Cross-border inheritance in Spain (for EU-citizens)

04/12/2020

Many EU-citizens don’t know that, in order to receive an inheritance in Spain, you need to sign a public deed before a Spanish notary.

One of the various reasons that a formal acceptance is required in Spain is the existence of inheritance tax. Therefore, the heirs choose to accept or reject an inheritance. If they accept, they are obliged to pay inheritance tax.

However, in this article we aren’t focusing on taxes but rather how the inheritance of non-Spanish citizens are regulated in accordance with the generic law of Spain. (There are several regions in Spain that have their own legislation regarding inheritance)

Due to globalization it’s very common that deceased persons have assets in several EU-countries or have lived regularly in several EU-countries. This is what we call a cross-border inheritance and the first thing to determine is which national legislation is applicable to the inheritance.

Which law applies to a cross-border inheritance?

Regardless if it’s an intestate and testate inheritance, it’s essential to know what law is applicable. Once we know which law is applicable we can also find out about the succession order, the right to the lawful share and the prescription of inheritance rights.

When it comes to those who have passed away before August 17, 2015, the national law that corresponds to the nationality of the deceased will be applied. But, for people who have died after August 17, 2015, the law corresponding to the country where the deceased last had its usual residence will be applied, or that of their nationality if they have decided so in a will.

In other words, if a Swedish person passes away in Spain in 2014, and she has lived there for 20 years, Swedish law applies to her inheritance. However, if that same person dies in 2016, that is, after August 17, 2015, without a will, Spanish law will apply since her usual residence will prevail.

Keep in mind that in Spain the generic civil law does not apply in all autonomous regions due to there are certain autonomous regions with regional legislation. These are Aragon, Catalonia, the Balearic Islands, Galicia, Navarra, the Basque Country and partially Valencia and Fuero de Baylío (Extremadura). In other words, it’s important to know where in Spain the deceased was living since regional law might be applied instead of the Spanish law.

As for inheritances according to Catalan law, you can read this article (link).

¿Who inherits first? – The succession order in the majority of Spain. (Keep in mind that Spain has 15 regions with regional laws, of which 7 have peculiarities in the inheritance law)

When someone dies without a will or with an invalid will, the Spanish civil code applies and the succession will be in a straight downward line. That is to say,

(1) children inherit from their parents
(2) In case they don’t have children, the succession will be in an ascending straight line, that is, the parents of the deceased inherit.
(3) In case there are no living children or parents, then the spouse will inherit.
(4) If there’s no spouse, then the inheritance will pass to the brothers or nephews.
(5) If there are no siblings or nephews, the inheritance will pass to the rest of the collateral relatives up to the cousins ​​(4th grade) and,
(6) if no one has accepted the inheritance including cousins ​​(4th grade), the inheritance will pass to the State of Spain.

The time limit for accepting inheritances in Spain is 30 years.

What happens if my father excludes me from the will and the Spanish civil code applies? – Testate inheritance and the right to the lawful share.

Certain persons cannot be excluded as heirs without there being a legitimate cause for disinheritance. These are the so-called forced or lawful heirs:

1. The children and descendants of their parents and ancestors.
2. In the absence of the above, parents and ancestors to their children and descendants.
3. lastly, the widows

The non-disposable lawful share of the inheritance is 2/3; that is, the testator can only freely dispose of 1/3 of the total inheritance.

If the deceased has left all his inheritance to a person other than the one in the succession order or to a third party, such as an association or a non-relative, then, according to Spanish general law,

• children can claim their right to its lawful share consisting of 2/3 of the inheritance
• if there are no children, the parents can claim its lawful share one consisting of ½ of the inheritance if there’s no widow, because if there were, they are only entitled to 1/3.
• widowers will always have a right to usufruct, right of use, of 1/3 of the inheritance if there are children and 1/2 if there are parents, but no children.

Keep in mind that the time limit to claim the lawful share according to Spanish law is 30 years. However, the time limit can be interrupted.

Do I have to pay inheritance tax in Spain if my EU-country´s inheritance law applies?

If you inherit a property located in Spain but you have never lived in Spain, you will have to pay inheritance tax corresponding to the Spanish property even though, for example, Swedish law applies to the inheritance. On the other hand, if Swedish law applies and there are no assets located in Spain, but you have your usual residence in Spain, you might have to pay taxes in Spain. However, the inheritance shall never be subject to double taxation.

Obviously, this article is not intended to be exhaustive but merely to offer a basic guide on cross-border inheritances, and we have had to exclude topics to keep this article relatively short. If you have any questions about cross-border inheritances, it would be our pleasure to assist you.