Since the entry into force of Regulation (EU) No. 650/2012 on cross-border successions, the concept of habitual residence has become a cornerstone in determining the law applicable to a deceased’s estate. The Regulation, which applies to all EU Member States except Denmark and Ireland, shifts the focus from nationality (as traditionally followed by Spain under Article 9.8 of the Civil Code) to the deceased’s habitual residence at the time of death.
This change has profound implications for Spain, a jurisdiction with significant numbers of expatriates, retirees and long-term residents from other Member States and third countries. Pursuant to Article 21.1 of the Regulation, the law of the State in which the deceased had their habitual residence governs the entirety of the succession — both movable and immovable property — unless it is manifestly more closely connected with another State, or the deceased has opted for their national law under Article 22 (professio iuris).
Spanish courts have progressively adapted to this paradigm shift, emphasizing a factual, case-by-case analysis to determine habitual residence. Elements such as duration and stability of residence, integration into the local environment, and the deceased’s personal and economic ties are considered. In contentious cases, for example involving British nationals with secondary homes in Spain, the courts must assess whether their links to Spain outweigh those with the UK, especially post-Brexit, when UK nationals are treated as third-country nationals.
From a legal standpoint, the determination of habitual residence affects not only the applicable succession law but also Spain’s jurisdiction to handle succession proceedings under Article 4 of the Regulation. Furthermore, Spanish domestic tax law continues to apply independently: even if foreign law governs the succession, Spanish Inheritance Tax (ISD) is levied on worldwide assets for Spanish residents, and on Spanish assets for non-residents.
This dual-layer system — EU harmonized rules for conflict of laws, and national rules for tax — requires careful coordination in cross-border estates. Legal practitioners must be alert to the potential mismatch between civil and tax outcomes, particularly where the deceased’s residency, property location and heirs’ residences span multiple jurisdictions. In such contexts, planning instruments such as wills with professio iuris and pre-mortem tax assessments are not merely advisable but essential.
By LEXUNION ESPAÑA, Barcelona (Spain)
