General

Its regime is established in Regulation 650/2012 regarding successions mortis causa and creation of a European certificate of succession, Chapter VI, arts. 62 to 73. (RS), Implementing Regulation (EU) No. 1329/2014 of the Commission of December 9, 2014 establishing the forms mentioned in Regulation (EU) No. 650/2012, as well as in the Final provision 26th Law 29/2015 Cooperation Jca. International

It is not a judicial or notarial document, it is a sui generis document. It is a European public instrument.

It is public because it is authorized by one of the national authorities in charge of issuing succession documents in accordance with their national laws, mainly judges and notaries, subject to the formal European regulatory regime.

• It is European, because it is created and regulated entirely by a European standard, regulation 650/2012. The succession certificate is not a foreign document, it is a European document, and therefore internal.

Its PURPOSE It is to prove the status of heir, legatee or administrator of the inheritance in another State (only for transnational successions). It does not replace national documents, although once issued, it will also produce effects in the State of issuance. (Articles 62 and 63 RS).

The COMPETENCE TO ISSUE IT, the Member State whose authorities are competent in accordance with articles 4, 7, 10 or 11. The competent authority, in general, will be the authority of the state of the applicable law, be it the one of habitual residence or , prior choice, that of the nationality of the deceased.

As for the national authority, it will generally be the judicial authority, although it may also be another authority that, in accordance with national law, is competent to substantiate successions mortis causa: the notary, in most cases.

The national authorities responsible for public records must provide the authority issuing the certificate with access to the information necessary to prepare the certificate. Said access must be under the same conditions as those offered to the competent national authorities for the same purposes (art. 66.5 RS).

CONTENT OF THE CERTIFICATE.- It appears included in the art. 68, where all the mentions that it must contain appear. This precept is complemented by the annexed certificate model approved in Implementing Regulation 1329/2014 of the European Commission. Said regulation includes the CSE with a general body and also five annexes that must be completed in each case, all, some or none, related to the heirs, legatees, administrator, matrimonial property regime,…

The rights that correspond to the widowed spouse in the liquidation of the community of property may not be the object of the certificate, since they are excluded from the scope of the law and the certificate. However, the recent judgment of the ECJ C-558/16 Mahnkopf Case of March 1, 2018 allows the quota in which the spouse’s hereditary quota is increased as a result of the liquidation of the conjugal partnership to appear in the certificate, since according to the art. 1371 of the German BGB, said fee, despite coming from the liquidation of the matrimonial economic regime, has a succession nature.

The award of specific assets to the heir may not be directly incorporated into the certificate when it comes not directly from the succession title, but from the subsequent act of partition.

The certificate will take effect in all Member States without the need for any special procedure. It does not require a special recognition procedure, the regulation avoids using this expression (art. 69-1 RS). The certificate does not require legalization, apostille or any other subsequent formal procedure (art. 74 of the RS). The certificate will be issued in accordance with the multilingual annex model (the translation requirement is a registration requirement art. 36 RH).

-The issuing authority will keep the original and issue an authentic copy of the certificate.

-The authentic copy is valid for six months. They will state the expiration period. Exceptionally, the term may be extended, and this will be stated.

The regulation endows the certificate (article 69 of the RS), the following effects:

1) It will be presumed that the certificate proves the ends accredited in accordance with the law of succession
2) It will be presumed that any person who makes payments or delivers goods to the person designated in the certificate to receive them, has dealt with a person authorized to do so, unless they do not act in good faith (art. 69.3 RS).

3) It is considered that whoever acquires dealings with a person who appears in the certificate with powers to transfer assets of the inheritance has acquired has dealt with a person empowered to dispose of the assets (art. 69.4 RS).

4) The succession certificate will be a registrable title

A mortgage is a real right through which certain movable or immovable property is linked to the obligations of one or more holders, which usually consist of paying a loan. The person responsible, as long as they meet the deadlines, will be the owner of said assets, which are generally real estate. However, the mortgage does not end by paying the last installment.

When the amount owed is finally repaid, and money is no longer owed to the bank or entity responsible for the loan, there is still one last step to be taken. This is the housing registration information, which shows the mortgage that has been paid.

Proceed then so that the property appears registered without charges, or else later there may be problems with the information about the property. Some problems of not modifying this data may be greater difficulties when selling the home, or if you are looking to extend the mortgage or acquire a new one.

Ask the bank to cancel the mortgage
Canceling the mortgage allows the charges to be eliminated in said registry. Although all relevant fees have already been paid, failure to act will not result in the label “free of charge”, which is detrimental for the reasons already explained. This happens like this because the Property Registry and the bank will still reflect the information about the mortgage.

