EDITION: October - December 2011


Texto: Anja Sämann-Gutschick y Armin Gutschick

When someone purchases a property in Ibiza, they rarely think of making a will. However, leaving one’s last wishes registered before a notary can avoid future disputes amongst the heirs.

When it comes to inheritances, it is often wondered which legal system they fall under, since that will determine who the heirs are. Spanish international private law establishes that, for foreigners, the laws of their country of origin should be applied. For example, if the deceased is a German citizen, his or her estate will be passed on according to German inheritance laws. However, some legal systems establish that the applicable laws are those where the property is located, and so, for properties in Spain, Spanish laws apply.

The question of which legislation should be applied comes up not only for foreigners but also for Spanish citizens, since there are different regulations in each Autonomous Community or Spanish region, and also some regions have their own code of ancient laws. Therefore, the answer to the question of who inherits will be different for someone from Madrid than for someone in Ibiza, since the Balearic Islands have their own inheritance laws and taxes upon them.

If there is no valid will, after a person’s decease the established legal succession procedure will begin, also called intestate succession. Therefore, if the person does not agree with the succession quotas that the law automatically establishes, they should make a will by which they can determine, within the limits of the applicable laws, who their heirs will be (although generally they cannot take away the legitimate portion that must go to natural or forced heirs).

Neither Spaniards nor foreigners with properties in Spain are obliged to make a will in this country. However, foreign owners are advised to make their last wishes known before notary in Spain, because that way the heirs will have less bureaucratic obstacles when changing over the title deeds to the heirs. In Spain, wills are notified by an authorized notary at the Central Registry of Last Wills (Registro Central de Ultimas Voluntades), whose main office is located in Madrid. In this way, one can rest assured that the latest will to be drawn up will be considered the valid one. 

If there is no Spanish will, it is essential to have an official declaration determining the heirs. Spanish law establishes that an heir needs to explicitly accept the inheritance, which is usually done with a notary’s deed.

As for inheritance taxes, the State treats residents and non-residents differently. For non-residents, taxes are high and corresponding tax rebates are insignificant. For Balearic residents, however, and subject to certain conditions, the succession tax may well be only 1% of the estate. The heirs need to present a declaration of succession taxes before the Spanish tax office (Hacienda) within six months after the decease. Missing this deadline will result in a penalty payment. There are double taxation treaties between Spain and other countries to avoid people being taxed twice; however, they often do not include succession taxes. Therefore, as a rule of thumb, there are taxes to be paid here in Spain even if there are also taxes due to another State.

In any case, it is most advisable that you get the advice of a professional before presenting your declarations. The succession taxes that non-residents in Spain must bear are amongst the highest in Europe. For this reason, in the past many non-residents would take advantage of the fact that in Spain the obligation to pay succession taxes expires four years and six months after the demise of the deceased. Nowadays, this option is practically closed to them, since the date for expiry does not begin to count until the moment the Spanish State has official knowledge of the demise. •