German Nationals Inheriting in Spain: Pflichtteil, Tax Credit and the Choice of German Law
Germany is the second-largest source of foreign families with property in Spain, after the United Kingdom. Around 800,000 Germans own real estate in Spain and tens of thousands of German families face a Spanish inheritance every year. The interaction between German and Spanish succession law is more nuanced than the UK-Spain interaction, because Germany is bound by EU Regulation 650/2012 and both countries operate civil-law systems with forced-heir rules. A German national resident in Spain can choose German law to govern the Spanish estate, and the German Pflichtteil regime is substantially more flexible than the Spanish legítima — the Pflichtteil is a monetary claim against the heir, not a forced share of the estate itself. This article explains the practical mechanics of a Spain-Germany inheritance, including the German Erbschein procedure, the German-Spanish tax credit, the role of the Notar in both jurisdictions, and the common drafting issues when a German testator wants to coordinate a Spanish will with an existing German will. A dedicated inheritance lawyer in Spain with German-language capability is essential.
German Pflichtteil versus Spanish legítima
The fundamental difference between German and Spanish succession law is the structure of the forced share. In Spain, the legítima is a forced share of the estate itself: the children must inherit at least two thirds of the estate in kind. In Germany, the Pflichtteil is a monetary claim against the testamentary heir, calculated as half of the share the disinherited family member would have received under the rules of intestacy. The testator in Germany can give the entire estate to anyone they choose; the disinherited family members can only claim a cash payment from the testamentary heir.
The practical implication for a German national resident in Spain who chooses German law in their will is that the testator’s freedom of disposition is much greater than under Spanish law. The testator can leave the entire Spanish estate to a current spouse, to a single favoured child, or to a charity, and the Pflichtteil claimants can demand only the monetary equivalent of half of their statutory share — they cannot claim the property itself. For an estate where the main asset is a single Spanish villa, this difference is critical: under Spanish law the villa is co-owned among the forced heirs; under German law the villa goes to the testamentary heir and the Pflichtteil is paid in cash.
The choice of German law in a Spanish will
Article 22 of the EU Succession Regulation allows a German national to choose German law in their will. The choice must be express and is given full effect in Spain. The standard wording is something like “En virtud del artículo 22 del Reglamento (UE) 650/2012, el testador, de nacionalidad alemana, elige la ley alemana para regular su sucesión.” The choice covers the whole estate, wherever the assets are situated. The mechanics and consequences of the choice clause are explained in our guide on the EU Succession Regulation.
For German-Spanish families the choice is almost always advisable. German succession law is more familiar to the testator, more permissive in its disposition rules, and produces outcomes that German heirs expect. The only situation where a choice of Spanish law might be preferable is where the testator wants to use a specific Spanish-law institution unavailable in Germany — for example, a tax-favoured regional disposition in Catalonia or Andalusia — but this is uncommon and is normally outweighed by the Pflichtteil advantage of German law.
The Erbschein and its role in the Spanish file
The German Erbschein is a certificate issued by the German probate court (Nachlassgericht) confirming who the heirs are and what shares they take. The Erbschein is the German equivalent of the English grant of probate, though the underlying legal structure is different (German succession is direct, with the heirs becoming owners on death without an intermediate executor). The Erbschein is often, though not always, used in Spain to evidence the heirs’ status.
In recent years, the European Certificate of Succession (CSE) has largely replaced the Erbschein for cross-border purposes. The CSE is issued by the same German Nachlassgericht and is automatically recognised in Spain without further legalisation or translation (the form is multilingual). For a Spain-Germany inheritance, the CSE is now the standard document used in Spain to evidence the heirs’ status. The Erbschein is still issued when the heirs prefer it or when the German probate court has been engaged before the CSE option was identified. Both documents are accepted by Spanish notaries. See our guide on German nationals inheriting in Spain.
The German inheritance tax (Erbschaftsteuer) regime
Germany imposes inheritance tax (Erbschaftsteuer) on the worldwide assets of a German-resident deceased and on the German-resident heirs’ worldwide inheritances. The tax rates range from 7% to 50% depending on the relationship between the deceased and the heir and the value of the inheritance. Direct descendants (Class I) enjoy a €400,000 tax-free allowance per parent, ascending classes have lower allowances. The German tax must be filed within three months of the heir becoming aware of the inheritance and assessed within a longer period.
For a German-resident heir of a Spanish-situs asset, the asset is included in the German tax base. Spanish inheritance tax paid on the same asset is creditable against the German tax under section 21 of the Erbschaftsteuergesetz, subject to the per-asset limitation. The effect is that the heir pays the higher of the two taxes on each individual asset, not the sum of the two. For most German-Spanish inheritances, the German tax exceeds the Spanish tax (because Andalusia and other regions have largely eliminated their inheritance tax), and the Spanish tax is fully absorbed by the German credit. The Spanish tax is therefore not an additional burden for German heirs — but it must still be filed and paid in Spain, and the credit is then claimed in Germany.