So, to eliminate the registration there are two possible ways, according to the Bank of Spain. The most convenient for the user is to request said procedure from the bank. He himself cannot refuse, but nevertheless he will delegate said task to an agency. Due to this, he will be able to charge his client commissions and expenses, although he is obliged to indicate the amounts before proceeding to do so.

Cancel it yourself
The other possibility indicated is to carry out the procedures yourself, something that will not be free of costs either. According to the highest Spanish banking authority, these are the steps to follow for the registration cancellation of the loan:

1. To begin with, and at no cost, you must request a “zero debt certificate” from the entity, or certificate of economic debt cancellation.
2. Then, it is necessary to go to a notary and deliver said certificate, so that the notary will create the deed of cancellation. Immediately afterwards, they will contact the bank, and they will send their own representative. The first can collect the fees from him, but the other envoy cannot charge the client neither the costs of travel nor those of the procedure.

It should be added that this representative does not have a fixed term to appear at the notary, although he is obliged to “act with the utmost diligence”, according to the Bank of Spain.

3. Third, and also free of charge, the person concerned will go to the regional office to fill out the “Documented Legal Acts” document.
4. Finally, you must go to the Property Registry and provide the documents already obtained: debt cancellation certificate, cancellation deed and Documented Legal Acts tax. Finally, the mortgage can be canceled, although again a cost must be assumed, which in this case will be the registration fees.

If the accreditation of tax residence could be done by weighing a set of evidence, this flexibility in the provision of evidence does not apply in the same way in all cases, it is a conditioned flexibility.

The regulations issued in development of the RDLeg. 5/2004 (TR IRNR Law) -specifically, Order EHA/3316/2010 (IRNR self-assessment forms 210, 211 and 213)- establishes in some cases the requirement that the test be carried out by providing specific documentation : sometimes “a certificate of residence, issued by the tax authorities of the country of residence, justifying these rights” -cases of application of exemptions from internal regulations- and, in other cases, by providing “a certificate of residence issued by the corresponding tax authority that justifies those rights, in which it must expressly state that the taxpayer is a resident in the sense defined in the Agreement”.

Difference that is reflected in annex IV (“Fiscal residence in Spain”) and in annex V (fiscal residence in Spain. Agreement) of the aforementioned regulatory order that creates two different models for the Spanish Tax Agency to issue, respectively, one or the other certificate.

The application of an exemption from the Convention that requires, in application of art. 7 of Order EHA 3316/2010 (IRNR self-assessment forms 210, 211 and 213), the provision of a tax residence certificate for the purposes of the Agreement.

Thus, the previous regulations show that the Spanish internal regulations require for the application of the tax benefit of the agreement to which the taxpayer accepts in his IRNR 2016 self-assessment (the exclusive taxation of other income in the country of residence, COUNTRY_UE_1) the contribution of a tax residence certificate issued by the competent tax authorities for the purposes of the DTA.

It is the consideration of a person as a resident for the purposes of the Agreement that enables taxation in both countries to adjust to the rules of distribution of taxation powers between both States, to the taxation limits, exemptions or other benefits derived from it. .

To enable the application of a DTA, the taxpayer must provide the certificate that expressly certifies that he has the status of resident for the purposes of the Agreement in one of the signatory States.

(TEAC, 02-23-2023, RG 4129/2020)

inheritance tax
When a person dies, his assets and rights pass into the hands of the heirs who are responsible for paying the tribute known as inheritance tax. Said tax is levied on the patrimonial increase that supposes for the heirs of the deceased to receive their assets and rights, either by will or by law.
This tax may vary depending on the autonomous community in which the successor is located and the assets that he receives. In some cases, there are bonuses or exemptions for direct family members and different tax rates are established depending on the degree of kinship or the value of the assets received.
This form of tax is subject to both aspects related to tax law and those derived from civil laws related to the family, specifically with regard to inheritance law.
A large number of countries establish the inheritance tax. This tax obligation is particularly relevant in European countries such as France, Germany, Spain, Belgium and Denmark, as well as in Latin American countries such as Argentina and Chile and the United States.

Who, when and where the Inheritance Tax is paid
The inheritance tax is the one that taxes all the assets, rights and obligations that are transmitted after the death of a person. This transmission of inheritance passes to the successors, both heirs and legatees. Before receiving that inheritance they are obliged to pay this tax.
The first procedure is the preparation of self-assessments of Inheritance Tax. It is very important to know that December 31, 2020 was the date on which the self-assessment regime was established as the only system for presenting Inheritance Tax. It must be carried out exclusively by the taxpayer or taxpayers, or where appropriate by an ascendant, descendant and/or spouse.

