International Inheritance in Spain: How to Avoid Legal and Tax Problems

International inheritances are not unusual. They are the reality facing thousands of foreign property owners on the Costa Blanca and across Spain who have never asked themselves what will happen to their home when they die, or what their heirs in the UK, the Netherlands, Belgium or Germany will need to manage when that moment arrives.

In this guide from Sol-4 Gestión, we explain what makes an international inheritance complex, which law applies to assets located in Spain, the most common mistakes and what concrete steps can be taken in advance to protect heirs from unnecessary complications.

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What Is an International Inheritance and Why Is It More Complex?

An international inheritance is one in which the deceased, the heirs or the assets are located in different countries. This situation affects three dimensions that are straightforward in a domestic inheritance but become genuinely complex in an international one:

• The applicable law: which legal system governs the succession? The law of the country where the deceased lived? The law of their nationality? The law of the country where the assets are located?
• Taxation: in which country or countries are taxes due? Is there a risk of double taxation?
• Documentation: death certificates, wills and declarations of heirs issued abroad need a sworn translation into Spanish and, as a general rule, an apostille to have legal effect in Spain; public documents from other EU member states are exempt from the apostille.

On top of these three complexities, there is the factor of time. In Spain, inheritance tax must be settled within six months of the date of death — and that deadline runs the same whether the heirs live ten minutes away or ten hours away by plane.

Which Law Applies to an Inheritance With Assets in Spain?

This is the first question to resolve, because everything else depends on it: who the statutory and forced heirs are, how much of the estate can be freely disposed of, whether Spanish forced heirship rules apply and how the assets are distributed.

The European Succession Regulation (EU 650/2012)

For deaths on or after 17 August 2015, Spanish authorities (notaries, land registrars and courts) apply EU Regulation 650/2012 to any cross-border inheritance, whatever the deceased’s nationality and even where the applicable law turns out to be that of a non-EU country (article 20). Its general rule is straightforward: the applicable law is the law of the country where the deceased was habitually resident at the time of death (article 21).

This means that if a British or Dutch citizen dies as a habitual resident of Spain, their estate is governed by Spanish law, including Spain’s forced heirship rules (legítimas). However, the Regulation allows an important exception: anyone, whether or not they are an EU citizen, can choose that the law of their nationality should govern their estate instead of the law of their habitual residence (article 22). The choice must be made in a will or other disposition upon death, either expressly or clearly demonstrated by its terms; making it in a will before a Spanish notary gives the greatest certainty. That choice can substantially change the outcome of the succession.

The Regulation applies to all EU member states except Denmark and Ireland, which have not adopted it.

Citizens of Non-EU Countries

Although the UK, the United States and Australia are not bound by the European Regulation, Spanish authorities still apply it to the estates of their nationals and residents (article 20). In practice, if the deceased was habitually resident in Spain, Spanish law applies unless they chose the law of their nationality in their will, an option also open to British, American and Australian nationals (article 22). If the deceased lived in a non-EU country, that country’s law applies in principle. But where that law refers the succession to real estate to the law of the place where it is located, as English law does, the Spanish property will be governed by Spanish law (renvoi, article 34). The heirs’ place of residence does not determine which law governs the succession.

In all cases, real estate located in Spain is subject to Spanish law as regards its Land Registry registration and the settlement of inheritance tax with the Spanish Tax Agency.

The Most Common Mistakes in International Inheritances

Not Having a Spanish Will

This is the most common mistake and the one with the most significant consequences. A foreign national with a property in Spain who only has a will drawn up in their home country forces their heirs through a longer, more expensive and more uncertain process.

Without a Spanish will, the heirs must produce the foreign will, apostilled and with a sworn translation, and prove the content of the applicable foreign law to the notary or land registrar (article 36 of the Mortgage Regulations). In many cases they must also coordinate documentation between two different notarial systems. If there is no will at all, a declaration of heirs is required. The Certificate of Last Wills is always needed, whether or not there is a Spanish will. A properly drafted Spanish will eliminates the vast majority of these complications.

In addition, if the testator wants their estate to be governed by the law of their nationality (EU Regulation 650/2012, article 22), they should state this expressly in the will. This option is open to any nationality, including British. Without that choice, the law of the country of habitual residence at the time of death applies.

Not Knowing About the Six-Month Deadline

Inheritance tax in Spain must be settled within six months of the date of death. If the heirs live abroad and have no legal representation in Spain, that deadline can be very tight: the NIE needs to be obtained, a bank account opened, foreign documents apostilled, a fiscal representative appointed and all documentation assembled before the Modelo 650 can be filed with the Tax Agency.

A further six-month extension is possible, but it must be requested within the first five months of the original period, and it carries late-payment interest from the end of the original six months until filing (article 68 of the Inheritance Tax Regulations). If the return is filed late without an extension, a surcharge of 1% plus a further 1% for each full month of delay applies, rising to 15% plus late-payment interest after twelve months (article 27 of the General Tax Law).

Failing to Value Assets Correctly

The inheritance tax base is calculated on the value of the assets at the date of death. Properties must be declared at least at their Cadastral reference value (valor de referencia); if the value you declare is higher, that value is used, and if the property has no reference value, the higher of the declared value and the market value is used (article 9.3 of Ley 29/1987). An incorrect valuation can cause problems with the tax authorities: the Tax Agency can review declared values, and a significant discrepancy can result in a supplementary assessment with late-payment interest and, where applicable, a penalty.

