Owning a property in Spain often begins with excitement. A retirement plan, a family holiday home, an investment for the years ahead. Unfortunately, it is often only after someone dies that families discover owning property in another country creates legal and administrative issues they had never anticipated.
Consider a straightforward scenario. A couple in their sixties buy an apartment on the Costa del Sol. They have Wills in England leaving everything to each other and, in due course, to their two children. Neither Will mentions Spain, and neither of them has taken separate advice about how Spanish law treats their property. When the husband dies unexpectedly, his widow assumes the English Will will simply take care of things, in Spain as much as anywhere else. It does not work quite that way.
Which Country’s law applies?
Many people assume an English Will automatically deals with everything they own worldwide, including a Spanish apartment. While it may form part of the process, Spanish authorities still have their own legal requirements before property can be transferred, and it is these requirements that catch families like hers off guard.
Since 2015, succession involving property in an EU member state has been governed by the EU Succession Regulation, commonly known as Brussels IV. The default position under this Regulation is that the law of the country where the deceased was habitually resident at death governs the whole estate, including any immovable property abroad. For a couple who split their time between England and Spain, or who had begun to spend most of the year in Spain, this default position can produce a result nobody intended. Depending on the applicable Spanish and regional succession rules, children may be entitled to a reserved share of the estate regardless of what the family assumed would happen. The widow, who expected to inherit the apartment outright, may find instead that a share of it is legally reserved for her children.
Brussels IV does allow an individual to elect, through their Will, for the law of their own nationality to apply instead. An English person can specify that English law should govern their Spanish assets, which restores the freedom to leave everything to a spouse if that is the wish. This couple’s Wills made no such election, because neither was drafted with Spain in mind. Without it, the question of which country’s law applies becomes something a Spanish notary, and potentially both English and Spanish lawyers, now have to establish after the fact, rather than something settled clearly in advance.
It is worth pausing on one point families often ask about at this stage. Having a Spanish Will does not automatically avoid Spanish forced heirship, nor does it usually replace an English Will. Instead, the two are often drafted to work alongside one another, each dealing with assets in the relevant country. Where the Spanish Will also includes an appropriate choice of law election and clearly sets out how the Spanish assets should pass, much of the uncertainty facing families like this one can often be avoided.
Spain still has its own process
Even where an English Will is valid and can be relied on in Spain, it does not remove Spain’s own documentary, notarial, tax and registration requirements. Spanish authorities maintain a central record showing whether someone made a Will before a Spanish notary and where the latest Will can be obtained, and this record has to be checked before anything else proceeds.
Obtaining a copy of the Will can take time. The known beneficiaries, or a close family member, will usually need to attend the Spanish notary where the Will was signed and provide evidence of their legitimate interest in receiving a copy. If they cannot attend in person, a legal representative with formal authorisation may be able to obtain a certified copy on their behalf.
Any heirs who do not already have an NIE, the Spanish tax identification number, would need to obtain one before the inheritance could be completed. In this example, the widow is likely to already hold an NIE from when the couple bought the apartment, but the couple’s children would probably need to apply for their own. Where the deceased died intestate in relation to the Spanish estate, meaning there is no effective Will dealing with the Spanish assets, a Spanish notary would also need to complete a formal declaration of heirs before anyone could inherit. All of this brings additional time, documentation and professional costs, and all the while the six-month inheritance tax deadline is quietly approaching in the background.
Throughout this period, bank accounts held in the deceased’s name may remain blocked while the inheritance is being dealt with. The position for jointly held accounts will depend on the bank’s requirements and how the account is owned. The family will generally be unable to sell the deceased’s interest in the apartment until the inheritance has been formally accepted and the necessary Spanish procedures completed, and community fees and local property tax continue to accrue regardless. The widow and her children, who had planned to sell the apartment quickly and divide the proceeds, could instead find themselves unable to deal with it for many months, watching costs mount on a property none of them can yet call their own.
The tax deadline doesn’t wait
Even while the paperwork is still being gathered, another deadline has already started running. Spanish inheritance tax, known as Impuesto sobre Sucesiones, must be filed within six months of the date of death, with a possible six month extension if requested within the first five months. This deadline applies whether or not the succession process itself has been resolved. The amount payable, and the allowances available, will depend on matters including where the property is situated, the heirs’ relationship to the deceased and the relevant regional rules. The widow, still waiting on a declaration of heirs, still gathering apostilled documents and still working out which country’s law applies to her husband’s estate, could easily find the tax deadline arriving before the practical steps are complete. Missing it brings automatic surcharges that increase the longer the delay continues. None of this is a penalty for wrongdoing. It is simply what happens when a process designed to run in a fixed number of months is started late, because nobody realised it needed to start the moment her husband died.
In addition, where the estate includes real estate, heirs should also be aware of municipal capital gains tax, which is subject to the same six-month deadline. If an extension is requested for Spanish inheritance tax, this tax should also be considered, and a separate request may need to be submitted to the relevant local town hall.
How planning can change the outcome
None of these problems are inevitable. Proper planning removes many of these obstacles before they ever arise. A carefully drafted Spanish Will, containing an effective choice of law and setting out the intended succession clearly, can work alongside an English Will rather than replacing it. An express Brussels IV election provides certainty over which country’s succession law applies, so a spouse’s position is settled long before it is ever tested. A Spanish Will made before a notary will be recorded in Spain’s General Register of Wills, while obtaining suitable advice in advance means the family knows whom to contact and what documents will be required. A Spanish Will does not require travel to Spain; it can be signed before a local notary public near you. After the death, the heirs may also be able to grant a Spanish lawyer power of attorney to complete much of the administration on their behalf, since any power of attorney the husband himself had granted during his lifetime would have ceased to be effective the moment he died. Had this couple taken specialist advice before buying the apartment, the administration of the estate would almost certainly have been more straightforward for the widow left to deal with it.
For many British owners, a home in Spain is one of their most valuable assets. Making sure it can pass in accordance with your wishes, without unnecessary delay, uncertainty or expense, is not about expecting the worst. It is about ensuring that, if the unexpected does happen, your family spends their time supporting one another rather than trying to untangle two legal systems at once.