Who is required to declare? The heirs and legatees are those who are obliged to declare the Inheritance Tax for the inheritance or legacy that they will receive after the death of the testator.
One of the most unknown particularities is that the people who are beneficiaries of life insurance contracts in the event of the death of the insured, will also be obliged to declare.
This occurs when the person who contracted the insurance is a person other than the beneficiary.
In order to carry out the management correctly, the complete mandatory documentation must be included. That is to say, all the copies of the self-assessment with a copy of the income if the outstanding fee has been paid, the first copy of the Inheritance Acceptance Deed and a simple copy. If it is a private or judicial document, both the original and a photocopy must be included. If said deed does not exist, the Inventory of Assets and Heirs can be presented in duplicate.
In this document will be the data of the deceased and heirs such as the address, the list of assets and their value or debts in the event that they exist. Also, a copy of the Death Certificate, a copy of the last wills, the Testaments and identification documents of the heirs must be included.
When housing is included in the inheritance, the corresponding documentation with the IBI data must be included and if there are bank accounts, a certificate must be requested from the bank in which the capital appears, and if there were any type of investments. The same for the case that there are vehicles, shares in the stock market or insurance contracts. In all cases, you must prove that they exist officially.

Where can you pay? The processing of the self-assessments will be carried out individually. In the event that several self-assessments must be made in the same return, you can select the payment method to proceed to pay them, defer them or split them.
The heirs must submit the tax return electronically at the virtual tax offices or in person.
Another exception to take into account is that legal persons acting as taxpayers are obliged to electronically submit and pay self-assessments.
The forms of payment are covered both by payment by transfer, by card, checking account or in person at affiliated banks.
When should it be paid? The filing period ends six months after the death of the person leaving the inheritance. The heirs can request an extension of six additional months to present the documentation requested by the Tax Agency.

How to calculate the Inheritance Tax.- To proceed with the calculation and determine the fee to be paid in the Inheritance Tax, it is a progressive tax, in which there is no fixed percentage of tax, but rather

the more the taxpayer or taxpayer inherits, or in other words: the higher the taxable base, the more he must pay, that is, the higher the tax rate obtained with which he will have to pay the tax.
The general tax ranges from 7.65% to 34%, after which the bonuses of each Autonomous Community that may correspond are applied.
To calculate the inheritance tax it is necessary to follow the following steps:

1. Determine the net estate, which is calculated by adding the actual value of the assets at the time of acquisition (gross estate) and subtracting deductible debts and charges.
2. This result will constitute the tax base of the Inheritance Tax.
3. Apply the corresponding reductions and bonuses, according to the regulations of each autonomous community.
   The taxable base is obtained by applying the applicable reductions to the taxable base, applying first the State reductions and then those created by the autonomous community itself.
   The Autonomous Communities and the Foral Territories (in the autonomous communities of the Basque Country and Navarra) have made use of the powers attributed to them to establish in their territory a series of reductions in the taxable base of the tax.
   The determination of the Inheritance Tax tax rate to be paid by the taxpayer is obtained by applying the multiplying coefficients to the full rate, established based on two different factors:

• The kinship groups established for the application of reductions in the tax base;
• The pre-existing assets of the purchaser (who will be the taxpayer or taxpayer).

taxpayers may choose to file according to art. 64 Regulation of the Inheritance and Donations Tax Law, RD 1629/1991 of November 8, 1991.
a) A declaration, that is, the documents necessary to settle the tax directly before the competent Tax Administration, so that it proceeds to the examination, qualification, verification and practice of the corresponding liquidations.
b) A self-assessment, in which case it is the taxpayer himself who must carry out the necessary operations to determine the amount of the tax debt and accompany the self-assessment with the document or declaration containing or verifying the taxable event.

What happens if the Inheritance Tax is not paid.- If the heir does not pay the Inheritance Tax either because he does not present the self-assessment or because he has presented it, and has not made the payment, it can lead to sanctions and interest .
All the heirs must present the self-assessment, in the event that there are several heirs, and the vast majority present and pay the tax within the established period, they will not be affected by sanctions, surcharges or late interest, only the one who does not present will be responsible or do not pay the tax on time, which will have to face the possible economic consequences.

