British expats in Spain face a two-jurisdiction estate: the UK on domicile, Spain on situs. UK IHT applies to the worldwide estate if the deceased was UK-domiciled, while Spanish IHT applies to Spanish-situated assets under the relevant regional regime. Coordinated wills, a Brussels IV election and parallel probate procedures are the only way to manage both cleanly. We act for British expats from Marbella to Alicante to the Balearics.
British expats are the largest foreign community in Spain. Whether the move is full relocation to the Costa del Sol, a retirement flat in Tenerife, a long holiday home in Javea, or a second residence in Mallorca, the estate planning position is consistently misread. The two most common mistakes: (1) assuming a UK will covers Spanish property without more, and (2) assuming moving to Spain clears UK IHT exposure. Neither is right. This page walks through the coordinated approach that actually works for British families with Spanish ties.
The UK's IHT regime follows domicile, not residence. A British national who moves to Spain for the last 20 years of their life often remains UK-domiciled under HMRC's rules — particularly where UK family, UK assets, UK bank accounts and UK burial arrangements are retained. UK IHT applies to the worldwide estate at 40% above the nil-rate band. Spain, by contrast, applies its IHT on the worldwide estate of Spanish residents and on Spanish-situated assets of non-residents, under the regional regime of the applicable autonomous community. Both can apply to the same estate. The Article 23 unilateral credit prevents most true double taxation but the mechanics require careful filing.
The civil-law side is equally distinct. Without a Brussels IV election in the will, Spanish habitual residence can trigger Spanish forced-heirship rules (legítima) on the Spanish estate. With the election, UK law governs the succession even in Spain. Spanish wills for British testators should therefore always include the election, be drafted bilingually, align with the UK will, and be registered via notary deposit at the Registro Central de Últimas Voluntades. We prepare these as a package.
This page covers UK domicile rules as HMRC applies them, the Brussels IV mechanism and its limits, UK IHT and Spanish IHT interaction, how to structure parallel wills without creating revocation problems, and the probate workflow on both sides. If you are a British expat with Spanish property, a Spanish resident with UK assets, or the executor of such an estate, open a file with us.
Six rules govern every British-connected Spanish estate. Get these right and the rest follows.
UK-domiciled deceased pay UK IHT on worldwide assets, including Spanish property. Domicile does not end just because you move. Deemed domicile after 15 of 20 years of UK tax residence.
Domicile-basedSpanish residents: IHT on worldwide estate. Non-residents: IHT on Spanish-situated assets only. Regional rules apply by election for non-residents.
Situs and residenceEU Regulation 650/2012 allows British testators to elect UK succession law on a Spanish will. Overrides Spanish forced heirship on Spanish assets.
Succession law electionBest practice: separate wills, each limited to the assets in that jurisdiction, each expressly preserving the other. Prevents revocation clashes.
Mirror structureSpanish IHT Law Article 23 allows UK IHT paid on Spanish-situated assets to be credited against Spanish IHT on the same assets. Not a treaty, unilateral Spanish measure.
Prevents double taxSpanish probate does not wait for UK grant. Six-month Spanish IHT deadline runs from death. Work both jurisdictions in parallel.
Parallel procedureDomicile is a UK common-law concept with no Spanish equivalent. Everyone has a domicile of origin (usually the father's domicile at birth) that persists unless a new domicile of choice is positively acquired. Acquiring a domicile of choice in Spain requires physical presence in Spain plus an intention to reside there permanently or indefinitely — and the evidentiary threshold for HMRC is high. Retaining UK bank accounts, UK investments, UK family, UK burial arrangements, UK voting registration or expressing any intention to return to the UK will typically defeat a claim of change of domicile.
In addition, HMRC applies a deemed domicile test: any individual who has been UK tax resident for 15 of the preceding 20 tax years is deemed domiciled for IHT. For a British expat who relocated to Spain at 55 after a lifetime in the UK, this means UK IHT deemed-domicile follows them for at least three more UK tax years after leaving. And the domicile of origin can revive if they move back.
The practical effect: most British expats who moved to Spain in middle or late age remain UK-domiciled at death. UK IHT applies to their worldwide estate. Planning that assumed otherwise — particularly where based on pre-2017 advice — can collapse under HMRC review. We coordinate planning with a UK domicile adviser where the position is finely balanced; for most clients, the safer assumption is UK domicile and UK IHT on the full estate, with planning focused on nil-rate bands, residence nil-rate band on the UK main home, lifetime gifting and, where appropriate, deed-of-variation post-death.
The EU Succession Regulation (650/2012) took effect in 2015. It provides that the law of the deceased's habitual residence at death governs their succession worldwide — unless the deceased made an express choice of their nationality's law. For a British national who has been habitually resident in Spain for many years, absent election, Spanish succession law would apply to their Spanish estate, including forced heirship. The election to apply UK law in the Spanish will preserves UK testamentary freedom across the Spanish estate.
