have their own specific rules regarding forced heirship. For instance, in Catalonia, the forced heirship portion for children is only 25% of the estate, compared to the 66.6% stipulated by the common Spanish Civil Code.

2. Inheritance Tax in Spain: Rates, Allowances, and Regional Differences

Inheritance Tax in Spain (Impuesto sobre Sucesiones y Donaciones or ISD) is governed by National Law 29/1987, but the actual tax you pay is heavily influenced by the autonomous community where the assets are located or where you reside.

Who Pays the Tax?

Unlike in the UK or the US, where the estate itself pays the tax before distribution, in Spain, the individual heir is responsible for paying the tax on their specific share of the inheritance.

Tax liability is split into two categories:

1. *Resident taxpayers (obligación personal):* If you reside in Spain, you must pay Spanish inheritance tax on all assets you receive, regardless of where in the world those assets are located.
2. *Non-resident taxpayers (obligación real):* If you do not reside in Spain, you only pay Spanish inheritance tax on assets physically located in Spain (e.g., Spanish real estate, bank accounts, or shares in Spanish companies).

Tax Rates and Regional Allowances

The national tax rate is progressive, starting at 7.65% and rising up to 34% for large inheritances. Furthermore, "multipliers" can be applied based on the heir's pre-existing wealth and their relationship to the deceased, potentially pushing the tax rate over 80% in extreme cases.

However, the autonomous communities have the power to regulate their own tax allowances and deductions. This has created a massive disparity across Spain.

• Regions like Andalusia, Madrid, Valencia, Murcia, and the Balearic Islands offer generous allowances, often exempting close relatives (spouses and children) from up to 99% of the inheritance tax liability.
• Other regions maintain much lower allowances, meaning heirs face significantly higher tax bills.

Note: Thanks to European Court of Justice rulings, non-EU/EEA residents are now entitled to the same regional tax benefits as EU residents, preventing discrimination based on nationality or residence.