The self-assessment of the Inheritance Tax is not presented
In this case, the heir will face the payment of late-payment interest resulting from the period elapsed from the end of the self-assessment until the Administration regularizes the tax situation.
The amount to be paid will be the result of multiplying the amount of the fee not paid by the annual interest rate established in the General State Budget Law between the expiration date of the self-assessment and the actual payment.
In addition, the subject is incurring in a tax offense for which he may be fined with a penalty from 50% to 150% of the tax defrauded, depending on the circumstances.
This sanction may be reduced through voluntary regularization, that is, presenting the self-assessment of the tax before the Administration begins the corresponding process so that the surcharge is 5%, 10%, 15% or 20%, depending on the late payment, and without penalties or interest for late payment.
The subject who does not present the self-assessment of the Inheritance Tax does not appear could be committing a crime of tax fraud. In this case, he could be sentenced to jail and pay a fine along with late-payment interest.

The Inheritance Tax self-assessment submitted, but payment has not been made.- The heir submits his self-assessment (both within and after the term), but has not made the payment of the tax, nor has he requested the postponement or installment of the payment of the debt .
In this case, if the debt is paid before the Administration issues the enforcement order, a 5% surcharge will be applied. If it is paid once the enforcement order has been issued, there will be a 10% surcharge. And if the debt is not paid within the period indicated in the enforcement order, it will entail a 20% surcharge.

The Treasury takes advantage of the ambiguity with which it modified the Wealth Tax last December to tax non-residents who have real estate in Spain through foreign companies and now clarifies that these investors will have to pay the tax not only for the assets they have in our country, but also for the rest of the real estate assets that make up the company. Of course, only those companies that have 50% of their assets or more in Spain will pay the tax.

For example, if a non-resident has a company in Germany with which they acquired a 3 million apartment in France and another 2 million in Spain, they will not have to pay Wealth Tax, since 50% of the assets are not in our country. Likewise, the new Tax on Great Fortunes will also be applied to these investors because it is a copy of the Wealth Tax that comes to complement it, especially in the Autonomous Communities where it is subsidized, such as Madrid and Andalusia.

Non-residents, whether Spanish or foreign, who acquired a property in Spain through a company not located in our country, before January 1, 2022 did not have to pay Wealth Tax. The Executive, when it approved in December the banking and energy tax and the Solidarity Tax for Great Fortunes, modified in that text section 1 of article 5 of the Wealth Tax to tax non-residents who had real estate assets in Spain through foreign companies.
When the rule was approved, there were doubts, because the text was “confusing” about the assets on which these people had to pay taxes. But after a German citizen consulted the General Directorate of Taxes (DGT), it has clarified that he must pay taxes for the total value of the company, provided that more than 50% of the assets are in our country. “If the main asset of this German company is a property located in Spain, then it is understood that the entire German company is located in Spain and now, with effect from 2022, this person must pay taxes.” To the extent that the applicant is a tax resident in Germany, “the Agreement between the Kingdom of Spain and the Federal Republic of Germany will apply to avoid double taxation and prevent tax evasion”.

Non-residents who have real estate in Spain through companies will have to pay the Tax on Great Fortunes for 2022 in July of this year, since the tax was approved last December, leaving these investors with no time to reorder their strategy. to escape the tax. However, this year they still have time to plan their investment to avoid paying that of 2023. This tax is levied on assets over 3 million euros with a rate that ranges, depending on wealth, between 1.7% and 3.5%

Every year, thousands of rightful heirs lose money or property that was theirs due to unclaimed international inheritances. In Spain, around 17,600 foreigners died in 2021, according to the National Statistics Institute (INE); while, in that same year, just over 5,200 deaths of Spaniards outside our borders were registered.
In the specific case of Spain, around 100 million euros are lost annually due to inheritances without known heirs, according to calculations by Coutot Roehrig Iberia. In most cases, these successions are not processed because the heir is unaware of his condition, which prevents them from enjoying a heritage that also generates high tax losses.

Why is there such a high number of unclaimed inheritances?
It is increasingly common for citizens to live and have assets in other countries. The problem is that when a person who has assets in several countries dies, the process to claim his inheritance is complicated by ignorance about the legislation or cultural and linguistic differences. Many times the deceased has not left a will, which further complicates the process.

What are the main problems legitimate heirs face when it comes to unclaimed international inheritances?
In the case of international inheritances, the main problem lies in the legislative complexity of each country. The European Regulation 650/2012 of International Inheritances establishes as applicable law that of the country where the deceased had his habitual residence. However, it also allows the deceased to choose the law of his country of origin to govern his succession, as long as this will is expressed in a mortis causa provision, such as a will.

