The law of inheritance differs significantly from country to country. Subsequently, every resident is advised to seek a lawyer’s advice in order to avoid unnecessary cost and problems with local authorities.
The following summarized and simplified information does not claim to be complete or replace professional advice, but rather should serve as food for thought.
1. Which law regulates my inheritance?
Until august 2015: Independently of the country of residence of both the testator and the heir the law of the citizenship of the testator’s country applies.
Since august 2015: The law of the country chosen by the testator, which can be either their native country or their country of residence. In case they don’t have a last will, thus not chosen a country, the laws of the country of residence apply.
2. Who inherits if there is no will?
Normally, the lawfully heirs inherit. Are there none, all goes to the country of nationality of the deceased independently of their place of residence.
3. Who are heir apparents?
In most cases: legitimate or illegitimate descendants (children, grandchildren), parents, siblings (and their descendants); the surviving spouse, other relatives graded by degree of relationship.
4. Which documents do I need for acceptance of an inheritance?
Depending on your nationality you usually need:
1. Death certificate
2. opened notary testament or inheritance contract
3. Certificate of inheritance
4. Tax number
5. Copies of an ID the heirs and the deceased
ATTENTION: A notarial acceptance of inheritance is required for real estate.
5. What to do if the inheritance might be indebted?
Some inheritances are a curse that can ruin the heir since not only assets are passed on but also liabilities (debts, missing tax returns…). Not to forget the more often than not high inheritance tax.
In Spain it is necessary to explicitly accept the inheritance to really inherit. In other countries you have to explicitly deny the inheritance during a given statutory period. Therefore, in case you do not want to come into inheritance, you might need to issue an official document during a certain time span.
In any case, make use of all legal possibilities and seek a lawyer’s advice.
6. How much inheritance tax to pay in Spain?
If they were Spanish residents all assets of the testator are due to inheritance tax in Spain. If they were not, only the Spanish assets will be taxed. The inheritance tax declaration must be presented and paid within a statutory period after the death of the testator.
The tax allowance in Spain is around 16.000 Euros for descendants, spouses, and parents. For other relatives there is a smaller tax allowance. For others there is no tax allowance. In case the heir already owns property in Spain worth more than 400.000 Euros a higher tax will be applied. Heirs under the age of 21 years benefit from reductions.
ATTENTION: These taxes will never lapse. To register or sell an inherited property it is inevitable to pay these taxes. If not paid in a timely manner interests, surcharges, and even seizures can be expected.
7. Where do I have to pay the inheritance tax?
If a non-Spaniard without residence in Spain leaves Spanish banking accounts and property, only these will be taxed by the Spanish Tax Office (limited tax liability), and in the home country the whole inheritance would be taxed (unlimited tax liability). With permanent residence in Spain, this would be reversed.
In most cases inheritance tax paid in Spain will be set off upon request. Due to the high Spanish inheritance tax, rarely inheritance tax is paid in the heir’s homeland.