Interested in a self employment opportunity? Work With Us

Managing the sale of foreign property FAQs

Managing the sale of foreign property FAQs

Do you have assets (real estate, stocks and shares, vehicles, yacht, personal effects, jewellery, artworks in Spain)?

Have you thought what happens to these assets when you pass away?

Answer.It is advisable to make a Spanish Will, referring only to Spanish assets, in order to plan in advance who the beneficiaries will be and how much tax they will be liable for. Specific tax rules operate in each Autonomous Community and Local Council (Ayuntamiento), each case should be studied separately. For your Spanish Will our partners can provide you with clear estate planning advice, advice on tax minimisation and will writing services in English, in order for you to be compliant with Spanish laws…
If you own property in Spain we strongly advise you to make a Spanish Will, referring to your Spanish assets only. If something happens to you without having a Spanish Will in place, the execution of your inheritance in Spain can be time- consuming, complicated and expensive. Moreover, it will leave your heirs on their own to handle any additional difficulties that may arise when dealing with Spanish bureaucracy.
Spain operate a centralised registry for wills which are to take effect over Spanish assets. The Last Wills Registry, Registro General de Ultimas Voluntades, is where all Wills are registered, whether they have been signed in the UK before an English Notary, providing registration in Spain has been arranged, or in Spain before a Spanish Notary. Custody of the Wills is therefore secured against loss or destruction. When making a request to the mentioned institution we will always know if a Spanish will was made.
If you do not have a will in place, defining the applicable law according to European Union Rules that came into force on August 17th 2015, the applicable law for estates in Spain is the law of your habitual residence. If you, for example, have your residence in Mallorca your assets will be distributed based on the intestacy rules of Spanish Law in the region of residence. This brings into play a combination of forced-heirship rules and life tenancies for spouses. Again if you own property in Spain it is highly advisable to make a Spanish Will.
As a beneficiary of an estate with Spanish assets, prior to selling a Spanish property you must accept the Inheritance in Spain, before a Spanish Notary in a Public Deed, and pay the Inheritance Taxes to the Spanish Inland Revenue and Local Council (Ayuntamiento). A Treaty of Double Taxation, between the UK and Spain, applies. You will pay IHT (Inheritance Tax) over Spanish assets ONLY to the Spanish Tax Authorities, and NOT to the Inland Revenue for UK Inheritance Tax purposes.
In Spain, property ownership differs from the UK. When the spouses own half of the property jointly, if one passes away this does not mean that the surviving spouse will automatically inherit all the property. According to Spanish Law, before the remaining spouse can become the sole owner inheritance proceedings have to take place in Spain.
No. A Double Treaty agreement exists between the UK and Spain. Lawyers of both countries commonly work together in order to avoid to pay Inheritance Tax twice.
In 2015 the EU courts decided that Spain was discriminating other EU nationals and overcharging inheritance taxes from heirs who had their residency in other, non Spanish, EU countries. At that point heirs could not benefit from the same deductions as Spanish residents could. This discrimination ended in January 2016, but not without the Court of Justice of European Justice (CJEU) first having to hold a judgment on September 3 2014 (case C-127/12).
Apart from inheritance tax, depending on the Atonomous Community where the asset is located, the heirs shall pay a local tax called “Plusvalía” Tax based on the increase of value of the land from the day the deceased acquired the property up to the date of the death.
The costs to claim the inheritance are:
i. Notary fees: approx. 1.000 euros
ii. Registry fees: approx. 800 euros
iii. Bilingual Power of attorney and apostille: approx. £250
iv. Legal fees: estimated 1% of the inheritance. Minimum fee £3,500

We can help

Is this scenario familiar to you?

Might you or your loved ones have property in another territory?

Our links with professional partners in foreign countries enable us to work closely both with you and with professionals to ensure your property situation is managed closely.

Please get in touch to discuss your needs.