Spanish Asset Issues in UK Probate
In UK probate cases where the deceased also had assets in Spain, there are particular aspects that need to be carefully considered, including:
Proof of Death – If the death occurred within Spain, the Spanish Authorities accept the Spanish Death Certificate as proof of death (but not proof of the cause of death). When a death occurs outside Spain, it has to be proved to the Spanish Authorities, to enable the compulsory search of the Spanish Central Wills Registry to be carried out. This establishes with certainty, the presence or absence of a Spanish Will. Overseas deaths are usually verified by reference to an Apostilled overseas Death Certificate, officially translated into Spanish and certified by a sworn translator.
Will – A key factor in the initial assessment of a Spanish probate case (and actual beneficial entitlement), is whether: there is a valid Spanish Will; no Spanish Will but a foreign Will covering the Spanish assets; or no Will at all. The compulsory Spanish Central Wills Registry search result confirms whether or not there is a valid Spanish Will; and also (if there is a Spanish Will), the date and Notarial location of the Will. But the Spanish Authorities will also admit evidence of later revocation of a registered Spanish Will by a subsequent non-Spanish Will. (So, in English Will drafting, for example, revocation clauses have to be carefully worded in cases where there are Spanish assets, either to revoke or not to revoke earlier Spanish Wills, as required).
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Asset Location – Generally, it is possible for an experienced and well-prepared legal practitioner with the appropriate documentation to hand, to deal with assets wherever they are situated in Spain. So, it is unnecessary for the legal practitioner to be based in the actual locality of the Spanish assets. The key factor is to have the necessary dual-jurisdictional expertise in dealing with the succession of Spanish estates for non- Spanish individuals. Asset location can also determine which Spanish Authorities are involved, which is important, as rules and procedures can differ from area to area.
Asset Type – The precise procedures and documentation in a Spanish probate case are determined principally by the type of Spanish assets. In some cases, a simple monetary legacy left in a Spanish Will can involve a similar amount of procedural documentation and legal/ Notarial work as the succession of a Spanish property. (Some Spanish banks are particularly slow and bureaucratic to deal with). Each case has to be individually assessed at the outset, on its own circumstances/ asset details.
Property Ownership – In principle, the regime of property ownership in Spain for co-owners is the equivalent of tenants in common in the UK. Spain also has a forced heirship law which may-or may not- apply in dealing with the Spanish assets of non- Spanish individuals, depending on the circumstances of the case.
Power of Attorney – A Spanish legal representative is generally appointed under Power of Attorney, in order to minimise inconvenience for beneficiaries, as the Spanish inheritance process involves a significant amount of personal attendance. Estate administrators may also need to be represented in Spain (under Power of Attorney), in addition to beneficiaries. The form and wording of the estate legal documentation will determine this.
NIE Number – Having a Spanish fiscal (NIE) number is obligatory for beneficiaries and sometimes for estate administrators also. Generally, the NIE number can be obtained under Power of Attorney, without the applicant needing to be in Spain in person. Post-Brexit, a full Apostilled Passport copy is now required for British NIE applicants.
Apostilled Documents – Non-Spanish legal documents which are required to prove beneficial entitlement (Death Certificates; Grants of Probate, etc), may need to be Apostilled by the Foreign and Commonwealth Office, in order to be legally admissible in Spain. In most cases, they must also be translated and certified by an official translator. An advantage of the existence of a valid separate Spanish Will is that it reduces the complexity and extent of the documentation, which has to be presented to the Spanish Authorities in a Spanish probate case.
Taxation – The Spanish Succession Tax liability in a Spanish probate case must be very carefully assessed at the outset, according to the tax regime of the Region of Spain in question. The more remote the relationship between the deceased and the beneficiary, and the higher the value of the estate, the higher the tax rate. There are other major differences of approach between Spain and other countries- for example in Spain, there is no automatic inter-spouse exemption. Also, for real estate interests, in addition to Spanish Succession Tax, there is usually a local Town Hall (Plus Valia) tax liability payable on succession. Although post-death Will variations are not allowed in Spain, depending on the family circumstances and the estate documentation, it may be possible to achieve alternative/ more tax efficient succession routes in the succession process; thus, potentially reducing the tax liability. The fiscal strategy must be determined right at the outset of the case, agreed upon with the beneficiaries; and implemented during the course of the case handling. It cannot be addressed retrospectively.
Banks – As indicated, dealing with bank accounts in Spanish probate cases can often be the longest part of the process. Succession of bank accounts is not addressed at local bank branch level in Spain. There are usually central internal legal departments which process succession matters. Direct contact with the bank’s central legal department is generally fairly difficult. For the Spanish banks, succession work appears to be decidedly low priority. So, considerable patience can be required on the part of the practitioner and the beneficiaries!
Sale of Inherited Assets – In order for beneficiaries to be able to sell inherited registered Spanish assets, the Spanish probate process must be completed first. For relatively minor estate assets such as vehicles, this can be inconvenient, as there can be a significant delay, before a sale can be completed.
Conclusion – As the precise procedures and documentation are always case-specific, an initial comprehensive analysis of a Spanish probate case is always essential. This is to ensure certainty from the outset as to the procedural steps which will be required; and the information and documentation which will need to be produced.
Unless a Spanish probate case is carefully planned and programmed from the outset; and meticulously managed as matters proceed, there is a very significant risk of delay and unnecessarily increased costs. Any delay can be frustrating for the beneficiaries; and disproportionately time consuming for the practitioner. And increased costs over time can include additional Spanish tax amounts, with penalty interest accruing for late payment.
The Legal 4 Spain team is always available to provide preliminary advice on a no-obligation basis in relation to probate cases, which include Spanish assets.
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