Important limits: Brussels IV is a civil-law instrument. It does not affect tax. Electing UK law does nothing to the Spanish IHT bill. It governs who inherits (freedom of disposition vs forced shares), not how much tax is paid. It also does not bind Spanish public policy in all cases — forced heirship claims by minor children may be argued on hardship grounds in rare cases, though courts have generally respected the election in expat estates.
We draft British expats two wills as a default: a UK will covering UK-situated assets (UK property, UK bank accounts, UK ISAs, UK pensions lump sums) and a Spanish will covering Spanish-situated assets (Spanish property, Spanish bank accounts, vehicles, holdings). Each will contains a clause expressly preserving the other. The Spanish will includes the Brussels IV election, is drafted bilingually English/Spanish, and is executed before a Spanish notary for deposit with the Registro Central. The UK will is drafted separately under UK rules and stored with the UK solicitor. This structure prevents the common disaster of a later will inadvertently revoking the earlier one and leaving the testator intestate in one jurisdiction.
We confirm UK domicile status and Spanish tax residence, identify which IHT rules apply to which assets, and flag deemed-domicile timing if relevant.
Dual UK/Spanish wills drafted. UK law elected on Spanish will. Bilingual drafting. Spanish will executed before notary and registered.
Modelo 650 prepared with regional election. UK IHT position coordinated with UK advisers. Article 23 credit applied where material.
Spanish probate completed before notary. Land Registry transfer filed. UK grant coordinated. Closing pack delivered in English.
UK IHT is charged at 40% on estate value above the nil-rate band (£325,000 per individual, potentially transferable between spouses for £650,000 combined, plus up to £175,000 residence nil-rate band per spouse on a UK main home passing to direct descendants). For a UK-domiciled British expat with a €1,000,000 Marbella villa, UK IHT on the Spanish property alone is roughly £240,000–£270,000 depending on exchange rate and spouse-exemption usage. Spanish IHT on the same property, under say the Andalusian 99% reduction, is a few hundred euros. The Article 23 credit allows the Spanish tax to be credited against UK — which saves nothing in this case because Spanish tax is already negligible. The UK IHT is the real bill.
Planning levers for UK-domiciled British expats: (1) Lifetime gifting — seven-year rule, potentially exempt transfers; (2) Use of nil-rate bands across spouses; (3) Residence nil-rate band on UK main home if retained; (4) Business property relief, agricultural property relief where applicable; (5) Life insurance policies written in trust to fund the IHT liability; (6) Spousal exemption on first death between UK-domiciled spouses.
For non-resident British heirs of Spanish property, the 2014 ECJ principle and subsequent Spanish legislation allow election of the regional rules of the autonomous community where the Spanish property sits (or where the deceased last resided). This is declared on Modelo 650. For Andalusia, Madrid, Valencia (post-2023), Balearics (post-2023), Murcia and Canaries, the regional election captures the 99%+ reduction/bonificación and brings Spanish IHT close to zero for Group I/II beneficiaries. Without the election, default state rules apply and Spanish IHT is substantially higher — often in tens of thousands for the same estate.
Where the British expat has become Spanish tax resident (183+ days per year or centre of economic interests in Spain), Spanish IHT applies to the worldwide estate under the regional rules. UK IHT still applies on UK-situated assets — for UK-domiciled individuals, worldwide; for non-UK-domiciled individuals post-deemed-domicile cut-off, only UK-situated assets. The credit mechanism applies both ways in principle; in practice the direction of credit depends on which tax applies to which asset.
For a long-term Spanish-resident British expat who has clearly shed UK domicile and passed the deemed-domicile threshold, UK IHT exposure reduces to UK-situated assets only. Planning opportunities open up: UK real estate sale pre-death, restructuring UK assets into non-UK holdings, etc. These require coordinated UK/Spain advice.
UK defined-contribution pensions and SIPPs are usually outside the UK IHT estate (passing under nomination, not will). Final-salary pensions have different rules. Annuities typically cease at death or continue to spouse. Spanish IHT treatment varies: Spanish-resident beneficiaries pay Spanish IHT on UK pension lump-sum inheritance in some structures; income-drawdown continuation may instead be income-taxed. We screen the pension structure on every file.
UK ISAs do not exist in Spanish tax law. A Spanish-resident British expat holding a UK ISA has the ISA taxed as a normal investment by Spain — despite its UK tax-free status. Dividends from UK-quoted shares are taxed in Spain as foreign dividends with a UK withholding tax credit under the UK/Spain tax treaty. On death, UK ISAs form part of the UK IHT estate; UK-quoted shares similarly.
