Succession Laws:
In Spain, the nationality of the testator defines which succession law applies; gifts and donations, by contrast, are subject to the law of residence according to the person's personal statute. General Spanish inheritance law recognises both testamentary and statutory legal succession. A peculiarity of Spanish law is that an inheritance must be accepted and declared. This is usually done by means of a public document or notarial deed, which is entered in the Ownership Registry.

Wills and testaments in Spain can be either personally prepared in writing, by holographic will or by a notary, with a distinction being made between the open and closed versions. In addition, there is a central registry for wills (Registro Central de Ultimas Voluntades) in Madrid, to which Spanish notaries must forward all wills they have executed. This central registry is a useful way of finding the notary who executed a deceased person's last will. It should be noted that even if the testator has left a last will and testament, entitlements to the statutory portions of the inheritance (legitima) set out in Spanish law must be observed (for example, children of the testator have certain automatic inheritance). It is advisable to make a Spanish will for Spanish assets.

Spain is one of the signatory countries to the Hague Convention of 1961 on the Conflicts of Law Relating to the Form of Testamentary Dispositions.

Inheritance Tax:
English law states that real property (land and buildings) in Spain are to be governed and dealt with by local Spanish law when it comes to inheritance tax.

Unlike British inheritance tax, Spanish Inheritance and Gift Tax (IHGT) taxes those who receive property – through inheritance or a gift – rather than taxing the estate of the party transferring the property to that person as happens in UK law. Therefore, to take the example of the death of a British domiciled Spanish resident property owner:

• Because the deceased was British domiciled, the deceased's estate will have to pay inheritance tax in the UK. This will involve the deceased's estate paying inheritance tax on the deceased's Spanish property as part of the deceased worldwide assets.
• But because the deceased was also resident in Spain, Spanish Inheritance and Gift Tax also applies. However, it will be those who inherit the deceased's Spanish property who have to pay Spanish IHGT not the deceased's estate. This applies irrespective of whether the recipients are themselves Spanish residents or not.

Spouses who inherit Spanish property are not exempt from IHGT. Their allowance is €15,956.87, the same as that for children (although there are additional allowances for children aged under 21). These allowances may vary according to the Spanish region where the recipients or property are located. No allowance is available for lifetime gifts.

Sources and Resources:

• www.deloitte.com
• Foster, A. I. – The Complete Guide to Buying a Property in Spain (8 th Edition)
• www.idealspain.com
• Kalin, Christian H. – International Real Estate Handbook
• Merricks Media Ltd - Red Guides: Buying a Property in Spain
• Rider, N, Holtom, H & Howell, J (The Sunday Times) – Buying a property SPAIN