Cross-Border Wills (UK-Spain): A Significant Legal Challenge

The Kingdom of Spain is a popular destination for British retirees, offering a picturesque setting to spend their golden years. However, drafting a will in Spain presents unique challenges for the British community. Understanding these difficulties is crucial for ensuring a smooth succession process.

Key Challenges for British Citizens Drafting Wills in Spain

1. Dual Property Ownership: Many British citizens residing in Spain retain properties in the UK. This dual ownership complicates the succession process, especially if a will was already drafted in the UK before retiring to Spain. The primary question arises: How can this issue be resolved?

2. Domicile vs. Habitual Residence: The concept of domicile significantly impacts the applicable law to a will. It’s essential to determine whether the British citizen’s habitual residence at the time of death was in Spain or the UK. This distinction influences which jurisdiction’s laws will apply to the succession.

3. EU Regulations and Forced Heirs: Spanish law includes the concept of «forced heirs,» which guarantees certain relatives a portion of the estate. This contrasts with the UK’s testamentary freedom, where individuals can distribute their estate as they wish. Additionally, EU regulations on succession may apply to properties in Spain, adding another layer of complexity.

4. Inheritance Tax Changes: From April 6, 2025, the UK’s Inheritance Tax (IHT) rules will shift from being domicile-based to habitual residence-based. This change will significantly impact wills drafted after this date, as it alters the tax implications for estates.

Practical Solutions

Drafting Two Wills: One effective strategy to mitigate these challenges is to draft separate wills for each country – one in Spain and another in the UK. This approach ensures that each will is compliant with the respective country’s laws and regulations. However, given the complexities involved, seeking professional legal advice is highly recommended to tailor the solution to your specific circumstances.

By understanding these key issues and taking proactive steps, British citizens can better navigate the intricacies of cross-border wills and ensure a seamless succession process in both Spain and the UK.