London Heirs and the Spanish Inheritance: A Step-by-Step Guide for Families in the Capital
London is by some distance the largest source of British families dealing with Spanish inheritances. Decades of British retirement to the Costa del Sol, the Balearics and the Costa Blanca mean that thousands of London households inherit Spanish property, bank accounts and pensions every year. Most of these heirs have never instructed a Spanish lawyer, do not speak Spanish, do not know the six-month tax deadline, and assume the process will look something like English probate. It does not. This article is written specifically for heirs based in London and the South East. It explains how the Spanish file is built when the heirs are within easy reach of the Spanish consulate in Manchester Square, when the apostille route through the Foreign, Commonwealth and Development Office is faster than the consular route, how the Spain-UK income tax treaty interacts (and does not interact) with inheritance, and how a dedicated inheritance lawyer in Spain coordinates with a London-based executor and solicitor to settle the Spanish portion of the estate in parallel with English probate. The guide is practical and assumes no prior Spanish-law knowledge.
Why London is different from the rest of the UK
London-based heirs of Spanish estates enjoy practical advantages that heirs elsewhere in the UK do not. The Spanish Consulate General in London (20 Draycott Place, Chelsea) is the busiest in the United Kingdom and handles the largest volume of inheritance-related notarial appointments. The Foreign, Commonwealth and Development Office Legalisation Office is also in London (in Milton Keynes physically, but with same-day London courier services widely available), which speeds up apostille processing. The English Bar has a substantial group of solicitors who routinely handle cross-border probate involving Spain, and the major banks have international wealth desks familiar with the documentation required.
The downside is appointment pressure. The Spanish consulate in London has the longest waiting list of any UK consulate — typically eight to twelve weeks for a notarial appointment in normal periods and longer in summer. For an inheritance file with a six-month tax deadline, the consular delay can swallow much of the available window if not managed at the start. The standard advice for London heirs is to check consular availability on day one of the file; if more than four weeks out, use the local notary and apostille route described in our overview of the Spanish inheritance power of attorney.
The Spanish file built from London: what your lawyer does
A London-based heir typically engages a Spanish lawyer directly, by phone or video call. The Spanish lawyer carries out all the procedural steps in Spain: obtaining the Spanish death certificate (if the deceased died in Spain) or registering the UK death certificate (if the deceased died in the UK), searching the Spanish Registry of Last Wills, locating all Spanish assets across the Land Registry, the banks, the vehicle registry and the insurance registry, drafting the notarial deed of acceptance, filing and paying inheritance tax, and registering the property at the Land Registry.
The heir’s involvement is limited to two physical acts: signing the Spanish power of attorney before a London notary (followed by apostille) or at the Spanish consulate, and providing documents — passport copy, UK death certificate, UK will if relevant, and any information the heir has about the deceased’s Spanish assets. Everything else is done by the Spanish lawyer in Spain. The heir does not need to travel.
Coordinating with London solicitors and English probate
Most London heirs already have a UK solicitor handling English probate for the UK portion of the estate. The Spanish lawyer and the UK solicitor coordinate on the documents that flow between the two files: the UK grant of probate (when issued), the UK death certificate, the UK will, and any UK powers of attorney. The Spanish lawyer relies primarily on the UK death certificate and the UK will; the UK grant of probate is helpful confirmation of the will’s validity but is not strictly required for the Spanish file.
The English solicitor’s focus is on the UK assets and the UK inheritance tax return (Form IHT400 if the gross estate exceeds the nil-rate band). The Spanish lawyer’s focus is on the Spanish assets and the Spanish inheritance tax return (Model 650). The two returns are independent and use different valuation rules. The London solicitor does not need to file anything in Spain; the Spanish lawyer does not need to file anything in the UK. The two professionals communicate to ensure consistent narrative across the two files, particularly on the description of the deceased’s domicile and on the timing of asset transfers.
The Spain-UK tax treaty and inheritance
The current Spain-UK income tax treaty (2013) covers income tax in detail but does not cover inheritance tax. There is no bilateral inheritance tax treaty between Spain and the United Kingdom, and there has not been for many decades. Each country applies its own internal inheritance tax rules to the relevant assets, and double taxation is mitigated only by the unilateral credit mechanisms in each system. The Spanish unilateral credit (article 23 of the Spanish Inheritance Tax Act) allows the Spanish-resident heir to credit UK inheritance tax paid on Spanish-situs assets against Spanish inheritance tax on the same assets. The UK side allows similar relief for foreign tax on UK-situs assets.
For the typical case of a UK-resident heir inheriting a Spanish property, the analysis is simpler. UK inheritance tax applies to the worldwide estate of a UK-domiciled deceased (regardless of where the assets are located) and to UK-situs assets of a non-domiciled deceased. Spanish inheritance tax applies to Spanish-situs assets regardless of the deceased’s residence or domicile, and to all assets received by a Spanish-resident heir. A UK-resident heir inheriting a Spanish property from a UK-domiciled parent pays UK inheritance tax on the property (as part of the worldwide estate) and Spanish inheritance tax on the property (as a Spanish-situs asset received by a non-resident heir). Double taxation arises and is mitigated, partially, by the credits in each system. The full analysis is set out in our guide on British nationals inheriting in Spain.
