18 February 2026
British citizens who own real estate in Spain must be aware that Brexit has not substantially modified the applicable succession regime, since the United Kingdom never applied European Succession Regulation 650/2012. The law applicable to inheritance is determined by the habitual residence of the deceased, with the possibility of expressly choosing British law in the will. Non-resident heirs have the right to the same regional tax reliefs in Inheritance Tax as residents since 2021. The deadline for settling the tax is 6 months from death, extendable for another 6 months. Proper succession planning with a Spanish will avoids complications and significantly reduces the tax burden.
Introduction: The Real Impact of Brexit on Inheritances
Brexit, effective from 1 January 2021, generated uncertainty among the numerous British community residing in Spain and owning real estate in Spanish territory. However, it is essential to understand that the United Kingdom never applied European Succession Regulation (EU) No. 650/2012, so its departure from the European Union has not entailed substantial changes in the succession regime applicable to British citizens with assets in Spain.
According to data from the National Statistics Institute, more than 280,000 British citizens resided in Spain in 2015, being the third most numerous foreign nationality. The majority concentrate their real estate assets in coastal autonomous communities such as Andalusia, Valencia, the Balearic Islands and the Canary Islands. Proper succession planning of these assets is essential to avoid legal conflicts, excessive tax burdens and delays in the transmission of family assets.
Regulatory Framework: European Regulation 650/2012 and its Inapplicability to the United Kingdom
Regulation (EU) No. 650/2012, of the European Parliament and of the Council of 4 July 2012, entered into force on 17 August 2015 and established a common framework for determining the applicable law, jurisdictional competence and the recognition of decisions in matters of succession mortis causa within the European Union.
Exclusion of the United Kingdom from the scope of application
In accordance with recital 83 of the aforementioned Regulation and as established in its final provisions, the United Kingdom, together with Ireland and Denmark, exercised its right of voluntary exclusion (opt-out) from this regulatory instrument. This decision responds to the roots of the British legal system in the Germanic model of succession, which traditionally applies the lex rei sitae (law of the place where the assets are located) instead of the criterion of habitual residence of the deceased established by the European Regulation.
Practical consequences for British citizens
Given that the United Kingdom was never subject to Regulation 650/2012, its departure from the EU has not modified the rules applicable to the inheritances of British citizens. The succession regime continues to be determined in accordance with the rules of Spanish Private International Law, contained in articles 9 and 10 of the Spanish Civil Code, which refer to specific connecting criteria to determine the applicable law.
Law Applicable to Succession: Determination Criteria
The determination of the applicable law constitutes the fundamental question that conditions the distribution of assets, the existence or not of forced heirship portions, freedom to make a will and the applicable tax regime.
British deceased resident in Spain
If a British citizen had their habitual residence in Spain at the time of death, generally Spanish law will apply to their succession, in accordance with article 9.8 of the Spanish Civil Code. This implies subjection to the Spanish forced heirship system (articles 806 et seq. of the Civil Code), which reserves two-thirds of the inheritance to forced heirs (descendants, ascendants and surviving spouse).
Exception: Choice of law in will (professio iuris)
However, article 9.8 of the Civil Code itself allows the deceased to expressly choose the application of their national law (in this case, English and Welsh law, Scottish law or Northern Ireland law, as appropriate) through express testamentary provision. This choice must be manifested clearly and unequivocally in the will, through a clause such as: “I submit my succession to the law of England and Wales”.
The choice of British law may be advantageous for the deceased, given that the British legal system grants greater freedom to make a will, without the rigid forced heirship system of Spanish Law, except for the limitations established in the Inheritance (Provision for Family and Dependants) Act 1975.
British deceased not resident in Spain with Spanish real estate
If the deceased habitually resided in the United Kingdom and possessed real estate in Spain, the situation presents greater complexity:
- Real estate located in Spain: In accordance with the British system of succession scission, real estate is governed by the law of the place of its location (lex rei sitae). Therefore, Spanish law will apply to the succession of the real estate located in Spanish territory, unless the deceased has made professio iuris in favour of British law in a valid will.