What factors can complicate the probate process?
When it comes to an international succession, the process can be even more complex if the assets are located in different countries and the heirs live in different places. There are many variables that influence the process and that govern inheritance law when there is an element of foreigners.
Each country has its own rules as to who has the right to inherit and who does not. For this reason, we recommend granting the will in the country where the heirs actually reside, instead of looking for alternatives to pay less taxes.

How can legitimate heirs ensure that they receive what is due to them?
In the inheritance of foreigners residing in Spain, in addition to having legal advice, the creation of a family company can be considered, which can be useful to maintain the assets in the family and avoid possible conflicts or disputes.

The tax regime applied in successions must also be taken into account in order to maximize tax efficiency and minimize the impact of taxes. If the heirs reside in Spain, they will be subject to Spanish Inheritance and Gift Tax and will be eligible for the discounts of the autonomous community in which they live. In the case of not residing in Spain, the taxation is also governed by the Spanish tax, but only when they are goods within our borders.

How exactly does the 3% withholding applied to Non-Residents work?
Article 25-2 of the Consolidated Text of the Law on Non-Resident Income Tax (hereinafter IRNR) Royal Legislative Decree 5/2004 of March 5 provides the following: «In the case of transfers of real estate located in the territory Spanish by taxpayers who act without a permanent establishment, the acquirer will be obliged to withhold and deposit 3%, or to make the corresponding deposit on account, of the agreed consideration, as payment on account of the tax corresponding to those.

In this regard, the following considerations should be made:

Its rationale is to avoid “take the money and run” and, we have seen, that it applies to both natural and legal persons, although those taxpayers who, being subject to IRNR, act through a permanent establishment are excluded.
Its purpose is the transfer of real estate located in Spanish territory. The Resolution of the General Directorate of Taxes (hereinafter DGT) of March 6, 2017 (V0568-17) extends the obligation to withhold to a case of transfer of the right of use and preferential enjoyment for a certain number of years of a position berthing, which originates from an administrative concession over the Andalusian port public domain and for which authorization must be requested from the concessionaire.
Its scope is that of those transfers likely to generate a capital gain, regardless of whether or not the following occurs in the specific case:

• This includes, according to the DGT Resolution of January 5, 2015, transmissions derived from a judicial transaction.
• And the same can be said of the transmissions derived from judicial or extrajudicial procedures of execution, with which the successful bidder or auctioneer will have to withhold 3% for the stated purpose.

In the public deeds of foreign public documents related to real estate located in Spanish territory, in which the omission of any reference to the obligation of retention is frequent, the Notary Public must warn of this and, where appropriate, take advantage of the parties to complement the foreign public document in this regard.
On the contrary, in deeds authorized by a Spanish Notary relating to real estate located abroad, regardless of the warnings that must be made about the effectiveness of the document, there will be no such retention obligation. Yes, of course, if it is an exchange of properties located in different countries when the transfer of the property located in Spanish territory falls within the scope of application of the precept.
We understand that due to the prohibition of analogy of 14 of the General Tax Law, the “lifting of the veil” of article 314-2 of the Securities Market Law does not operate for the transfer of aliquot parts of entities with such evasive intention. Consequently, without prejudice to the taxation of the gain, there will be no obligation to withhold.
For the calculation of the withholding, the price or consideration will be taken into account, not the eventual profit.
In purchases with a deferred price, there is an obligation to withhold the total price, since the transmission has already occurred (article 14-1-c of Law 35/2006 on Personal Income Tax (hereinafter, IRPF); and this, even if the transferor opts for the proportional allocation of the gain to the period in which each collection is due (article 14-2-of the IRPF).

Likewise, we understand that, in the event that the transitory exemption of 50% of the profit of the 3rd additional provision is applicable, there is an obligation to withhold on the total price.

What is the deadline for your admission?
The term for its entry, in the AEAT Delegation corresponding to the place of residence of the property, is 1 month from the transmission (article 14-3 of the Regulation), through Model 211 (Order EHA 3316/2010, modified by the HAP Order 2487/2014). To download model 211 see HERE

What happens if the withholding is not made?
This will determine the registration condition of the property upon payment of the lesser amount between withholding or payment on account and the corresponding tax, which will be cancelable due to expiration or by presenting the corresponding payment letter (article 25-2 of the IRNR and article 14- 5 of the Regulations), although failure to comply with such obligation to withhold does not prevent registration (Resolution of the General Directorate of Registries and Notaries of May 24, 1995).

For the same reason, if the acquirer refuses to make the withholding, the Notary Public complies with warning the grantors of the existing legal obligation, and this, without prejudice to the sanctions that may apply for the infringement incurred, if the withholding or payment to account is not received.