WILLS

I have just read a legal article in a Spanish/English magazine that shocked me.  I was under the impression that as a UK National, I could write a will leaving my assets to whomever I wished.  The norm in the UK is for a person to leave all assets to their spouse/partner if one dies and if both die, then it goes to the children.  In Spain, however, you cannot do this.

According to the article, Spanish Law does not allow the testator to dispose freely of his or her assets.  Article 808 of the Civil Code states that “children or descendants are legitimately entitled to two thirds of the inheritance left by either or both of their parents”.

There was a Supreme Court Sentence on 23rd September 2002.  A British citizen whose sole assets were in Spain, still married at the time of his death, having never divorced and who had one child, made a Will leaving everything to his current partner.  His son (who according to the law was his legal heir) contested the Will.  The Supreme Court granted in favour of the son as Article 9.8 of the Civil Code establishes that succession rights are governed by the Law of the testators’ home country (in this case British Law).  British Law states that property inheritance is subject to the laws of the country in which the property is located.  Therefore it falls under the remit of Spanish Law and therefore the Spanish Civil Code applies.  In the case mentioned above, the Supreme Court ruled that the son was entitled to 2/3 of the inheritance.

I am unsure whether this was simply because the son contested the will that he then became entitled to two thirds.  I am off to see my lawyer now…..

BUSINESS

The Spanish law establishes different types of legal structures if you want to start a business but the most usual are the following:

Sole Trader (“Empresario individual”):

a self-employed person who decide to start a business by him/her self without any partnership. He/she manages the business, provides the capital and assumes the risk without any limit.

Community of assets (“Comunidad de Bienes”):

a kind of partnership based on joint ownership of a business, goods and property. The persons who are partners manage the business, provide the capital and assume the risk without any limit.

Private Limited Company (“Sociedad Limitada”):

Convenient for small investments and a small number of shareholders. No liability for the shareholders. Many legal requirements and formalities.

Public Limited Company (“Sociedad Anónima”):

Convenient for big investments and a large number of shareholders. No liability for the shareholders. Many legal requirements and formalities.

Permanent Establishment (“Establecimiento Permanente”):

Every Spanish Branch office of a Non Resident parent company is a Permanent Establishment in Spain, but not every Permanent Establishment in Spain is a Branch office in Spain.

An individual or firm is considered authorised to operate by means of a permanent establishment when it has the following in Spain:

Management offices

Branches (“Sucursales”)

Offices

Factories

Workshops

Warehouses, shops or other establishments

Mines

Oil or gas wells

Quarries

The agricultural, forestry, stock farming or any other operations, or pace of prospecting or extraction of natural resources.

Building works, installations or assemblies of more than twelve months

WILLS

The UK national dies without any will.

If a foreign owner of property in Spain dies without making a will his property will be disposed of in accordance with Spanish inheritance rules.

The law provides that a spouse keeps half of all property acquired during marriage, so if only one of the member of the couple dies it is only half of the property which goes into the estate.

The law provides the following:

 A spouse is entitled to the life interest (Usufructo Vitalicio) in one third but bare ownership (“Nuda Propiedad”)of his third must be willed to surviving children in the proportion that he wants (Tercio de mejora)

Other third of the property must go to the surviving children in equal shares (Tercio de legítima)

The remaining one third can be disposed of freely (Tercio de libre disposición)

The UK national dies with a UK will.

In this case, first of all will be necessary to legalise the UK will for Spain, process that use to very long and expensive. The main steps that must be taken are:

A certified copy of the Death Certificate must be legalised by the Spanish Consul in the UK.

A Spanish translation of this certified copy must be prepared and validated by the Consul.

A lawyer should be empowered to prepare a list of assets in Spain, to execute the will and to present and pay the inheritance tax.

The Spanish Consul must prepare a Certficate of Legal Compilance (Certificado de Ley), which confirms that the testator had the legal capacity to make a will; that the will is valid; that the Spanish Law of Obligatory Heirs (Ley de Herederos Forzosos) does not exist in the UK; that the will has been duly proven; and that the trustees named have the legal powers to administer the estate.

The UK national dies with a Spanish will.

CREGO ABOGADOS could be empowered to prepare a list of assets in Spain, to execute the will and to present and pay the inheritance tax.

If the UK national has at the same time a UK will and a Spanish will, this is the best to make easier everything because the UK will should apply to the UK assets and the Spanish will should apply to the Spanish assets. A married couple cannot make a joint will, each person must make their personal will.

CAR REGISTRATION

Residents of Spain (legal or fiscal) are obliged to register their cars on Spanish plates.

Taxes that should be paid in a final importation

a) Value Added Tax (IVA)

This tax is payable on cars imported from outside the community or on cars registered on tourist or tax-free export plates when imported. The basis of the calculation is on the original market price of the vehicle with a reduction for each year of the vehicle's age. This tax is not payable on cars registered on fully tax paid plates from a community country. The IVA is at present 16%.

b) Special Registration Tax (Impuesto especial sobre determinados medios de transporte)

This tax on registration, established in Law 38/1992, is intended to compensate for the losses in tax income brought about by the reduction in IVA. It is generally 12%, but reduced to 7% if your gasoline driven car has less than 1.600 cc, or a diesel car of less than 1.910 cc.

c) Import Duty

In the case of a vehicle registered in a country not belonging to the EU/EES, an import duty of 10% is payable when the vehicle is imported to Spain. This duty is also calculated on the original market price, with a reduction according to age.

Technical Inspections

The Spanish Law provides that every vehicle registered in Spain must subject to periodic technical inspections (ITV). The interval of this inspections are:

a) four (4) years after first registration (in Spain or abroad)

b) after five (4) years, every two (2) years until nine (10) years

c) after ten (10) years, every year.

Car with the steering wheel on the right hand side

If you want to put on Spanish plates in your car with the steering wheel on the right hand side, before to do this you should go the nearest ITV station to obtain the “Ficha Técnica” of your car in order to be homologue by the Spanish Authorities.