Not Checking for Debts or Encumbrances on the Property

Before accepting an inheritance, it is important to verify whether the properties have outstanding mortgages, unpaid community fees, overdue property tax receipts or any other charge that may transfer with the property. Accepting an inheritance without this check can turn an asset into a liability.

Overlooking the Municipal Capital Gains Tax (Plusvalía Municipal)

In addition to inheritance tax, inheriting urban property triggers the tax on the increase in value of urban land (plusvalía municipal), which the heirs pay to the town hall where the property is located. It must be declared within six months of the date of death, extendable to one year at the heirs’ request (article 110.2.b of the Local Tax Authorities Act). If the land has not increased in value since the deceased acquired it, there may be no tax to pay (article 104.5), but this must be evidenced.

Failing to Appoint a Fiscal Representative in Spain

Heirs who are not resident in another EU member state, or in an EEA state with mutual tax assistance arrangements, must appoint a person resident in Spain to represent them before the Spanish tax authorities, before the filing deadline ends (article 18.4 of the Inheritance Tax Regulations). This usually applies to heirs living in the UK. Failing to do so can stall or delay the process.

The Risk of Double Taxation

One of the main concerns for foreign heirs is the risk of paying tax on the same inheritance in two different countries: in Spain, on the assets located there, and in their country of residence, on the entire inherited estate.

Spain has inheritance tax treaties with very few countries, such as France and Sweden. There is no inheritance tax treaty with any of the countries Sol-4 Gestión’s clients most commonly come from (the UK, the Netherlands, Belgium and Germany). Spain’s treaties with these countries cover taxes on income and, in some cases, on wealth, but not inheritance tax.

In practice, many countries allow the tax paid in Spain to be deducted from the liability in the home country, which mitigates (though does not always eliminate) the double burden. Each case must be analysed individually, based on the legislation of both countries and the type of assets inherited.

Documentation Required for an International Inheritance in Spain

The core documentation required by the Tax Agency for the Modelo 650 in inheritances with an international element is the same as for any non-resident inheritance, with one important addition: documents issued abroad must be translated into Spanish by a sworn translator and, as a general rule, bear the Hague Apostille. Public documents from other EU member states, such as Dutch, Belgian or German death certificates, are exempt from the apostille; UK documents still need one.

The documents typically required are:

• Death certificate (apostilled and translated if issued abroad).
• Certificate from the Spanish General Registry of Last Wills (even if the result is negative).
• Will or declaration of heirs (apostilled and translated if issued abroad).
• NIE of the heirs.
• Nota simple from the Spanish Land Registry for any real estate.
• Bank certificates showing account balances at the date of death.
• Deed of inheritance acceptance or inventory of assets and heirs.

If the estate has been administered in another EU member state bound by EU Regulation 650/2012 and a European Certificate of Succession has been issued there, the certificate proves heir status in Spain and is a valid document for registering the property at the Land Registry (article 69 of the Regulation and article 14 of the Spanish Mortgage Act). It depends on where the succession is dealt with, not on the deceased’s nationality, and it cannot be issued in the UK.

How to Plan Ahead to Protect Your Heirs

An international inheritance does not have to be a problem for heirs if the property owner has taken the right steps in advance. The most effective measures are:

Granting a Spanish Will

This is the simplest and highest-impact step. A will drawn up before a Spanish notary allows clear designation of heirs, enables EU citizens to choose their national law, and makes the entire administration process significantly easier for heirs from day one.

Appointing a Legal Representative in Spain

Granting a power of attorney to a trusted lawyer in Spain means that the entire inheritance process can be managed in an orderly way and within legal deadlines, without heirs needing to travel for every procedure.

Planning the Structure of the Estate

In certain cases, the way in which assets are held in Spain (individual ownership, joint ownership, through a company) can have a meaningful impact on the tax burden of the inheritance. A prior review with a specialist adviser allows informed decisions to be made before the moment arises.

Checking the Legal and Registry Status of Properties

Before an inheritance occurs, it is worth confirming that properties are correctly registered at the Land Registry, that there are no hidden encumbrances and that all documentation is in order. Resolving a registry issue while the owner is still alive is incomparably simpler than attempting to do so during the administration of an estate.

Manage Your International Inheritance with Sol-4 Gestión

If you have inherited assets in Spain from abroad, or if you want to plan the transfer of your estate to protect your heirs, Sol-4 Gestión can help.

Through our inheritance services in Spain, we manage the entire process: from obtaining the NIE and power of attorney, to valuing the estate, filing the Modelo 650 with the Tax Agency, drafting the deed of inheritance acceptance and registering the change of ownership at the Land Registry. We also act as fiscal representatives in Spain for non-resident heirs.

We have been working on the Costa Blanca with foreign property owners for over 25 years and have in-depth experience with the specific documentation, legal systems and tax considerations that arise in international inheritances from the UK, the Netherlands, Belgium and Germany.

We work in English and Spanish, and can also assist you in German.

Tell us about your case.

Frequently Asked Questions About International Inheritance in Spain