Inheritance with assets abroad: what to do and how it is taxed

Since 17 August 2015, Regulation (EU) 650/2012 (the European Succession Regulation) applies. As a general rule, the whole succession (who inherits, forced heirship shares and distribution) is governed by the law of the country where the deceased was habitually resident at the time of death, not by their nationality nor by where the assets are located.

There is one important exception: the deceased may have chosen in their will (professio iuris) that their estate be governed by the law of their country of nationality. It is worth checking whether that choice was made.

Note a key nuance: the Regulation decides the civil law side (who inherits and how much), but NOT the tax side. Each country applies its own inheritance tax with its own rules, so you may have to file in more than one State. Denmark and Ireland do not apply the Regulation.

What matters is where the heir lives. If you live in Spain, you are taxed on an unlimited basis (obligación personal): on everything you inherit, wherever it is (worldwide assets). If you are a non resident, you are taxed on a limited basis (obligación real): only on assets and rights located in Spain or exercisable there (for example, a property or a bank account in Spanish territory).

Inheritance tax is a tax ceded to the autonomous regions: when the deceased was resident in Spain, the administration of the tax and the rules that apply are those of the autonomous region where they lived. In non resident estates, by contrast, the administration is state level and is not ceded: modelo 650 is filed with Hacienda (AEAT, the Spanish tax authority) through the Oficina Nacional de Gestión Tributaria, online or by lodging it at a public register office. The deadline is 6 months from the date of death.

Every heir, including foreign nationals, needs a NIF or NIE (the Spanish tax and foreigner identification number) in order to settle the tax and register the assets in their name.

Yes. The judgment of the Court of Justice of the European Union of 3 September 2014 (case C-127/12) held that it was discriminatory to prevent non residents from accessing the regional reductions and allowances, which are usually far more favourable than the state rules. Ley 26/2014 (a Spanish tax reform act) amended the second additional provision of Ley 29/1987 (the Spanish Inheritance and Gift Tax Act) to correct this.

Practical rules when the deceased was a non resident: the heir may apply the rules of the autonomous region where the highest value of the assets located in Spain lies; if there were no assets in Spain, those of the region where the heir lives. If the deceased was resident in Spain and there are non resident heirs, they apply the rules of the region where the deceased lived.

This right was first recognised for residents of the European Union and the European Economic Area, and it was later extended to residents of third countries by the Tribunal Supremo (the Spanish Supreme Court, judgments of 2018) and the Dirección General de Tributos (the Spanish tax directorate), on the basis of the free movement of capital.

Spain has signed only 3 treaties to avoid double taxation on inheritances: with France, Sweden and Greece. Outside those cases there is no treaty and the domestic rules apply.

For an heir resident in Spain (unlimited basis) there is the relief for international double taxation in article 23 of Ley 29/1987. The LOWER of these 2 amounts is deducted from the tax due: the amount actually paid abroad for a similar tax, or the result of applying the effective average rate of the Spanish tax to the value of the assets located outside Spain that were taxed there.

A non resident heir, taxed on a limited basis (only on the assets in Spain), does not apply this relief in Spain: their assets abroad are not taxed here.

You will need the full death certificate, the certificate of last wills (certificado de actos de última voluntad, modelo 790-006), the certificate of death cover insurance contracts and the title of succession (a will or a declaration of heirs). The last wills certificate cannot be applied for until 15 working days have passed since the death.

Documents issued abroad usually require a Hague apostille (or consular legalisation) and a sworn translation in order to have effect in Spain.

The European Certificate of Succession (ECS) is the tool for proving that you are an heir, legatee or executor in another Union country. In Spain it is issued by the notario (the Spanish notary) handling the estate. It is recognised automatically throughout the EU (except in Denmark and Ireland) with no apostille needed, and the certified copy is valid for 6 months.

Managora prepares and files the international estate from start to finish: we trace and value the assets inside and outside Spain, we obtain the death, last wills and insurance certificates, we arrange the apostille and the sworn translation, and we deal with the notario for the European Certificate of Succession when there are assets in the Union.

On the tax side, we calculate and file modelo 650, applying the regional rules that correspond to you, the relief for double taxation or the applicable treaty, and we coordinate the taxation in the country where the assets are located. You can see the current price of the service on the International inheritance with assets abroad page and on the Certificate of last wills page.