French Estate In Spain Declaration

Étapes de la Déclaration de Succession d’un français en Espagne

France and Spain signed, on 08th January 1963, a tax convention to avoid the double taxation of inheritances B.O.E. [State Gazette] of 07th January 1964 and, for the French publication, Decree No 64-3 of 02nd January 1964, O.J. of 07th January 1964-. This convention, still in force, establishes that real estate properties will be the object of a declaration in the country where they are located. On the other hand, article 34 establishes that "real estate properties and other debts", as well as bank balances, will only be submitted to inheritance taxes "in the State where the deceased resided at the time of death".

Article 9 of the Spanish Civil Code establishes that it is the deceased's national legislation that will be applied to the inheritance. It is, therefore, French law - the inheritance rights, determining the respective shares of heirs as well as the inheritance rights of the surviving spouse - that must be applied, in Spain, for the inheritance of French persons. As of 17th August 2015, date of entry into force of Regulation (EU) No 650/2012 on international succession, the declaration of succession of French persons who reside in Spain in terms of tax regulations, will change. Indeed, any European Union citizen residing in another Member State may choose, without waiting for August 2015 and within the framework of a will, the law of the State of their nationality to govern the whole of the succession. In the absence of a choice, the law of the habitual residence will be applied to the whole of the succession. This new regulation does not change anything to your succession if you do not have forced heirs (spouse, descendants or ascendants). It does not change either the characteristics of the Universal community of property, as marriage contracts are excluded from its scope of application. Outside these cases and if you live abroad, it is important to choose well the legislation that will be applied to your succession, depending on the person or persons that you mainly wish to protect, children or the surviving spouse, especially when the latter is called to the succession together with children of the couple, children of a first marriage or together with the ascendants of the deceased.

Our legislation is often unknown by Spanish Notaries, who actually do not have exactly the same functions as French Notaries. However, both in France and in Spain, we only have six months, counting from the date of death, to submit the inheritance tax return to the tax Administration. It is thus important to be well informed in order to avoid errors and time losses that will later translate into delay penalties.

What are the steps of the declaration of succession of a French person in Spain?

Verify the death certificate and make sure that Mr Jean Paul DUPONT does not become Mr Juan Pablo DUPONT. Mrs Marie DUPONT married name BERNARD could also become Mrs Maria Dupont EPOUSE BERNARD. The rectification procedure for these mistakes, usually made by the undertaker's or the service in charge of the registry office -Civil Registry- in Spain, may take from four to six months. Do not forget to report the death to the French Consulate and to request the registration of the death certificate from the French civil registry.

Obtaining French and Spanish certificates of last will. To be used in Spain, the French certificate must be apostilled and then a sworn translation must be made.

The heir who is a non-resident in Spain, for tax regulation purposes, must obtain a Foreigners' Identification Number or N.I.E. whose validity is currently three months. During this period, it has to be transformed into a tax identification number, you must chose an address in Spain and appoint a tax representative. You can obtain the NIE in Spain within the day or within ten days by post at the Spanish Consulates in France.

You must provide the Spanish Notary with the certificate of French legislation that must be applied, when the deceased is a non-resident or, being a resident in Spain, he/she had chosen the application of the French legislation.

Establishing the estate object of the inheritance. The Bank of the deceased will issue a balance certificate at the date of death. But what value should be declared for real estate properties? If you do not intend to sell the property in the mid-term, you could declare the minimum tax value and pay less tax on the inheritance. In the case of a sale, the capital gain will be taxed at 21%. If you think you will have to sell in the mid-term, it is sometimes worthwhile to declare the market value and reduce, as much as possible, the future capital gains.

Signing the partition deed and the declaration of succession. The non-resident heir may perfectly appoint a person of their choice, to sign all deeds. The proxy must also have a tax identification number in Spain. It is not common in Spain to appoint a clerk of the Notary's Office. You may perfectly appoint another heir or even your lawyer for the purpose of signing deeds, as long as you state in the authorisation that he/she may intervene even in the case of a conflict of interests and/or multiple representation.

Real estate properties will also be subject to a municipal tax called "tax on the increase of land value".

Transfer rights are applied unevenly in Spain. Scales vary between 7.65% and 34% depending on the family relationship and on the succession mass. Indeed, Autonomous Regions grant uneven deductions ranging from 40,000 to 250,000 euros. Some, in addition, grant the surviving spouse and/or descendants, whether or not they reside in Spain for the purposes of tax regulations, a tax discount ranging from 75 to 99%.

Debiting of taxes on the succession account: Transfer rights may perfectly be debited from the balance of a Spanish bank account object of the inheritance, as long as you obtain the prior authorisation of the tax Administration. The Spanish Notary may in no case have access to the deceased's account. It is your responsibility to settle this account or to appoint your lawyer for this.

After the payment of transfer rights, you may dispose of Spanish bank balances that where dependent on the succession and close the accounts. Regarding French bank assets that are the object of the Spanish succession, French banks will ask for a Non-Taxation Certificate in France. To obtain it, you must submit an inheritance declaration at the French tax Administration and recall the French-Spanish tax convention of 08th January 1963.

Registration of real estate properties at the Land Registry: to obtain the registration, you must prove the payment of transfer rights and of the municipal tax on the increase of land value. It is also advisable to submit a copy of the deed to the Cadastre in order to change the identity of the new taxpayer.