- Movable property and money: They are governed by the law of the last habitual residence of the deceased, that is, British law.
This legal duality can generate practical complications, especially when there are forced heirs according to Spanish law who would be unprotected if British law is applied exclusively to the entire inheritance.
Importance of will with choice of law
In our professional experience advising British clients with assets in Spain, we recommend granting a Spanish will in which the choice of applicable law is expressly made. This preventive action avoids litigation regarding the applicable law, expedites succession procedures and allows tax planning for the transmission of assets.
The Spanish will must be coordinated with the British will to avoid tacit revocations. It is advisable to include a clause of non-revocation of the foreign will and to limit the Spanish will exclusively to assets located in Spain.
Taxation of Inheritances: Inheritance Tax for Non-Residents
Taxation under Inheritance and Gift Tax (ISD) constitutes one of the main concerns of British heirs to assets located in Spain, especially after Brexit.
Regulatory evolution: from discriminatory treatment to tax equality
Until 2014, there was blatant tax discrimination between resident and non-resident heirs in Spain. Non-residents could not apply regional tax reliefs and reductions, being taxed according to state regulations, significantly more burdensome.
CJEU Judgment of 3 September 2014 (Case C-127/12)
The Court of Justice of the European Union declared that Spain violated the principle of free movement of capital enshrined in article 63 of the Treaty on the Functioning of the European Union (TFEU) by fiscally discriminating against heirs not resident in Spanish territory but resident in other Member States of the EU or the European Economic Area.
Spanish Supreme Court Judgments of 2018
The Spanish Supreme Court, in judgments of 19 February and 5 March 2018, extended the criterion of non-discrimination to non-EU heirs, including British citizens resident in third countries, considering that the free movement of capital has global scope in accordance with article 63.1 TFEU.
Law 11/2021, of 9 July
Law 11/2021, on measures for the prevention and fight against tax fraud, definitively amended Additional Provision Two of Law 29/1987, on Inheritance and Gift Tax, legally consolidating equal tax treatment between residents and non-residents, regardless of their country of residence.
Applicable regulations in February 2026
Situation 1: Deceased not resident in Spain
When the British deceased was not resident in Spain, the heirs (resident or non-resident) have the right to apply the regional regulations of the Autonomous Community where the greatest value of the inherited assets located in Spain is found.
Situation 2: Deceased resident in Spain
If the British deceased resided in a Spanish Autonomous Community, non-resident heirs may apply the regional regulations of said Autonomous Community, on equal terms with resident heirs (Additional Provision Two, paragraph 2, Law 29/1987).
Frequent Errors and Practical Consequences
Error 1: Not making a Spanish will
Many British citizens rely exclusively on their British will. This generates complications, since foreign wills must be recognised through specific notarial procedure, requiring sworn translation, apostille and, occasionally, reports of foreign Law regarding its validity and content. This process significantly delays succession procedures and increases costs.
Solution: Grant a Spanish will before a notary, limited to assets located in Spain, with a clause of non-revocation of the British will.
Error 2: Not expressly choosing the applicable law
The absence of professio iuris in the will generates uncertainty regarding the applicable law, potentially leading to litigation between heirs regarding the distribution of assets, especially when forced heirs according to Spanish law concur who would be passed over under British law.
Solution: Include an express clause in the will such as: “I declare that I choose as the law applicable to my succession the law of England and Wales, in accordance with article 9.8 of the Spanish Civil Code”.
Error 3: Being taxed according to state regulations
Some non-resident heirs are unaware of their right to apply regional tax reliefs, settling ISD according to pure state regulations, which generates a tax overcharge that can exceed 30-35% of the inherited value.
Solution: Specialised tax advice prior to settlement. If already settled according to state regulations, there is a 4-year period to claim the refund of undue payments to the AEAT, in accordance with article 66.c) of Law 58/2003, General Tax Law.
Error 4: Failing to meet the 6-month deadline
Filing after the deadline generates late payment surcharges ranging from 5% (up to 3 months late) to 20% (more than 12 months), plus late payment interest. Furthermore, if the Administration initiates a verification procedure, penalties of 50% to 150% of the unpaid tax may be applied (articles 191 et seq. of the LGT).
