Avoiding problems with Spanish inheritance: tips to avoid traps
Owning a Spanish holiday home is great fun for all the family and the property is often passed down through the generations. Spanish inheritance laws are, however, different from those in the UK. Forced heirship rules apply and the procedure for dealing with Spanish assets adds a layer of complication to the administration of an estate in the UK. Difficulties can be minimised by careful drafting of the Will but the executors handling the UK probate need to be aware of the following practical points.
It is essential to check whether the deceased left a Will in Spain that may override any UK Will. A Spanish lawyer can make the necessary enquiries and deal with other formalities that arise. The Spanish lawyer will require an original death certificate and officially certified copies of the UK Grant of Probate and the Will, all bearing the Apostille of the Hague Convention (an English Notary can arrange this).
In Spain the heirs to an estate have six months from date of death to accept the inheritance and submit an inventory and valuations of the assets to the Spanish tax authority. These valuations will be used when calculating capital gains tax and the death duty payable on the Spanish assets.
This 6 month period for filing formal documents can cause problems if it is not possible to obtain an apostilled copy of the UK Grant within the timescale. To avoid penalties in Spain, we recommend making an application to extend the filing deadline by a further 6 months.
There are yet more hurdles for beneficiaries who are due to inherit the Spanish assets:
- in order to accept the inheritance, all heirs are required to attend the local civic office in Spain to sign the necessary documents; and
- all the heirs and all the Personal Representatives must apply for Spanish identity numbers (NIE numbers).
Alternatively, the heirs and personal representatives may appoint a Spanish lawyer to act on their behalf at the signing meeting and on the application for NIE numbers. The Spanish lawyer must be appointed as attorney by each heir and each personal representative to deal with the Spanish estate on their behalf in Spain. This attracts a cost, of course, but it is almost certainly less than the cost of flying everyone out to Spain to attend in person.
In addition to the cost of instructing the Spanish lawyer, other costs include Municipal Tax of Plusvalía, Notary fees and Registry fees.
Cripps Pemberton Greenish’s Estates team is experienced in administration of estates with an international element. We understand the issues and can refer matters to Spanish lawyers where necessary, both through direct personal contacts and through our international network MarcAlliance.
Our Advisory Group can help by drafting Wills which avoid the Spanish forced heirship rules and which minimise the number of beneficiaries who will inherit the Spanish estate, in order to simplify the process of accepting the inheritance.
If you would like to know more, please contact Chris Wilkinson on 01892 506247 or email firstname.lastname@example.org.