Hans Becker, a German national, spent the last twelve years of his life in Marbella. In 2019 he made a will before a notary in Hamburg choosing German law for his succession. He leaves a villa in Marbella worth 900,000 € and an account in Munich with 300,000 €, in equal shares to his three children: Anna, who lives in Hamburg; Lukas, in Munich; and Sophie, who stayed in Marbella. The three children believe that, since the estate "is governed by German law", everything is paid in Germany. The confusion is understandable and very common: it mixes two questions that the law keeps apart.
Two different questions
Every international inheritance raises at least two issues, and each has its own rules:
| Question | What it decides | Rules that answer it |
|---|---|---|
| Law of succession | Who inherits, forced shares, validity of the will, division, acceptance and renunciation | Regulation (EU) 650/2012 |
| Tax law | Who pays tax, in which country, on which assets and with which deductions | Law 29/1987 on inheritance tax in Spain; the tax law of each other country |
Regulation 650/2012 itself excludes tax matters from its scope. Choosing a law of succession does not move any tax.
The law of succession: habitual residence or chosen nationality
The European Regulation, which applies in Spain to the estates of people who died after it came into application, sets a general rule and an exception:
- General rule: the succession is governed by the law of the State in which the deceased had their habitual residence at the time of death. For Hans, without a choice, it would be Spanish law.
- Choice of law (professio iuris): the deceased can choose in their will the law of the State whose nationality they hold. Hans chose German law and is German: the choice is valid.
The chosen law applies to the whole succession, wherever the assets are. So the Marbella villa is inherited under German law, including the German rules on the portion that belongs to the children. Exactly what German law says is confirmed by a German lawyer; we give no opinion on foreign law.
Nor do the two "residences" necessarily coincide. Habitual residence in the Regulation is a civil-law concept, which looks at where the deceased had the centre of their life; Spanish tax residence is measured with the income tax rules and, for sharing out among the regions, with the days in the last five years. A retiree who spends half the year in each country may get a different answer on each level, and it is worth documenting both.
For a Spanish national, the law that can be chosen is Spanish law, and within it the common or regional civil law according to their civil status (vecindad civil). That is the territory of what the legítima is and how it affects you.
The tax law: each heir's residence and where the assets are
The Spanish inheritance and gift tax (ISD) does not ask which law of succession was applied. It asks two things: where each heir lives and where the assets are.
- Sophie lives in Spain: personal liability (article 6 of Law 29/1987). She is taxed here on her third of everything: the villa and the German account.
- Anna and Lukas live in Germany: limited liability (article 7). In Spain they are only taxed on what is located in Spain: their third of the villa. The Munich account is not taxed in Spain for them.
Who manages the tax, and under which rules, depends on the deceased's residence. Hans lived in Andalucía, so Sophie's tax is managed by the Junta de Andalucía (the regional government) under its rules. Anna's and Lukas's is managed by the State's Agencia Tributaria (the Spanish tax agency), but both are entitled to apply the Andalusian rules (second additional provision, section One.1.b). This is explained in which autonomous community applies.
Each child's base, on the State scale
To see how the burden is shared we use the State scale and reduction (group II), without the Andalusian benefits, which would change the figures a great deal:
Sophie (resident)
- A third of the villa: 300,000 €. A third of the German account: 100,000 €. Taxable base: 400,000 €.
- Net taxable base: 400,000 − 15,956.87 = 384,043.13 €.
- Tax: 40,011.04 € + 25.5 % of 144,654 € = 76,897.81 €.
- If Germany taxes Sophie on the Munich account, she can deduct what she paid there subject to the limit in article 23: the effective average rate (76,897.81 / 384,043.13 = 20.02 %) applied to the 100,000 € located abroad, that is, up to 20,020 €.
Anna and Lukas (non-residents), each
- A third of the villa: 300,000 €. The German account does not count in Spain.
- Net taxable base: 284,043.13 €.
- Tax: 40,011.04 € + 25.5 % of 44,654 € = 51,397.81 €.
- They have no deduction under article 23, which is reserved for personal liability. If Germany also taxes the villa, relieving that double taxation is a matter for the German system and is reviewed by their adviser there.
| Heir | Residence | What is taxed in Spain | Who manages |
|---|---|---|---|
| Sophie | Spain | Villa and German account | Junta de Andalucía |
| Anna | Germany | Only the villa | State tax agency |
| Lukas | Germany | Only the villa | State tax agency |
It is common for a foreigner living in Spain to choose their national law thinking that they will then "pay tax in their own country". That is not so: in Spain, resident heirs are taxed on everything and non-residents on what is located here, regardless of the law of succession. What the choice does change is the civil division: forced shares, the spouse's rights, the ability to disinherit. That is why the decision to choose a law must be taken for succession reasons, with a lawyer from the country of nationality.
Which documents the Spanish side requires
Even if the succession is governed by German law, registering the villa in the Land Registry and collecting the Spanish accounts require documents proving who the heirs are. The Regulation created the European Certificate of Succession, issued by the competent authority and valid across the participating Member States. If the will was made abroad, there are questions of formal validity, translation and legalisation that we deal with in my father made his will in his own country: is it valid in Spain?
In addition, the municipal plusvalía on the villa (a local tax on the increase in value of urban land), the six-month deadline for the tax and, for Anna and Lukas, the non-resident obligations if they keep the villa, all follow Spanish rules without exception.
Checklist for an international inheritance
- The deceased's habitual residence at death (and, for the tax, their last five years if they lived in Spain).
- Nationality and any choice of law in the will.
- Each heir's residence at the date of death.
- List of assets by country.
- Taxes paid in other countries and proof of payment.
- The adviser appointed by the family in each other country.
With that list complete, send us the case through the inheritance form. We take care of the Spanish side and coordinate with the professionals the family appoints in the other countries; we do not have our own network abroad.
Hans's children applied German law to divide the estate and Spanish law for the tax. Sophie filed in Andalucía; Anna and Lukas filed with the State's Agencia Tributaria, applying the Andalusian rules.
The guide to international inheritances and gifts expands on the tax side, and at Salama Tax for inheritance and gifts we describe how we coordinate these files.