British expats commonly retain a UK property (rental or previously a main home) while living in Spain. UK property is UK-situated for UK IHT. Spanish IHT on the same property depends on residence: Spanish-resident deceased pay Spanish IHT on the UK property (worldwide basis), subject to credit for UK IHT already paid; non-Spanish-resident deceased do not pay Spanish IHT on the UK property. Retained UK property also complicates the UK residence nil-rate band calculation if it is no longer the main home.
The UK grant of probate process takes typically 6 to 16 weeks through the Probate Registry for uncontested estates. The Spanish probate process (aceptación de herencia at Spanish notary, Modelo 650 filing, Land Registry transfer) runs on its own timeline with a six-month Spanish IHT deadline from death. The UK grant is not required for Spanish probate if a Spanish will exists — heirs identified in the Spanish will can accept before a Spanish notary on production of death certificate and Certificado de Últimas Voluntades. The UK grant is required for Spanish-situated financial accounts held only in the deceased's UK bank branches or UK platforms; cross-border coordination applies here.
Our standard approach: open Spanish file immediately on death certificate and apostille. Apply for Spanish Certificado de Últimas Voluntades within days. Identify heirs. Prepare Modelo 650 in draft against expected valuations. File within the six-month window. Apply UK IHT credit on Spanish filing where Spanish tax is material. In parallel, UK solicitors progress UK grant. Land Registry transfer in Spain completes after Modelo 650 receipt.
UK domicile, Spanish situs, Brussels IV election, Article 23 credit — handled as one coordinated engagement, not two disconnected files.
Request a British Estate ConsultationParents resident in Spain with children in UK; non-resident property owners leaving Spanish assets to heirs abroad; surviving spouses, siblings, aunts and uncles, grandparents — every cross-border configuration follows a different rulebook.
€1.2m Marbella villa, UK-domiciled retiree, two UK-resident adult children. Andalusian 99% reduction applies on Spanish side; UK IHT at 40% dominates the cross-border bill.
€350,000 Denia apartment, British expat tax-resident in Spain for 20+ years, claim of non-UK domicile. UK IHT on UK-situated only if argument succeeds. Spanish IHT near zero post-2023 reform.
Retained UK home rented out plus Puerto Andratx villa, UK-domiciled couple. Residence nil-rate band lost if UK is no longer main home. Spanish IHT post-2023 Balearic reform near zero; UK IHT substantial.
British expat died with only a UK will, Spanish flat passing under UK intestacy-adjacent rules. Brussels IV election missing — Spanish forced heirship theoretically applicable to Spanish estate. Practical fix: deed of variation if heirs agree.
Joint Javea flat, UK-domiciled unmarried partners. No spouse exemption for UK IHT. No Group II treatment in Spain without pareja de hecho registration. Full IHT both sides without planning.
Tenerife apartment, UK DC pension in drawdown, British expat Spanish-resident 10 years. Spanish IHT near zero (Canary 99.9% bonificación). Pension lump-sum treatment depends on nomination and continuation — needs screen.
UK will is valid for Spanish property in principle but probate costs, delays and translation expense are substantially higher. A Spanish will cuts months off Spanish probate.
Domicile, not residence, drives UK IHT. Most British expats remain UK-domiciled at death. UK IHT applies to the worldwide estate.
Without the election, Spanish habitual residence triggers Spanish succession law on the Spanish estate, including forced heirship.
Sloppy Spanish will drafting can inadvertently revoke the UK will. Each will must expressly preserve the other and be limited to its jurisdiction's assets.
Default state rules cost tens of thousands on substantial estates. Explicit regional election on the form captures the 99%+ reduction.
Six-month Spanish deadline runs from death. Parallel procedure is standard, not optional.
Marbella, Estepona, Benahavis, Sotogrande, Fuengirola. Core British expat inheritance caseload; UK IHT dominates, Spanish tax post-regional reform is near zero.
Javea, Denia, Moraira, Calpe, Torrevieja, Orihuela Costa. Post-2023 Valencian reform means Spanish IHT is nominal; UK domicile planning is the priority.
Tenerife south, Gran Canaria south, Lanzarote, Fuerteventura. Canary 99.9% bonificación includes Group III — broadest family coverage.
Mallorca (Andratx, Palma, Pollensa), Menorca, Ibiza. Post-2023 reform near-zero Spanish IHT for direct family.
Those who moved to Spain in earlier life and have credible non-UK domicile argument. Planning shifts focus to Spanish side and to UK-situated asset management.
Family members or professional executors managing a cross-border estate. Parallel UK/Spain workflow from day one.
Brussels IV applied, wills drafted, UK and Spanish tax positions coordinated, deadlines tracked.