Regional inheritance tax and the Andalusian exemption
For property in Andalusia — the destination of most British retirees and therefore the source of most London-based inheritance files — the regional inheritance tax exemption is dramatic. Since 2019, spouses, descendants and ascendants benefit from a 99% reduction in Spanish inheritance tax. The effective tax burden on a typical inheritance of an Andalusian apartment is now near zero for direct family members. The remaining 1% tax is calculated on the regional reference value of the property and is usually a few hundred euros.
This makes the Andalusian inheritance tax much less of a concern for London heirs than it was a decade ago. The procedural cost of filing, the lawyer fees, and the notarial and registry fees, are now a larger component of the overall cost than the tax itself. The exemption applies regardless of whether the heirs are resident in Spain — the European Court of Justice rulings of 2014 and 2018 extended the regional reductions to non-resident heirs and to inheritances from non-resident deceased, so a London-resident heir of a UK-resident deceased inheriting an Andalusian flat benefits from the 99% reduction in full.
Currency and the timing of remittance
After the inheritance is completed, the heir typically wants to repatriate any inherited cash from the Spanish bank account to a UK account in pounds. Spanish banks handle the international transfer routinely but require documentation of the source of funds: the inheritance deed, the inheritance tax return, and the proof of tax payment. The transfer is in euros, converted to pounds by the receiving UK bank or by a third-party FX provider at the heir’s choice. For larger amounts (above approximately €50,000), the heir should compare rates between the Spanish bank, the receiving UK bank, and specialist FX providers, because the spreads can be substantial.
The receipt of the inheritance in the UK is not itself a UK tax event for an income tax purposes. UK inheritance tax has been calculated and paid on the deceased’s estate, not on the heir’s receipt. The heir’s acquisition cost (base cost for UK CGT) of any inherited asset is its probate value, which the heir’s UK solicitor will have established as part of the English probate. The Spanish probate value and the English probate value should be consistent, which is one of the reasons the two professional teams need to coordinate.
Inherited Spanish property: keep, rent or sell
London heirs face a recurrent decision once the Spanish property is registered in their names: keep it, rent it, or sell it. Each option has different procedural and tax consequences. Keeping the property generates an annual non-resident income tax obligation (1.1% or 2% imputed-income tax on the cadastral value) and ongoing IBI, community fees, and utilities. The procedural cost is modest — a single annual tax return — but the cumulative cost over years can be substantial.
Renting the property converts the imputed-income tax to actual-income tax on the rental income, at 19% for EU/EEA residents (now post-Brexit, technically 24% for UK residents, although this is contested and there are open EU infringement proceedings on point). Renting also imposes regional and local regulatory requirements, including potentially a tourist licence if the rental is short-term. Selling the property generates Spanish capital gains tax at 19% on the gain, with the 3% buyer’s retention as an advance payment, plus municipal plusvalía. Each option has its own paperwork and the choice should be made informed by the heir’s long-term plans. The mechanics of sale are covered in our guide on selling inherited property in Spain.
Spanish bank accounts after the inheritance
Inherited Spanish bank accounts can be retained in the heir’s name or closed and transferred to the UK. Retention has the advantage of providing a Spanish point of contact for any future Spanish-side matters (community fees, IBI, utilities, ongoing rental income) but the disadvantage of an additional account to monitor, an additional FBAR or equivalent reporting (for US-connected heirs), and bank fees for non-resident accounts that are often higher than for resident accounts.
Closure has the advantage of simplification: the funds are transferred to the UK and the Spanish account is closed. The disadvantage is that the heir loses the Spanish payment infrastructure, and any future Spanish-side payments need to be made by international transfer with the associated FX costs. For an heir who plans to keep the inherited property for several years, retention of the Spanish account is usually preferable. For an heir who plans to sell the property within twelve months, closure is simpler.
Common London-specific pitfalls
The most common pitfalls for London heirs are: assuming that English probate must complete before the Spanish file can start (it does not — the two are independent), assuming that the Spain-UK income tax treaty covers inheritance (it does not), assuming that a Spanish bank will accept an English power of attorney (it will not), assuming that an English will is automatically valid in Spain (it is, but requires apostille and sworn translation), and assuming that the Spanish consulate appointment can be booked at short notice (it cannot — book it on day one or use a local notary).
Another pitfall, less common but more consequential, is the failure of London-based British nationals to make a Spanish will choosing English law before the death. After death, the choice is no longer available. Spanish forced-heir rules apply by default if the deceased was habitually resident in Spain. London-resident British nationals with a property in Spain should consider making a Spanish will during a future trip to Spain or at the Spanish consulate, to lock in the English-law choice and avoid the Spanish legítima for their heirs.
Action steps for a London family in the first two weeks
Day one to three: obtain the UK death certificate and engage a Spanish lawyer by phone or email. Day three to seven: arrange for the death certificate to be apostilled by the FCDO Legalisation Office and translated into Spanish. Day seven to fourteen: arrange the Spanish power of attorney (book a London notary or check Spanish consulate availability; have the bilingual power text supplied by the Spanish lawyer). Day fourteen onward: the Spanish lawyer searches the Registry of Last Wills, locates the Spanish assets, applies for the heirs’ NIE numbers, and begins drafting the deed of acceptance and the inheritance tax return. The full timeline to completion is typically four to six months from instruction. To start a file, contact our inheritance team.
London-based heirs benefit from the strongest professional infrastructure of any UK city for international inheritance work, and the cost of doing the file properly is modest relative to the value of a typical estate. The early appointment of a Spanish lawyer and the parallel running of UK and Spanish procedures are the two decisions that determine whether the file completes on time within the six-month Spanish window. Both decisions should be made in the first week.