INHERITANCE MATTERS AND DEATH DUTIES FOR BRITISH PASSPORT HOLDERS LEAVING PROPERTY IN SPANISH TERRITORY
The main difference between British and Spanish rules is that Spain does not accept the concept of the “estate” of the deceased being taxed, in Spain the BENEFICIARIES of the deceased are individually taxed and importantly NONE OF THE DECEASED PROPERTY CAN BE DISPOSED OF UNTIL THE TAX IS PAID.
This is a complicated process and you may well decide to appoint a professional to help rather than try and deal with the matter yourself. We can help with the entire process from start to finish to take away all the stress. If you need assistance just send us an email on email@example.com or WhatsApp 0034 659 719 695.
- Obtain a Death certificate. If the person passed away here in Spain then its obtainable from the Registro Civil (the funeral home will provide you with several copies) you can obtain copies just valid here in Spain (certificado literal) and international copies that are valid internationally. If the person passed away outside of Spain, we shall use the UK for the example, then a legalised copy of the death certificate is required with the Apostille from the UK Foreign Office in London and an official translation of said document is required.
- UK Probate Certificate is required, if the deceased person passed away in the UK. An original and legalised copy with the Apostille from the UK Foreign Office in London and an official translation of said document is required.
- Spanish Will. Get an authenticated copy of the Spanish Will from the notary as all Spanish Wills are registered in the Spain will registry. If only a UK Will is available the original legalised copy with the Apostille from the UK Foreign Office in London and an official translation of said document is required. If the deceased was a Non Fiscal resident in Spain and/or no Will is available at all, then a UK Probate letter of administration legalised copy with the Apostille from the UK Foreign Office in London and an official translation of said document is required.
- Certificado de Últimas Voluntades – Certificate of Wills issued. This is a document issued by the Registro de Gerencia Territorial de Justicia in Santa Cruz de Tenerife, it is to confirm officially the last Will status, this has to be applied for even if it is negative. You can apply on the link highlighted before.
- Certificado de contratos de seguro de cobertura de fallecimiento – Certificate of life insurance cover. This is a document issued by the Registro de Gerencia Territorial de Justicia in Santa Cruz de Tenerife, it is to confirm the policies held by the deceased at the time of death. You can apply on the link highlighted before.
- Documentation of the assets owned in Spain – originals of;
- The Escritura (deeds to the property in Spain) plus current valuation.
- Proof of payment of IBI (rates) last receipt.
- Proof of payment of Non-Residents deemed income tax – last 4 years returns, modelo 210
- Letter from the banking institution of all bank accounts in Spain stating the balance of the account(s) as at the time of death. (Please note that the account is frozen by the bank once this certificate is issued and no money can be taken out of the account other than standing orders).
- Original documentation of any vehicle or vessel registered in the Canary Islands in the name of the deceased plus official current valuation(s).
- Documentation of the Beneficiaries of the will –
- NIE certificate – Foreigners fiscal identity number (if they don’t have one it must be obtained before starting the process).
- Full names, Fiscal Addresses and copies of passports.
- % split between beneficiaries.
- Statement of pre-existing wealth (in the Canary Islands) of each of the beneficiaries.
- Escritura de aceptación y adjudicación de herencia – Each beneficiary needs to swear a deed of acceptance of inheritance in front of a Spanish Notary OR obtain a Spanish Power of attorney or UK POA, with the Apostille from the UK Foreign Office in London and an official translation of said document, to authorise another to do this on their behalf if not coming to Spain to sign the document themselves.
- Inventario de Bienes y Herederos– Submit an inventory of assets and inheritance tax returns for each beneficiary to the Spanish tax office in Madrid if the deceased was NON Fiscally Resident in Spain or to the Canarian Tax Office if they and the beneficiaries were/are Fiscally Resident here. You have to pay the inheritance tax within six months after the date of demise otherwise a surcharge will be imposed. All original documentation has to be enclosed.
Once the inheritance is completed:
Whatever the inheritance tax amounts to, once it has been paid and documents returned, you will be required to:
- Change over the deeds at Land registry – their charges are approximately the same as the Notary’s.
- Pay the plus valía tax on the increase in the value of the land since the time it was purchased by the deceased.
- Change the bank accounts over or close them.
- If any vehicles are involved the ownership details must be changed at Trafico in Santa Cruz.
- Utilities etc can be changed to the beneficiaries (new owners) of the property.
The information below is intended as a guideline ALWAYS check with the Spanish Tax authority for current rates and amounts
Pre-existing wealth Multiplier
|€||Classes I and II||Class III||Class IV|
|Up to 402,678||n/a||1.5882||2.0000|
|2,007,380 – 4,020,770||1.1000||1.7471||2.2000|
The relationship between the deceased and the beneficiaries play a big part in the tax applied.
There are different categories of beneficiaries when calculating Inheritance Tax:
|Relationship to deceased||Reduction allowance in euros||Non fiscally resident heirs|
|Children under 10||138,650.00||
15,956.87 plus 3,990.72 euros for every year under 21
up to a maximum of 47,858.59 euros
|Children 21*+ and Adopted children||23,125.00||15,956.87|
|Rest of descendants/ascendants or adoptive parents||18,500.00||15,956.87|
|Group III Brothers, sisters, nephews, nieces, uncles,
aunts and in-laws
|IV Anyone else. This includes unmarried partners
unless there is acceptable and substantial proof of a
long term cohabiting relationship.
|Assets up to the value of:||Tax rate applied:||Cumulative tax|
Differences for the Canary Islands
In 2008, the autonomous regional government of the Canary Islands granted Spanish fiscal residents a 99.9% reduction to the inheritance tax due on bequests to close relatives (parents, children, spouses and family partners). This was abolished in April 2012 as a result of the economic crisis but it was reintroduced in January 2016.
Under the re-introduced scheme, the reduction is available for both fiscal residents and non fiscal residents on bequests and gifts of property or assets located in the Canary islands IF made to closest relatives, i.e. those in the first two groups, eg spouses, children and other descendants (i.e. grandchildren, etc.) and parents and other ascendants (i.e. grandparents), as long as non-fiscally resident heirs reside in another EU country. For these groups it applies to both inheritances and lifetime gifts, but for gifts the donation has to be completed using a public deed.
From 1 January 2019, this 99.9% relief has been extended to Group III beneficiaries. Group III includes brothers and sisters, nephews and nieces, cousins, and aunts and uncles. It can also include some in-laws and step-children in certain circumstances, but this has to be reviewed on a case-by-case basis.
Note that for Group III beneficiaries, the relief only applies to inheritances; it does not apply to lifetime gifts
The fact that applying the 99% reduction discount for non-fiscal-residents in Spain who ARE fiscally resident in the EU, is governed by EU non-discrimination regulations will mean that those who are fiscally resident in the UK are unlikely to benefit from this once the UK has left the EU, unless some subsequent agreement is negotiated. The problem is any new treaties are likely to be drawn up between the UK and Spain – and the 99% discount is within the remit of the Canarian Government, not the Spanish State, so it is possible that UK fiscal residents will end up paying the full amount, no longer being protected by the EU regulations.
This is a BASIC check list we would strongly advise that you get information on your specific circumstances. We can help with the entire process from start to finish to take away all the stress. If you need assistance just send us an email on firstname.lastname@example.org or whatsapp 0034 659 719 695.