Inheritance in Spain: the most frequently asked questions
JLA Notarios, notary Barcelona we are going to answer questions you raise in consultations about inheritances in Spain.
10 queries about inheritances
Without further ado, we present them to you:
General information about inheritances, wills, and declarations of heirs
1. What types of inheritance are there?
Inheritances can be testate or intestate. Testate inheritances are those distributed according to the deceased's will; on the other hand, intestate inheritances are those distributed without a will, following what the law establishes for these cases.
Additionally, inheritances can be notarial and judicial. Notarial inheritances are those in which a deed is signed and require that all beneficiaries of an inheritance agree on how to distribute the assets to be inherited.
On the other hand, judicial inheritances are those in which the beneficiaries of the inheritance are in dispute and, as there is no agreement, it will be the judicial bodies that have to determine in a trial how the inheritance is distributed.
2. What is a will? What is a declaration of heirs and what is a deed of inheritance?
The notarial will is the document in which a living person determines who their heirs will be.
The declaration of heirs is the notarial file in which the heirs of a deceased person without a will are declared. It will follow the legal order and the declaration of heirs is only necessary if the deceased did not have a will.
The inheritance deed or deed of acceptance and allocation of inheritance is the notarial document in which the assets of a deceased person are distributed among the heirs. With the allocation of inheritance, ownership of the assets is received. It must be done following the will or the declaration of heirs or by a different agreement among all those interested in an inheritance.
You can learn more about inheritances in Spain, wills and declarations of heirs here:
Let's continue with the third of the frequently asked questions about inheritances in Spain:
3. What is the legitimate portion?
The legítima is a limit that the law places on the free will of people who make a will.
Thus, in Spanish common law, the legítima requires that if there are descendants, two-thirds of the inheritance must be distributed among the descendants. If there are no descendants, the legítima of the parents is half of the inheritance or one third if the spouse of the deceased is alive.
In Catalan law, the legítima consists of the descendants, or failing them the parents, having to receive assets or an amount equivalent to a quarter of the inheritance. Legally, this legítima is considered a Roman legítima, which generates a credit right.
More information about the legítima in this article:
Questions about the processing and costs of the inheritance
4. What costs does an inheritance have in Spain?
The inheritance will require payment of the Notary fees. These are expenses set by the notarial tariff and take into account various criteria such as whether the community property regime needs to be settled, the value of the inheritance, the number of heirs, the number of pages, and whether a declaration of heirs needs to be processed beforehand or not.
In an inheritance in Spain, it is also necessary to pay the inheritance taxes and the inheritance Registry fees for the real estate that must be registered.
Additionally, it will be necessary to pay the fees of the person in charge of settling the taxes and managing the proper registration. These procedures can be carried out by a notary office, a lawyer, or a management agency. At JLA Notarios we provide this service to clients who need it to offer a comprehensive service in the processing of inheritances.
Finally, it is necessary to pay the inheritance lawyer fees, in case it has been decided to hire a lawyer to assist with processing the inheritance.
5. Is a lawyer necessary to process an inheritance in Spain?
It is not always necessary to hire a lawyer to process an inheritance. In the simplest cases it is not always necessary, although it is recommended in more complex cases. In the event that the notary does not handle the processing of the inheritance tax, it is more advisable to have one who can assist with the advice on the fiscal valuations of the inherited assets.
Questions about the valuation of assets, inheritance taxes and deadlines for processing an inheritance
6. What taxes are there on an inheritance?
There are several inheritance taxes. Thus, you have to pay the Inheritance Tax, the IRPF and the municipal capital gains tax.
The inheritance tax is a regional tax that heirs must pay within six months following the death. It requires filling out form 650 at the Tax Office. It is somewhat complex to calculate as it depends on many parameters such as the relationship between the deceased and the heirs, the amount of the inheritance, the assets inherited and other various issues.
The deceased's capital gains tax is a tax paid on the difference in value that the properties have at the time of the inheritance compared to the value they had at the time of acquisition by the deceased.
The deceased's IRPF: income tax must also be paid if the deceased had income during the year of death following the general IRPF rules.
At JLA Notarios we can take care of managing the inheritance tax and the capital gains tax. We also have several articles about taxes and inheritances. If you need to know more, you can read about it at the following link:
As you can see, inheritances in Spain generate frequent and varied questions. Let us continue with the ninth.
7. How should assets in an inheritance be valued for tax purposes?
Tax laws establish rules to value the different assets that are distributed in an inheritance. There are variations by Autonomous Communities.
Basically, the criterion for money and investment funds or pensions is to take their value at the date of death of the deceased of an inheritance. This amount appears in the certificate of outstanding balances at the date of death issued by the bank where the deceased held the balances.
Regarding real estate, they are valued at the real value of the properties, but the Tax Agency sets minimum reference values. Sometimes the value can be increased for tax purposes, which has tax advantages if some of the inherited properties are to be sold.
Additionally, there are special rules, such as adding, if there is a main residence in the inheritance, 3% of its value, as the valuation that the Tax Agency gives to the household contents of the residence.
8. When does the inheritance tax prescribe? And, when does the capital gains tax in an inheritance prescribe?
The inheritance tax prescribes once the tax year corresponding to the date of death of the person who left the inheritance has passed, plus another four years.
The capital gains tax on an inheritance also prescribes once the tax year in which the person who left the inheritance died has passed, plus another four tax years.
9. Who can be responsible for paying the taxes on an inheritance and for verifying the proper registration of the inheritance in the Property Registry?
The tax settlement of an inheritance and the management of the verification of the proper registration of the properties in the Land Registry can be carried out by the notary office, if it offers this service, a lawyer or a management agency.
At JLA Notarios we can take care of the processing of the inheritance tax and the settlement of the capital gains tax. However, not all notary offices offer this service. If the notary office does not provide this service, it is necessary to hire a management agency or a lawyer to carry out these procedures.
If the notary office handles these procedures, you will be able to complete all the formalities at the notary office without a lawyer and without a management agency. This does not mean that legal assistance is never needed, as in cases of inheritances of large amounts or high complexity, legal assistance is indeed recommended.
10. How long does it take to process inheritances in Spain?
The truth is that it depends on each case. It is always necessary to settle the inheritance tax and the capital gains tax within six months following the death of the person who leaves the inheritance, with the possibility of requesting a deferral or instalment payment of the taxes in some cases.
It usually takes from one to six months and depends on various factors, such as the complexity of the inheritance and the assets it comprises.
Thus, the processing time of an inheritance will depend on the time the interested parties take to gather the documents that prove ownership of the inherited assets, including bank certificates, which are usually the most complicated. Furthermore, if the deceased did not leave a will, it will be necessary to process a declaration of heirs at the notary, which by law takes at least one month. Additionally, if there are properties, the time usually needed to obtain the registration is one month or one and a half months.
All the information about Inheritances in Spain
We hope this article has provided you with information on the frequently asked questions about inheritances in Spain that you may have. However, we remain at your disposal if you need more information on this subject.
At JLA Notarios we are experts in Inheritances in Catalonia and throughout the country. If you need to process an inheritance in Barcelona, you can contact us via our email bcn@jlanotarios.com or the contact form on our website. We can process inheritances from any municipality as long as they are signed in person at our notary office. You can consult our extensive range of Inheritance Services and we will assist you with whatever you need.
