How Spanish inheritance works when beneficiaries live abroad
Dealing with an inheritance is rarely simple, and when it involves assets in another country, it can quickly start to feel overwhelming. There’s paperwork, legal jargon, tax rules, and deadlines to manage, often in a language you don’t speak and under a system you don’t fully understand.
If the inheritance is in Spain, things can get even more confusing. You might be wondering which country’s laws apply, how the Spanish inheritance tax works, or what you actually need to do from the UK or elsewhere to get everything sorted.
The good news is you don’t have to figure it out alone. In this guide, our English-speaking Spanish solicitors explain how the process works when you’re inheriting from abroad, covering which law applies, how the taxes are handled, and the steps to take to make sure everything runs smoothly.
Which law applies to a Spanish inheritance
When someone passes away owning property or savings in Spain, one of the first questions families ask is which country’s law governs the inheritance. It’s an understandable concern, especially when the deceased lived part of their life abroad or had assets in more than one country.
Under EU Regulation 650/2012, also known as the Brussels IV Regulation, Spain applies the law of the deceased’s habitual residence rather than the nationality of the heirs. This means that if your loved one was living permanently in Spain at the time of their death, Spanish inheritance law will likely apply to their estate even if they were not Spanish citizens.
If the deceased lived abroad but owned property in Spain, Spanish law only applies to the assets located in Spain, such as a villa, apartment, or bank account. Everything else will follow the law of the country where they were resident.
It’s also possible for foreign nationals living in Spain to choose the law of their nationality to apply to their estate, but this must be stated explicitly in a Spanish will. Without that clause, Spanish law applies automatically.
How Spanish inheritance tax works
Once the applicable law is clear, the next step is to understand how the inheritance tax is applied. Spanish inheritance tax, known as Impuesto sobre Sucesiones y Donaciones, is calculated very differently from the UK system.
In Spain, the tax is paid by each individual beneficiary, not by the estate as a whole. This basically means that if several family members inherit assets, each person is responsible for their share of inheritance tax based on the value of the assets they receive and their relationship to the deceased.
Spanish residents are taxed on their worldwide inheritance, while non-residents, including those living in the UK, are taxed only on assets located within Spain. So, if you inherit a Spanish property from a parent who lived in another country, you’ll pay inheritance tax only on the Spanish property, not on assets held elsewhere. Although this system can seem complicated at first, it makes sure that the tax you pay is only proportional to the share of the inheritance you receive.
Tax rates and regional differences
Inheritance tax rates in Spain vary depending on several factors, including the value of the inheritance as we just discussed, your relationship to the deceased, and the region (autonomous community) where the assets are located.
Spain’s 17 regions each set their own allowances and reductions, so the amount due can vary widely from one area to another. In regions such as Andalusia or Madrid, close family members, including children, spouses, and parents, often receive very generous reductions, sometimes up to 99%, meaning many families pay little or no inheritance tax.
Following a 2015 ruling by the European Court of Justice, non-residents from other EU and EEA countries can access the same regional tax benefits as Spanish residents. This was a major step in making the system fairer for families who live outside Spain but inherit property there.
For beneficiaries living outside the EU, reliefs and deductions can still apply, though they may differ depending on the specific circumstances. If you’re unsure whether you’re entitled to a deduction, one of our English-speaking Spanish lawyers can calculate the likely tax due and make sure that the correct regional allowances are applied.
Will you have to pay tax twice?
A common concern we hear among beneficiaries living abroad is whether they’ll be taxed twice, once in Spain and again in their home country, and fortunately, this doesn’t happen often.
While Spain and the UK don’t technically have a dedicated inheritance tax treaty, both countries provide foreign tax credits to prevent double taxation. In practice, this means that if you pay inheritance tax in Spain, you can usually offset that amount against any tax you might owe at home.
That said, the rules can be complex, and the reporting requirements differ between countries. It’s important to get advice from both a Spanish inheritance solicitor and a local tax adviser in your home country to make sure you meet all legal obligations and avoid paying more tax than necessary.
The inheritance process for beneficiaries living abroad
If you’ve inherited property or other assets in Spain, there are a few essential steps you need to follow before ownership can be legally transferred into your name. While it may sound complicated, much of the process can be managed remotely by one of our English-speaking Spanish solicitors, so there’s no need for you to travel.
First, you’ll need to obtain the death certificate and, if available, the Spanish will. If your loved one did not have a Spanish will, the estate will be distributed under Spanish intestacy rules, which determine who inherits based on family relationships.
Each heir must then get a NIE (Número de Identificación de Extranjero), which is a foreign identification number required for all legal and financial matters in Spain, including inheritance.
The next step is to formally accept the inheritance before a Spanish notary. If you live abroad, one of our solicitors can do this on your behalf using a power of attorney. Once the inheritance has been accepted, inheritance tax must be paid within six months of the date of death. It’s possible to apply for an extension if you need more time.
Finally, the property or assets are transferred into the beneficiaries’ names and registered with the Spanish Land Registry or relevant financial institutions. Again, a member of our expert probate team can handle each of these steps, so everything is completed correctly and within the required timeframe.
Why does it help to have an English-speaking Spanish solicitor?
Managing an inheritance from abroad can be stressful, especially when you’re faced with an unfamiliar legal system and deadlines that can’t be missed. Working with an English-speaking Spanish lawyer ensures you have someone who can explain the process clearly, handle the paperwork on your behalf, and communicate directly with Spanish authorities and notaries.
At Gascón Bernabéu, we specialise in assisting international clients with Spanish inheritance and probate matters. Our bilingual team provides clear, practical advice on everything from determining which law applies to calculating and reducing inheritance tax.
If you’re inheriting property or assets in Spain and live abroad and would like some help, our English-speaking solicitors are here to guide you every step of the way, making sure everything is handled efficiently, correctly, and with full transparency.
To speak with a member of our team, you can fill in the contact form on our website, email info@gbabogados.co.uk, talk to us on WhatsApp or call +44 (0)20 3137 1320 for a no-obligation consultation.