Understanding the Spanish inheritance process

Talking about the Spanish inheritance process isn’t easy. Many people will try to avoid the discussion and, it’s understandable. However, avoiding it isn’t the answer. If you have property in Spain at some point in the future it will be transferred either through donation or inheritance. It’s most important that you take the initiative, explore the options and convey any decision you make to those who will be your inheritors. The first stage is to familiarise yourself with the basics of the Spanish inheritance process.

Inheritance in Spain

There is no automatic transfer of ownership when someone dies. Unlike in some other countries where a spouse, for example, automatically receives the inheritance, this is not the case in Spain. Even when the ownership of the property is shared, the legal transfer process must be followed.

Even though both names are on the Title Deed, the Spanish inheritance process requires that a new Title Deed is signed in front of a notary when one person dies. This is a formal process which must be proceeded by the payment of any Spanish inheritance tax that is due. This factor can come as an unpleasant surprise to your inheritors if they are not forewarned.

Payment of inheritance tax

Your inheritors may know that you are intending to bequeath your property to them if you have made a will in Spain. However, what they might not know is that they will have to pay any inheritance tax prior to the transfer of the property. This means that they cannot offset the costs with money they’ve obtained from the sale.

A property cannot be sold until the Spanish inheritance process has been completed and your inheritors must do this within a six month time frame or they have to pay additional interest on the amount owed. The Inheritance deed must be signed before a Notary and the inheritance tax must be declared. This change of ownership must then be registered with the Land Registry and IHT settled. Now, there can be completion on the sale of the property.

Your inheritors need to be aware of this even thought there might not be much inheritance tax to pay as there are allowances for family members. However, people who are used to a different system can be surprised to be faced with a bill when they are expecting to receive money rather than pay it out.

Wills in Spain

You may have made a will in Spain already. If you haven’t then we strongly recommend that you take this action if you want to be sure that your assets are passed on to the people that you wish to receive them.

Making a will in Spain enables you to look at options that can reduce the amount of inheritance tax to pay. You can reduce tax by spreading assets between more people, as each inheritor may receive a certain amount of property, tax free. There are also other alternatives such as donating your assets before you die with relevant tax allowances for family members in some areas of Spain.

A personalised assessment

You need to make sure that your inheritors are prepared by clarifying now what your situation is and the best way forward for you and your family. We can provide this advice whether you already have a will in Spain, have a will in your home country or don’t have a will at all. 

Our experts can help clarify the amount of tax that your inheritors are likely to pay. Our personalised assessment comes in an information folder which provides comprehensive and bespoke advice for you, your family and according to your individual circumstances.

We take into account, the location of your property and the relationships of those who are inheriting from you. The folder includes details of what inheritors have to do to proceed and enables them to prepare as much as they can for a time that is, at least, emotionally traumatic.

The assessment outlines the actions that you have taken and what inheritors should do next. It’s surprising how often people haven’t shared details, such as how to access their will in Spain or who they have trusted to carry out the Spanish inheritance process. Our information clarifies all this in a way that ensures as few problems as possible arise for those you love in the future.

Your personalised inheritance folder includes:

• _{Introduction and overview of the Spanish inheritance process}
• _{Outline of actions already taken e.g. making a will in Spain}
• _{Implications for inheritors according to current assets i.e. how much Spanish inheritance tax there will be to pay}
• _{Consideration of other options, such as donation}
• _{Information for inheritors about how to proceed in the event of your death}
• _{Outline of any next steps that need to be made}

For any assistance in the inheritance process please do not hesitate to contact us at legaldpt@abacoadvisers.com