Wills and Inheritance

Preparation of a Will for a foreign client who owns property in Spain always involves complex considerations as to which law should be applied when it comes to winding up the estate. Domicile, nationality and the location of the property will be relevant and some rules may prevent the Testator from disposing of his estate as he wishes.

When it comes to investing in property in Europe, Spain has been on the top of the list for nearly thirty years . This means that over the years more and more people are finding that they are the lawful heir to some Spanish assets.

Suddenly people who may, or may not, have set foot in Spain are called to inherit in Spain. Not only have to face the loss of a family member, they are also confronted with a completely alien burocracy in a language they don’t understand: The law is different, the tax system is different …Your local Solicitor will understand the local system but probably won't be able to understand the way in which that system interacts with the system in your country. As a result, you can waste a lot of money or pay far too much tax.

We can handle the inheritance for you from start to finish anywhere in Spain. We can handle it regardless of the existence or not of a Spanish Will, and even if no Will exists.

We deal with the administration of estates where the deceased owned property in Spain and whether or not a Will has been made. We prepare all the requisite Spanish documentation in England and handle the complex tax and other problems that often arise.

Once title to the assets has been transferred to the beneficiaries, we advise and assist with their realisation and the transfer of the proceeds to the UK.

Inheritance tax is a huge concern for anybody who owns property in Spain.

Expats resident in Spain and paying tax are liable to pay Spanish Inheritance tax regardless of the country in which the inheritance is situated. Non-residents are liable to pay Inheritance Tax in Spain only on assets which are physically located in Spain. There is no exemption on inheritance tax in Spain.

Inheritors fall into four categories with certain allowances:

Group 1: Descendants and adopted children under 21. The older the child, the more tax to pay.

Group 2: Descendants and adopted children over 21, spouses, parents and adoptive parents.

Group 3: Brothers/sisters, nephews/nieces, aunts/uncles.

Group 4: Relatives in forth degree or friends (No allowances).

Once the allowances have been deducted the Tax authorities apply certain tax rates on the remainder of the inheritance.

There are a few ways to minimise IHT:

• Buy jointly with future inheritors
• Sell the property to future inheritors either fully or partly.
• Take out a mortgage loan on the property.
• Organising life insurance ensuring adequate funds to cover the Inheritance Tax bill.
• Buying or owning through a Spanish limited Company
• Buying or owning through an EU company

Again, this is a very basic but uncomplicated guide to Inheritance Tax. For a more in-depth guide, please contact us. 

In Spain you cannot legally buy property, a house, car, boat etc without having applied to the police for your NIE number and had your NIE documentation returned. Likewise, you cannot enter into a contract for the supply of electricity, water or a telephone line etc without giving your NIE/NIF number together with your bank details because these services will only accept clients whose bills are paid automatically from a bank. Neither can you arrange an insurance policy or order goods or services, sign on for the National Social Security, Health Service or commence a job without showing your NIE number.

The Decree (Real Decreto 338-1990) of 9th March establishes that everyone, of whatever nationality, resident or not, who has any "official business" in Spain, must have a fiscal number (NIF/NIE) which is used to identify them on all official documents.

NIE (Número de Identificación de Extranjero): This is every foreigner’s identification number in Spain and it is required in order to file taxes, establish a business, open a bank account (not necessary for foreign accounts), and for almost any other form you will have to fill out. Both EU citizens and non-EU citizens get issued an NIE.

DNI (Documento Nacional de Identidad): This is the ID number for Spanish citizens. The same number is used for the Spanish driver’s license.

NIF (Número de Identificación Fiscal): This is the tax ID number for all individuals. For Spaniards, it’s the DNI plus one letter; for foreigners, it’s the same number as your NIE. Once you have an NIE, you do not need to re-apply for an NIF; if and when you have to pay taxes, use your NIE number. If you’re a nonresident who has to pay taxes in Spain, you may get an NIF issued to you without having an NIE. This, of course, does not mean you get automatic residency in Spain, nor will it make it any easier to get residency.

CIF (Certificado de Identificación Fiscal): This is the same as the NIF, but for companies.

Social Security Number: If you intend to work in Spain, your employer will apply for your social security number when you start your first job. This number will stay with you for all subsequent jobs. If you are intending to be self-employed, you apply for this number yourself.

Once you know what the procedure is obtaining your NIF number is little more than queuing.

The Decree (Real Decreto 338-1990) of 9th March establishes that everyone, of whatever nationality, resident or not, who has any "official business" in Spain, must have a fiscal number (NIF/NIE) which is used to identify them on all official documents.

Spanish law states very clearly that the person must apply for the documents in person. However, the Spanish law also clearly states that a legalised, Spanish power-of-attorney document enables any individual to be represented by another for all legal purposes in Spain (as long as it is declared as such within the power-of-attorney).

However, regardless of the clearly stated laws, many local branches of the national police throughout Spain, choose not to allow this which is why some lawyers are unable to act on your behalf for this purpose.

Once we have received your documents (POA and copies of passports - both legalised) the NIE number is obtained within 2 weeks. Prior to sending the documents to us, they must be notarised (by a Notary Public in your area) and then stamped with the Hague Apostille.

A Power of Attorney is a document that is legally binding and grants an individual (or group of individuals) the right to act on behalf of a person for the stipulated tasks or responsibilities that are outlined within the Power of Attorney itself.