The last part of the meeting, which was of particular attention for British citizens, treated about Spanish-UK inheritance.
From the various themes treated, we consider of special interest 2:
1.- Which law is applied to the Inheritance?. “Renvoi” or “Revolving” concept.
2.- Recommendations when make a Spanish Will
WHICH LAW IS APPLIED TO THE INHERITANCE?
The Spanish law recognizes that, in the case of an English person, English law is to be applied in order to regulate his inheritance.
So, in theory, the position should be relatively simple: UK inheritance law applies to a UK national who dies owning property in Spain.
The complication arrives when UK inheritance law actually provides that the disposal of immovable property (land and buildings, household and personal goods) abroad is governed by the law of the country where the property is situated (other rules apply to other types of assets such as bank accounts and investments). So UK law actually says that Spanish law should regulate the Inheritance over a Spanish property!
But, WHY IS SO IMPORTANT TO IDENTIFY WHICH LAW IS APPLIED IN THE INHERITANCE?.-
Because there are big differences between the Spanish and the UK laws regarding the inheritance. The most important difference is that the Spanish have the figure of the “Compulsory” or “Obligatory Heirs” (Herederos Forzosos), which means that the testator cannot dispose from the full inheritance freely, and in whatever circumstances, he must leave the 66% of his inheritance for determinate persons called Obligatory Heirs (mainly descendants and spouses). This is totally different from the UK Inheritance law which allows the free disposal of assets, transferring will total freedom the inheritance set at the entire wish of the person.
In this situation, could happen that an UK citizen, with two sons, and with a property in Spain, can make a Spanish Will leaving his/her property to his/her friend, and that this last Will cannot be executed because, if Spanish laws are applied, then the 66 % of that property should be transferred to his sons, and only the remaining 33 % to be inherited by the testator’s friend.
Usually, in Spain, when an UK citizen dies, UK law is applied automatically to regulate the inheritance. So, as in UK there is free disposal of assets, the Spanish institutions will pass the Spanish assets to whoever appears as inheritor in the Wills. And this happens in the 99 % of the cases.
The problem arrives when regulations of the UK Inheritance law say that for REAL ESTATES the law in application will be the one in which the real estate is. So, if the real estate is in Spain, then Spanish law should be in application to regulate who are the inheritors. And, if Spain considers rights to “obligatory heirs” (like sons and daughters) who have not had their rights considered in the Wills, then, they can claim their rights to be respected. Technically, this sending back of the law to a country is called “Renvoi”, or ”Revolving”.
Thus, Will be the UK or the Spanish Law the law in application for my inheritance?:
GENERAL RULE: Spanish law helps to avoid any problems in the majority of cases by providing in Article 9 of the Spanish Civil Code that, when a foreign property owner dies, having made a will in either in Spain or in his country of nationality, the disposal of any assets he owns in Spain will be governed by his own national law (in this case the UK one), not Spanish law. If his own law permits free disposal of the assets, this frees him from the Spanish inheritance law [but not from Spanish inheritance tax].
The reason from which the Spanish authorities will apply the national law from the testator is to respect the “Unity of Assets” or “Unity of Wealth” concept. This concept confirms that always when there are assets which could be regulated with different laws, to try to regulate them with the same criteria and with the same law. Application of this concept will result in try to not treat different to elements of the deceased’s wealth.
So, a UK national who owns a property in Spain, but has another property in UK, banks accounts in UK, pensions, shares, insurances, etc., must have the security that the law for his/her inheritance will be regulated by the UK Law, even for the Spanish property.
This is the General rule, but, as all General rules, there could be exceptions:
– What will be the case of UK nationals that they have sold all their assets and moved to Spain, when the sole assets they have are the Spanish ones?.
– Or the case in which a UK national has properties in Spain but lives permanently in other country like France, or Italy?.
These are cases in which the Spanish jurisprudence has applied the “renvoi” concept. I mean, that the Spanish law has been applied, introducing the Spanish limitations to the Freedom Testamentary Disposition, mainly the “Obligatory Heirs”.
Thus, what will be law of application for the inheritance in these cases, the Spanish, the UK one, the one for the other country?.
At this point, we enter in technical considerations subject of particular study of the case, considering the individual situation of the case, and the personal consideration about residency, domicile, etc. So, this must be studied carefully with your Solicitor, because, it will depend on how many assets has the person, and where, where he/she has the domicile, how it is the domicile considered, in order to define what law is in application.
– RECOMMENDATIONS WHEN MAKE A SPANISH WILL
- Ask for previous advice to a specialist in International Inheritance. Not all the Lawyers and legal advisers have the necessary qualification to deal with international inheritance.
- Coordinate UK Will with Spanish Will. Inform your Solicitor about your UK Will, if any, in order to elaborate the Spanish Will in accordance with he UK one. It will avoid contradictory disposals which could create serious problems to your inheritors.
- Make the Spanish Will ONLY FOR SPAIN. Make sure that your Solicitor considers in the Will just the Spanish assets, in order to do not enter in conflict with other Wills made in other countries.
- Ask your Solicitor to include in the Will an “Executor” if convenient.