Is my Will applicable to my Spanish property?
Under EU Succession Regulation (EU 650/2012) which came into effect in August 2015 the aim was to try and unify the laws of inheritance across EU member states. Some of you may recall the horror in the British press at the idea that we might have to adopt French or Spanish inheritance rules and not surprisingly we, along with Denmark and Republic of Ireland opted out of this directive. However for the majority, the most important part of the directive was a provision that an individual may choose, in their Will, to apply the law of their nationality to their succession and to the administration of their estate.
EU Succession Regulation (EU 650/2012) and my Spanish property
EU 650/2012 applies to citizens of all nationalities who own property in participating countries of the EU. This as a result means an English citizen may specify that they want English law to apply to their Spanish property. This will allow you therefore to avoid having your property in Spain pass under Spanish laws and instead refer back to English law, allowing for it to pass to those you name in your Will in the proportions you choose.
It is however important to obtain advice on what you should or should not include in your Spanish Will. Remember that although the estate may be distributed under English law it will be subject to the Spanish rules and taxes. These usually specify that an estate is distributed in certain proportions between a spouse and any children with each of the spouse and children having different tax allowances depending upon their relationship to you. This can sometimes mean that it will cost you less in tax to apply Spanish law rather than to apply English law.
It is therefore recommended that you should have a Spanish Will to deal with your Spanish assets and your remaining worldwide assets should be separated and covered in an English Will. Should you decide English law will apply to your Spanish Will; this will need to be clearly expressed.
Spanish property law vs UK
It is very important to understand that under Spanish law just because you own a property jointly with your spouse it does not mean that he or she automatically inherits when you die. In the UK, property can be owned by people in one of two ways:
- Joint Tenancy: This is the most common way most spouses hold their property. In this situation, if one spouse dies ownership automatically passes to the survivor.
- Tenants in common: This is where each party owns a specific share of the property. In this situation, ownership does not pass automatically to the surviving spouse but under the terms of the Will of the co-owner.
Under Spanish Law, there are similar separations:
- Community of Property: This is the equivalent of our “joint tenancy”. However, it is not possible to have Community of Property outside a marriage or civil partnership.
- Outside Community of Property: This is the equivalent of our “tenancy in common”.
When buying a property it may be worthwhile enquiring to see if you can buy in Community of Property as this may simplify things when either you or your spouse dies because it means that the property will automatically pass to the survivor and you will be spared the time and costs involved going through the Spanish equivalent of our Probate procedures.
It is important to note that once you have purchased a property you cannot change between the different types of ownership under Spanish law. This contrasts English Law where a couple can move between joint tenancy and tenancy in common.
It is therefore crucial to understand which jurisdiction should apply to your Will as well as to obtain any necessary and relevant legal advice. Secondly, you must be sure you understand the provisions your Will includes, on a basic level this can be making sure you have copies in your native language. If you are concerned or require any further information for your property in Spain, or any other countries within the EU, please do speak to a member of our Private Client team.