Coordinating with German Notar and Steuerberater
A typical German-Spanish inheritance file involves a Spanish lawyer in Spain, a German Notar (in Germany or at the German consulate) to certify documents for use in Germany and to handle any German notarial acts, and a German Steuerberater to file the German Erbschaftsteuer return. The three professionals coordinate on the timing of acts and the exchange of documents. The Spanish lawyer’s deliverable to the German team is the Spanish inheritance deed (escritura de aceptación) and the proof of payment of Spanish inheritance tax; these are the documents the German Steuerberater needs to claim the foreign tax credit.
The German side typically takes longer than the Spanish side because of the three-month notification deadline (relatively short) combined with the much longer assessment period (the German tax office can take a year or more to issue the final assessment). For the heirs, the practical question is whether the German Erbschaftsteuer is paid before or after the Spanish inheritance tax. The standard practice is to pay the Spanish tax first (within the six-month Spanish deadline) and then claim the Spanish-tax credit on the German return when the German assessment is being prepared.
Spanish bank accounts and the German residence question
A German-resident heir of a Spanish bank account has straightforward CRS reporting consequences. Spanish banks report account balances and movements to the Spanish tax authority, which exchanges the information automatically with the German tax authority under the Common Reporting Standard. A German-resident heir who fails to declare the inherited Spanish account in Germany will see the account appear on the German tax authority’s screens within twelve to eighteen months, with the predictable consequences. The simple rule is to include the inherited Spanish account in the heir’s German Anlage AUS or equivalent reporting from the year of inheritance.
For German-resident heirs of Spanish real estate, the imputed-income tax (1.1% or 2% of the cadastral value) is reportable in Germany as foreign-source rental income, with the Spanish tax paid creditable under the Spain-Germany double tax treaty. For German-resident heirs who rent the property, the actual rental income is reportable in Germany as foreign-source income with the same credit. The German tax adviser handles these reporting obligations; the Spanish side simply files the Spanish tax returns.
Inheriting from a Spanish-resident German testator
When the deceased was a German national long resident in Spain, the file has a special character. Under EU Regulation 650/2012, German law applies (if the deceased made the choice) or Spanish law applies (if no choice was made). German inheritance tax applies if the deceased remained tax-resident in Germany (which is unusual for long-term residents of Spain), Spanish inheritance tax applies if the deceased was tax-resident in Spain. The heirs’ German inheritance tax depends on their personal residence: German-resident heirs pay German tax on their worldwide inheritance, regardless of where the deceased was resident.
For long-term Spanish residents of German origin, the most common configuration is: deceased Spanish-resident, no German inheritance tax on the estate side; heirs German-resident, German inheritance tax on the heirs’ side; Spanish inheritance tax on the Spanish-situs assets, creditable against the German tax. The Spanish file is built on the Spanish-resident-deceased framework, with full benefit of the regional reductions (which for Andalusia eliminate the tax for direct descendants).
Inheriting from a German-resident testator with a Spanish property
The opposite case — a German-resident deceased who owned a Spanish holiday home — is also common. German inheritance tax applies on the worldwide estate (including the Spanish property), Spanish inheritance tax applies only on the Spanish-situs assets. The German tax is usually the larger of the two; the Spanish tax (heavily reduced for direct descendants under regional rules) is the smaller, and is fully absorbed by the German credit.
The Spanish file in this configuration is procedurally identical to the case of a UK-resident deceased: the heirs need to file Spanish inheritance tax within six months of the date of death, register the property at the Spanish Land Registry, and update the Spanish utility and IBI accounts. The German side runs in parallel and is normally led by the German Steuerberater. The Spanish lawyer’s involvement is limited to the Spanish file.
Practical pitfalls and how to avoid them
The most common pitfall is failing to make the German-law choice in the Spanish will, leaving Spanish forced-heir rules to apply by default to a German testator habitually resident in Spain. The choice is a single notarial appointment in Spain and is irreversible once the testator dies; making it now is the simplest precaution. The second most common pitfall is the German heirs’ assumption that the Spanish inheritance tax has been substantially reduced by Andalusia or other regions, and therefore there is no urgency to file. The reduction is from the tax base, not from the procedural requirement; the file must still be lodged within six months even if the tax is near zero.
The third pitfall is failing to claim the Spanish tax credit on the German return. The credit is per-asset and requires the Spanish proof of payment, which must be obtained from the Spanish tax office and transmitted to the German Steuerberater. The transmission is usually straightforward but is sometimes forgotten in the rush to close the file. The Spanish lawyer should provide a complete copy of the Spanish inheritance tax return and proof of payment to the German team as a final step. To start a German-Spanish file, contact our inheritance team.