Inheritance Tax‏ in Spain

Many people have been in my office, asking me what happens when a person dies in Spain, as far as their assets are concerned. Some were inheritors and others were trying to make things as easy as possible for their heirs when the day finally comes.

For most people, they want to make things as easy as possible for their heirs and a Spanish Will is the first step in the process. Many people think about making a Will but never actually get round to doing one.

Whatever people say to you regarding these three possible situations, there is a simple solution. A client told me the other day that he thought that the Spanish government would take everything if there was no Will. This is not the first time I have heard this rumour and it is totally unfounded.

There are three possible situations:

  1. You have a Spanish Will
  2. You only have an English Will or
  3. You do not have a Will

1. The deceased person has made a Spanish Will

A. Some documents must be gathered

  • The original death certificate. If the testator died in Spain, we have to apply for a Spanish death certificate, but if the testator died in England, the death certificate will need the Apostille affixed (Hague’s Convention). It will also need to be translated by an official Spanish translator, or by the Spanish Consulate in England.
  • We also need to write to the “Registro de Últimas Voluntades” (Register of last Wills) in Madrid on your behalf so that they certify that a Will was made, that the Will in question was the last one and which Notary has the original documentation. Even if you already have a copy of the Will, we must write to the Register, so that they can certify that there is no other Will with a later date. Most solicitors have a collaborating firm lined up in Madrid to avoid the procedure by post which tends to be lengthy. In our case, we can obtain certification within two weeks.
  • Gather the original escrituras de compraventa (title deeds) and bank account details. If you cannot find the deeds, do not panic, a certificate from the property register can be obtained and will work just as well.
  • Your last Patrimonio declaration. If you have never made one, a written declaration to the effect of not having an estate worth more than 500,000 Euros.

B. You must have an acceptance document drafted, which must be signed in front of a Spanish Notary, exactly the same as when you are purchasing a property in Spain.

C. You then have one month to pay the inheritance tax or claim part or total exemption depending on your situation. The tax has to be paid in Madrid if both the deceased and the heirs are non-residents. If any of the people involved is a resident then one can present the forms at the local tax office. If the heirs are group 1 or 2 (spouses or direct descendants) there is a major benefit of Andalucían Jurisdiction (which you can only claim if the deceased or one of the heirs are residents in Andalucia and can prove it). The benefit consists of an exemption rate of 125,000 Euros for each heir instead of 16,000 Euros for each heir.

D. As soon as the Inheritance Tax has been paid or the exemption is claimed, you can go to the bank where the deceased person held his/her money and the bank will release the money to the person the Acceptance Escritura confirms has inherited.

When this is done, you must deal with whatever property you may have inherited. You must go to the property register and ask to register the Escritura of acceptance (In the same way one does when purchasing a property with the purchase escritura). It will take approximately one month for the register to be handed over to the registered title. After this deed is completed, plusvalia needs to be paid to the Town Hall to which the property belongs.

2. The testator has made a Will in England, which refers to his / her assets and properties worldwide

A. You must obtain the Grant of Probate in England. You must then get the Hague’s Apostille affixed and send it to an official translator in Spain, or to the Spanish Consulate in your home country. (If the English Will mentions the word “trust”, then you have a problem, as trusts do not exist in Spain).

B. You must take the same steps as if the translated document is a Spanish Will.

3. The deceased person has not made a Will.

A. If the deceased person is English, his heirs should appoint an English solicitor, who will need to obtain letters of Administration in England. You then need the Apostille affixed. Next, the document needs to be translated by the Spanish Consulate in England, or by an official translator in Spain.

B. Then we take the same steps, as if the translated document is a Spanish Will.

IMPORTANT THINGS TO REMEMBER

  • From the moment of death, the heirs have a maximum of six months to pay the death duties. If you do not think you can sort things out within that time limit, you can ask for a 6 month extension, but you must ask for it in writing, within the first five months.
  • Any document signed by an English public official will need the Apostille affixed before it is valid in Spain.
  • Any document that is written in English will need to be officially translated, before it is valid in Spain (Consulate or official translator).
  • The information I have provided is only a guideline and in no way substitutes my legal advice for your own particular situation.

There is no doubt that the best situation is to have a Will in your country of origin concerning your home assets and one in Spain for your Spanish assets. This will avoid a heavy legal bill later on and save a lot of time and distress.

In the absence of a last Will and testament, you will need judicial or notary documents declaring you are a legitimate heir and provide evidence of the laws of the late person’s country of origin in order to justify your claim to the inheritance. These documents, together with the rest of the papers required to formalize the inheritance, will then be taken to a Notary to allocate the inheritance.

By Raquel Perez

Perez Legal Group

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