Solution: Request extension within the first 5 months or, where appropriate, late filing without prior requirement to minimise surcharges.
Error 5: Not coordinating inheritance with the British tax regime
The United Kingdom applies its own Inheritance Tax (IHT) to inheritances of persons considered fiscally domiciled in the United Kingdom, with a rate of 40% on the excess of £325,000. From April 2025, the new British rules establish that persons who have resided in the United Kingdom for at least 10 years are subject to IHT, with progressive disengagement periods.
Solution: Coordinated international tax planning. The Convention between Spain and the United Kingdom to avoid double taxation of 14 March 2013 does not include Inheritance Tax, so there is a risk of real double taxation that must be mitigated through deduction of what was paid in one country when being taxed in the other, in accordance with internal legislation.
Frequently Asked Questions
Has Brexit changed the rules on inheritances of British citizens in Spain?
No. The United Kingdom never applied European Succession Regulation 650/2012, so its departure from the EU has not modified the applicable succession rules. The determination of the applicable law and the tax regime follow the same rules in force since 2015.
Can I continue to inherit as a non-resident British citizen with regional tax reliefs?
Yes. Since Law 11/2021, all non-resident heirs, regardless of their nationality or country of residence (EU, EEA or third countries such as the United Kingdom), have the right to apply regional tax reliefs on equal terms with residents.
What deadline do I have to settle Inheritance Tax?
The general deadline is 6 months from the death of the deceased. An extension of another 6 months may be requested, submitting the application within the first 5 months of the initial period.
Do I need to make a will in Spain if I already have a British will?
Although not mandatory, it is highly advisable. The Spanish will expedites succession procedures, avoids costly procedures for recognition of foreign wills and allows tax planning of inheritance by expressly choosing the applicable law.
What happens if my British father died more than 6 months ago and we have not settled the tax?
You may file the self-assessment late, assuming surcharges and late payment interest. If 4 years have not yet passed, the Administration may initiate assessment proceedings. After 4 years, the Administration’s right prescribes, but the heirs will not be able to register the inheritance in the Land Registry without proving payment of the tax.
Can I claim if I have already paid Inheritance Tax without applying regional tax reliefs?
Yes. You have a period of 4 years from the filing of the self-assessment to request the refund of undue payments to the National Tax Management Office, proving that you are entitled to regional tax reliefs in accordance with Law 11/2021 and the case law of the Supreme Court.
Does the Spanish forced heirship system apply to my inheritance as a British citizen?
It depends. If you habitually resided in Spain at the time of death and did not make a choice of law in the will, Spanish law applies with the forced heirship system. If you expressly chose British law in the will, said law will apply, which grants greater freedom to make a will.
Where do I file Inheritance Tax as a non-resident British heir?
You must file form 650 with the National Tax Management Office of the Tax Agency (headquarters in Madrid), selecting the option to apply the corresponding regional regulations according to the location of the inherited assets.
Conclusion: The Importance of Succession Planning
Brexit has not substantially altered the succession regime of British citizens who own real estate in Spain, but the inherent complexity of international successions requires rigorous planning and specialised advice.
The fundamental aspects to consider are: (i) granting of a Spanish will with express choice of applicable law, coordinated with the British will; (ii) knowledge of the right of non-resident heirs to apply regional tax reliefs since Law 11/2021; (iii) strict compliance with the 6-month deadline to settle ISD, requesting extension if necessary; and (iv) international tax coordination to avoid or mitigate double taxation between Spain and the United Kingdom.
Recent case law and regulatory evolution have eliminated the historical tax discrimination against non-residents, equalising their position to that of residents. This equalisation makes Spain a fiscally competitive destination for the holding of real estate by British citizens, especially in autonomous communities with 99% tax reliefs.
If you need specialised advice on international succession planning, taxation of inheritances or processing of successions of British citizens with assets in Spain, our firm has extensive experience in Private International Law and cross-border tax matters. Contact us to analyse your particular situation.