3. Practical Steps: What to Do When Someone Passes Away

When a foreign resident passes away owning assets in Spain, the heirs must follow a strict administrative process to claim and register the inheritance.

``` [Step 1: Death Certificate] ➔ [Step 2: NIE Number] ➔ [Step 3: Registry Searches] ➔ [Step 4: Inventory] ➔ [Step 5: Deed of Acceptance] ➔ [Step 6: Pay Taxes] ➔ [Step 7: Register Assets] ```

Step 1: Obtain the Death Certificate (Certificado de Defunción)

If the death occurred in Spain, you must obtain the certificate from the local Civil Registry (Registro Civil). If the death occurred abroad, the foreign death certificate must be translated into Spanish by a sworn translator (traductor jurado) and legalized with an Apostille of the Hague Convention.

Step 2: Obtain a Spanish Tax Number (NIE - Número de Identificación de Extranjero)

Every foreign heir must have an NIE number to inherit assets in Spain. Without this number, notary offices and tax authorities cannot process the inheritance. You can apply for this at a Spanish consulate abroad or at a National Police station in Spain.

Step 3: Request the Certificate of Last Wills (Certificado de Actos de Última Voluntad)

After 15 business days from the date of death, you must apply to the Ministry of Justice for this certificate. This document officially states whether the deceased made a Spanish will and, if so, before which notary. You must also request the Certificate of Insurance Contracts (Certificado de Contratos de Seguros de Cobertura de Fallecimiento) to see if the deceased had life insurance.

Step 4: Gather the Will or Declaration of Heirs

• If there is a Spanish Will: You must request an official authorized copy (copia autorizada) from the notary who holds the original.
• If there is only a Foreign Will: You must provide the foreign probate documents, translated and apostilled.
• If there is No Will: You must initiate an intestate procedure (declaración de herederos) to legally establish who the rightful heirs are.

Step 5: Inventory the Assets and Liabilities

You must compile a complete list of the deceased's assets in Spain, including:

• Real estate (requiring a recent property registry search (nota simple)).
• Bank account balances (requiring a certificate of balance from the bank as of the date of death).
• Vehicles, shares, and personal belongings.
• Any outstanding debts, as debts are also inherited in Spain.

Step 6: Sign the Deed of Acceptance of Inheritance (Escritura de Aceptación de Herencia)

The heirs must sign this deed before a Spanish notary. If an heir cannot travel to Spain, they can grant a Power of Attorney (poder notarial) to a Spanish lawyer to sign on their behalf.

Step 7: Pay the Taxes and Register the Assets

Once the deed is signed, you have a strict deadline to calculate and pay the Inheritance Tax. After paying the tax, you must register the change of ownership at the Property Registry (Registro de la Propiedad) for real estate, or present the deed to banks to release frozen funds.

4. Key Deadlines and Figures You Must Remember

Missing deadlines in Spain leads to automatic financial penalties and interest. Keep these figures in mind:

• 6 months: The absolute deadline from the date of death to file and pay Spanish Inheritance Tax.
• 6 additional months: You can request a one-time extension of an additional 6 months, but this request must be submitted within the first 5 months of the date of death. If granted, interest on late payment will apply.
• 4 years and 1 month: The statute of limitations (prescripción). If the tax authority does not claim the inheritance tax within 4 years, 1 month, and 1 day from the date of death, they lose the right to collect it.
• 30 days: The deadline to pay the municipal capital gains tax (plusvalía municipal) on inherited real estate, starting from the date the inheritance deed is signed.

5. Concrete Worked Examples

To understand how these rules play out in reality, let us look at two different scenarios.

Example 1: John (UK National, Resident in Andalusia)

John was a retired British national living permanently in Marbella (Andalusia). He owned a villa valued at €400,000 and had €50,000 in a Spanish bank account. He passed away in 2023.

• The Will: John had wisely made a Spanish will choosing English law to govern his estate, leaving everything to his wife, Sarah.
• The Law: Because he chose English law, the restrictive Spanish "forced heirship" rules did not apply. Sarah inherited 100% of the estate.
• The Tax: Under Andalusian regional law, spouses benefit from a 99% tax reduction for inheritances under €1,000,000. After applying the regional allowances, Sarah’s final inheritance tax bill was virtually €0, paying only minor administrative and notary fees.

Example 2: Thomas (German National, Non-Resident, Property in Catalonia)

Thomas lived in Munich but owned a holiday apartment in Barcelona valued at €250,000. He died without making a Spanish will, and had no foreign will.

• The Law: Because there was no choice of law, German law applied to his estate as his habitual residence was Germany. Under German law, his wife and two children inherited the property in specific proportions.
• The Process: The family had to obtain a German Certificate of Inheritance (Erbschein), have it apostilled, translated, and presented to a notary in Barcelona.
• The Tax: Because the property is in Catalonia, Catalan tax rules applied. The heirs had to pay progressive Catalan inheritance tax. While Catalonia offers allowances, they are not as generous as Andalusia's. The heirs ended up paying approximately €4,500 in inheritance taxes, plus the municipal plusvalía tax.

6. Common Mistakes to Avoid

• Failing to make a Spanish Will: While a foreign will is legally valid in Spain, executing it involves expensive translations, apostilles, and bureaucratic delays. Having a separate Spanish will limited to your Spanish assets makes the process vastly cheaper and faster for your heirs.
• Ignoring the 6-month tax deadline: Many foreigners assume they can resolve the inheritance whenever they have time. Spanish tax authorities will automatically apply surcharges starting at 1% per month of delay, plus late-payment interest.
• Forgetting the Municipal Plusvalía Tax: When inheriting real estate, heirs often pay the main Inheritance Tax but forget the local town hall tax (plusvalía). This is a separate tax based on the increase in the value of the land and must be paid to the local municipality.
• Accepting an inheritance blindly: In Spain, you inherit both assets and debts. If the deceased had more debts than assets, you could end up paying their debts out of your own pocket. Always accept "under benefit of inventory" (a beneficio de inventario), which limits your liability to the value of the inherited assets.

7. Frequently Asked Questions (FAQ)

Is a foreign will valid in Spain?

Yes, a foreign will is valid in Spain under the Hague Convention, provided it is valid under the laws of the country where it was written. However, to use it in Spain, you must obtain an official translation by a certified translator and have the document legalized with an Apostille. This process is time-consuming and costly, which is why lawyers strongly recommend creating a separate Spanish will for your Spanish assets.

What happens to Spanish bank accounts when someone dies?

Upon notification of a death, Spanish banks are legally required to freeze the deceased’s bank accounts. They will not release any funds to the heirs until the formal inheritance deed (escritura) has been signed before a notary, the inheritance tax has been paid, and proof of payment is presented to the bank.

Can I refuse a Spanish inheritance?

Yes. If the deceased left significant debts, or if the inheritance tax is too high, you have the legal right to formally reject the inheritance (repudiación de herencia). This rejection must be done formally via a public deed before a notary.

What is the "Usufruct" (Usufructo)?

A usufructo is a very common concept in Spanish inheritance law. It gives a person (usually the surviving spouse) the right to use and enjoy a property (such as living in the family home) for the rest of their life, even though the actual ownership (nuda propiedad) belongs to other heirs (such as the children).

8. In Summary

• Choice of Law: Ensure your will explicitly states that you want the law of your nationality to govern your estate to avoid Spain's strict forced heirship rules.
• The 6-Month Rule: You have exactly 6 months from the date of death to declare and pay Spanish inheritance tax before penalties apply.
• Regional Differences: The tax you pay depends heavily on the autonomous community where the assets are located; some regions offer up to 99% tax relief.
• Get an NIE: All foreign heirs must obtain a Spanish NIE tax number before they can accept any inherited assets.
• Make a Spanish Will: It is the simplest and most cost-effective way to protect your heirs from administrative headaches in Spain.

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.