In an increasingly interconnected world, it is common for individuals to reside, invest, or maintain personal and economic ties across different countries. Spain, with its attractive real estate market and high quality of life, has become a frequent place of residence or investment for many foreign nationals. As a result, it is not unusual for a deceased person, whether resident or non-resident, to leave behind property, bank accounts, shares, or other assets located in Spain.
When this occurs, the heirs, often residing abroad, must deal with a cross-border succession process that involves Spanish law, international private law, and potentially the law of the deceased’s country of origin. Understanding how inheritance works in Spain is crucial to avoid delays, unexpected tax burdens, or legal disputes.
In this article, we explain how the inheritance of assets in Spain works when the heir is a foreigner. We explore which laws apply, how to manage inheritance procedures before a notary and the Land Registry, and what taxes must be taken into account if you inherit assets located in Spain. Whether you are an heir, an executor, or simply planning your estate, this guide will help you navigate the legal complexities of cross-border inheritance in Spain.
What law applies when a foreigner inherits in Spain?
When there is an international element involved (e.g., a foreign heir or a deceased person with assets in several countries), the first essential step is to determine the applicable law. In this regard, Regulation (EU) Nº650/2012 is fundamental. It governs international successions within the European Union (with the exception of Ireland and Denmark, which do not participate in this Regulation).
According to Article 21.1 of the Regulation, the law applicable to the entire succession is that of the country where the deceased had their habitual residence at the time of death, unless they expressly stipulated in a will that the law of their nationality should apply.
Example: A Swedish citizen who has lived in Alicante for the last years of their life dies without a will. Although their nationality is Swedish, the succession will be governed by Spanish law unless they had chosen in life to apply Swedish law.
What if national law is chosen?
Article 22 of the Regulation allows the deceased to choose the law of their nationality in their will. This choice is valid if expressly stated and in accordance with the formal requirements of the country whose law is chosen.
Choosing national law can have important implications. For example, many European countries allow full freedom to dispose of one’s estate, unlike Spain, where a portion of the inheritance, the “legítima”, must be reserved for forced heirs.
Therefore, estate planning through a will choosing foreign law can allow the testator more freedom to distribute their estate, provided that the choice is properly documented and recognized in Spain.
What happens if there is no will?
If no will exists, the law of the country where the deceased had their habitual residence will apply. If the deceased lived in Spain, Spanish Civil Code provisions will apply.
In these cases, foreign heirs must follow the legal distribution rules, which establish mandatory shares for children, spouses, and parents. These may differ significantly from the inheritance laws in countries with testamentary freedom.
It is essential to seek expert legal advice to correctly interpret these rules, especially in cases involving conflicts between different legal systems or assets spread across multiple countries.
Jurisdiction and the European Certificate of Succession
The Regulation also determines which courts have jurisdiction in case of disputes: generally, the courts of the country where the deceased had their habitual residence. However, if a different national law is chosen (e.g., German law), it is also possible to agree that the courts of that country shall have exclusive jurisdiction over the succession.
To facilitate succession procedures across EU Member States, the Regulation introduces the European Certificate of Succession (ECS), regulated in Articles 62 to 73. This document certifies the status of heir, legatee, or executor in any EU country, without needing legalizations or apostilles.
In Spain, the certificate may be requested before a notary or competent court and is very useful to prove inheritance rights over properties, bank accounts or other assets.
Procedures for inheriting in Spain as a foreigner
- Obtain a NIE (Foreigner Identification Number): The NIE is mandatory for any foreigner carrying out legal acts in Spain, such as accepting an inheritance. It can be obtained from the National Police or Spanish consulates abroad.
- Provide documentation of the deceased and the heir: To begin the inheritance process, you will need the death certificate, certificate of last wills, and an authorized copy of the will, if any. If the deceased did not make a will, a declaration of heirs procedure must be initiated, notarial if heirs are descendants, ascendants or spouse, or judicial in other cases.
- Formalize the deed of acceptance and distribution of the inheritance before a Spanish notary: This deed will detail the assets to be inherited (real estate, bank accounts, shares, etc.) and their allocation. It is essential to have a lawyer to advise on necessary documents, potential conflicts among heirs or creditors, and ways to reduce tax costs.
- Pay the Inheritance Tax (Impuesto de Sucesiones y Donaciones – ISD).
- Register inherited real estate with the Spanish Land Registry after paying the tax, by presenting the deed and proof of payment.
Registering inherited property in the Spanish Land Registry
Although asset distribution may be governed by foreign law, certain aspects, such as transfer of ownership or registration in the Land Registry, are subject to Spanish legislation.
To register inherited property in Spain, the following documents are usually required:
- The public deed of acceptance of inheritance signed before a Spanish notary.
- The will, if any, translated and legalized if made abroad.
- The European Certificate of Succession, if used.
- Tax documentation and evidence of compliance with the applicable law, including justification of the foreign law governing the succession (usually through an expert report or consular opinion).
Inheritance Tax in Spain for non-resident foreigners
One of the most complex aspects of international succession is taxation. In Spain, inheritances are subject to the Inheritance Tax (ISD), regulated by Law 29/1987 of December 18, and by regional regulations, as this tax is delegated to the autonomous communities.
Non-residents can benefit from the same allowances and reductions as residents, as long as they inherit assets located in Spain.
In the case of non-residents, the so-called real obligation applies: they are taxed only on assets located in Spain. The heir must file a self-assessment using Form 650 with the National Tax Management Office, and if they reside outside the EU or EEA, they must appoint a tax representative.
How is a foreign heir taxed?
It depends on several factors:
- If the deceased resided in Spain, the applicable rules are those of the autonomous community where the deceased had their habitual residence.
- If the deceased did not reside in Spain, but the inherited assets are located in Spain (e.g., a property), either the national rules or those of the region where the asset is located will apply.
Deadline to pay the tax
The general deadline to file and pay the Inheritance Tax is six months from the date of death, extendable by another six months if the extension is requested within the first five months. Failure to meet this deadline may result in interest and penalties.
Therefore, it is essential to plan the inheritance process carefully and obtain legal advice to navigate each step.
Practical recommendations for foreigners inheriting in Spain
- Don’t delay the process. Legal and tax deadlines begin running from the date of death, even if not all documents are ready yet.
- Seek a lawyer specialized in international successions. Legal advice in such cases is crucial to avoid costly mistakes.
- Check whether the will includes a choice of applicable law.
- Ensure that all foreign documents are translated and apostilled.
- Consider whether to accept or renounce the inheritance. In Spain, inheritance can be accepted purely and simply (with all assets and debts) or under benefit of inventory. The latter limits the heir’s liability to the value of the inherited assets and is advisable when the deceased’s financial situation is unclear.
- Check if you qualify for tax reductions or allowances. This can make a significant financial difference. Some regions, such as Andalusia, Madrid, or Valencia, apply reductions of up to 99% for certain heirs.
- Calculate the tax impact based on the region involved and submit Form 650 within the deadline.
In summary, inheriting property in Spain as a foreigner involves a complex process that combines different legal systems, notarial procedures, tax obligations, and property registration. Correctly identifying the applicable law, obtaining and legalizing documents, meeting tax deadlines, and registering inherited property are all essential steps that must be handled with care.
Having an expert lawyer in international successions and Inheritance Tax is the best guarantee to ensure the process is legally secure, efficient, and free from unnecessary tax burdens or delays.