WE are foreigners and our mother who recently died, owned a property in Denia, which was and is still rented out.
She had several properties in Spain as well as assets in England but we have not yet identified which is her last valid Will.
This means that we don ‘t know who is going to inherit which asset, as although we believe that the heirs will be her children, some of them have not yet confirmed whether they want to inherit or not.
As it is probable that it will take several months to finalise the inheritance and probate and to know who will inherit what, we would like advice from a Spanish lawyer as to what should in the interim with regards to rental income, who should receive the funds and how taxes should be paid.
Thank you for your enquiry.
From the date of death of the owner of a property until the acceptance of the inheritance by her heirs, it is required, under the Spanish Law, that the estate or assets are treated as unsettled or YACENTE and this period is referred to as a Yacente Inheritance or Unsettled Estate.
During this time the assets are not owned by anyone, because it is not known who will be the heirs and therefore, any rental income received will belong to the Yacente.
The so-called Yacente Inheritance or Unsettled Estate does not have a legal personality in its own right, but it must pay the taxes that apply, including those due to the letting.
Therefore, as long as the inheritance is not accepted and it is not known who will be the final heirs (who must confirm that they accept the inheritance), in theory the Yacente should request a tax identification number and where appropriate raise invoices to cover the ongoing rental period.
As the Yacente is considered liable for tax by the Spanish General Tax Law (Article 35.4), so it can and should issue the relevant invoices to the tenant.
Likewise, the Yacente must make declarations and corresponding VAT payments in respect of the income received from those renting the properties.
As for INCOME TAX, as the Yacente has no legal status and is not a tax payer from the point of view of income tax and such tax in respect of monies received as rental, according to Spanish law, must be paid by the beneficiaries of the inheritance, each one in proportion to the percentage of their inherited ownership, even if they have not received the actual rental income.
In principle, the administrator, representative or executor named in the will may act as Yacente, it may also be represented by a group of possible heirs, or in a last case scenario any named heir.
Acceptance and end of the Yacente Inheritance or Unsettled Estate
As Spanish lawyers we do understand that the contents of this article may sound extremely complex, but generally, in practise, it can be much simpler.
If the heirs (once known) are in agreement, they can accept the inheritance in a very simple way, (even tacitly).
Once the inheritance is accepted, the Yacente is wound up and each of the beneficiaries will be able to pay and settle all outstanding taxes, without needing to register and obtain a fiscal number for the Yacente Inheritance or Unsettled Estate.
If you wish to be advised in Spain regarding inheritances, rents, leases, etc. contact us and we will help you.
The information provided in this article is not intended to be legal advice, but merely conveys general information related to legal issues.
Carlos Baos (Lawyer)
White & Baos
Tel: +34 966 426 185
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