Controlled Succession Planning Considerations for Expats in Spain

Estate planning, or succession planning, is a priority for expatriates who want to ensure their assets and wealth are distributed to their intended recipients when they pass away. However, the rules around wills and estates can vary substantially around the world – which means a secure plan in the UK might cease to be viable following a relocation to Spain.

Understanding inheritance taxes and succession rules ensures you can take control over how your estate is managed and the taxation applied to your assets now and in the future.

You may, for example, want to make proactive decisions about the beneficiaries to whom your wealth will be distributed – rather than leaving the Spanish forced heirship rules to determine which relatives receive a proportion of your estate.

Here, we’ll explore some of the details and considerations that help our clients plan for their estates and succession without uncertainty or concern.

Managing Estates and Inheritances as an Expatriate in Spain

Most expats recognise the importance of having a valid will, but whether you have one registered and recognised in the UK or Spain is a different matter – and something many people assume is a one-time exercise rather than a document that should be revisited or redrafted following changes in circumstances, including a cross-border move.

Whilst it is possible to have dual wills, one in each country, this can also cause difficulties when distributing your estate. In some cases, one will may contradict the other, and having a UK-registered will officially translated and notarised into Spanish or vice versa can be costly and time-consuming for estate beneficiaries.

There is also a balance between managing your wealth as tax-efficiently as possible and preparing for the succession or inheritance tax exposure when the time comes to pass on that wealth.

We always recommend consulting an experienced international wealth management adviser before making any irreversible decisions about a cross-border estate. The legislation and compliance rules are very different between Spain and the UK, and your plans must adhere to all tax regulations and laws in both jurisdictions.

Considerations Involved in Bespoke Estate Planning

Estate planning is often regarded as a straightforward exercise, but this is an incorrect assumption.

While creating a will to determine who receives your wealth and assets and choosing tax-efficient structures to minimise inheritance tax liabilities remain important, this is just one step in creating a future-ready succession plan.

Expats living in Spain need to be aware that they may have two sets of laws to comply with. That is because many expatriate Spanish residents may also have assets in the UK, such as properties, investments or accounts.

Therefore, estate planning often includes a number of measures, strategies, products and plans to accommodate every eventuality, such as:

• Reviewing estate distribution laws in your home country and in Spain and identifying ways to control who receives your wealth when you pass away.
• Looking at how you wish your capital to be distributed and implementing processes to manage the timing of those payments.
• Building safeguards to protect against distributions of your wealth that contradict your instructions – particularly in Spain and other areas where forced heirship rules exist.
• Ensuring you have optimised the tax efficiency of your estate now and made plans to limit tax burdens placed on your heirs when they receive a proportion of your wealth.

Given the number of variables at play, having a Spanish will simply isn’t enough to assure you that your estate will be distributed as you wish, making a more strategic, well-informed and actionable approach essential.

Planning for Spanish Estate Taxes

Inheritance tax is often a concern for international expatriates, and depending on where you live now, the nature of the assets you own, and where your wealth is located, tax charges likely to be borne by your heirs may be steep.

Although we would all like 100% of our wealth to pass directly to our heirs in a perfect world, succession, wealth, and transfer taxes remain necessary parts of estate planning.

Some UK nationals living permanently in Spain need to account for issues around the potential for dual taxation to impact their beneficiaries. Expatriates who remain British domiciles – which applies to most – may incur inheritance tax charges against the value of their estate in the UK, in addition to Spanish succession taxes.

These tax regimes work very differently and have varying allowances, exemptions and rates.

Consulting a wealth management consultant with experience in both the UK and Spain will ensure you have a fully balanced overview of how inheritance and succession tax work and how they might impact your recipients.

The positive is that there are numerous potentially favourable tax initiatives and structures available. You are welcome to contact your nearest Chase Buchanan office to schedule a private consultation to discuss your wealth management and estate planning should you be interested in learning more.

Controlling Spanish Estate Planning with Gifted Assets

One potential resolution many expatriates consider is the option of gifting assets or wealth before they pass away or making provisions to dictate how inherited assets are to be used. That could include:

• Leaving funds to children or grandchildren but restricting access to lump sums until you feel they will be mature enough to use the wealth responsibly.
• Allocating an inheritance to provide a comfortable retirement for a loved one or cover costs associated with medical expenses.
• Deciding that your heirs should use your assets to ensure your children or grandchildren can access their chosen educational route, covering costs such as university or course fees.

There are several options, based on your requirements and circumstances, which can avoid the uncertainty and loss of control associated with leaving assets to your beneficiaries in a will, at which point the management of those assets and application of succession rules is out of your hands.

Advance Gifting as Part of a Succession Planning Approach

In some cases, you might choose to set aside capital or funds now intended for specific uses. The exact way the structure works is tailored to your requirements but could involve:

• Creating fund accounts with immediate ownership rights, including making deposits and withdrawals, so you continue to have full access to your finances.
• Setting up structures that enable your beneficiaries to receive specific permissions when you pass away, according to your wishes.

This strategy can be a way to make decisions about the future use of your estate while having funds available for your retirement and personal use.

However, this solution is one of many, and a qualified, experienced professional wealth management adviser will be able to walk through each scenario with you based on your wishes, wealth and circumstances.

The focus is on ensuring you make informed judgments about the best ways to manage your estate – now and when it passes along to your beneficiaries.

Please contact the nearest Chase Buchanan Spanish team or our UK Administration Centre if you’d like further information and advice about keeping control of your Spanish and British estate management affairs.

*Updated February 2025