The UK, France, and Spain each have their own rules governing inheritance, taxation, and administration. For families with international assets, understanding how these rules interact is essential to avoiding unexpected outcomes.
The rule many families overlook
Islamic inheritance principles may apply to different categories of assets, but whether they govern a specific estate depends on the laws applicable in each jurisdiction. Countries determine which succession rules apply to assets located within their territory, and real estate is generally governed by the law of the country where the property is located.
This applies regardless of the owner's religion, nationality, or place of residence. A Muslim family owning property in London, France, or Spain cannot assume that inheritance principles applied to assets in their home country will automatically extend to European real estate.
Financial assets are often treated differently and may be connected to the owner's domicile or other personal connecting factors, depending on the applicable legal framework.
Domicile is not the same as residence
Domicile is a legal concept that is different from simply where someone lives. A person may reside in the UK, France, or Spain for many years without changing their domicile, depending on their long-term intentions and personal circumstances.
However, determining domicile is highly fact-specific. Living abroad does not automatically mean that a person's original domicile has been retained, nor does it automatically determine which inheritance rules apply to financial assets.
Real estate is treated differently. A property located in London, France, or Spain remains subject to the rules of that jurisdiction, regardless of the owner's domicile or personal circumstances. Families who want their European property holdings to reflect specific inheritance objectives need to address each jurisdiction separately through appropriate planning.
The UK: tax exposure and the importance of planning
UK inheritance tax is generally charged at 40% on taxable estates above the available thresholds,[1] subject to applicable allowances, exemptions, and individual circumstances.
Before many assets, including property, can be transferred to beneficiaries, the executor will usually need to obtain a Grant of Probate,[2] which gives legal authority to administer the estate. The timeline varies depending on the complexity of the estate and whether additional steps, such as property sales or resolving disputes, are required.
English law provides broad testamentary freedom, allowing individuals to generally decide how their assets should be distributed through a valid will.[3] Families who wish their UK property to pass according to their intended succession objectives should therefore consider putting a valid will and appropriate planning arrangements in place.
Some families have historically used corporate structures for UK property ownership, although these structures require careful consideration due to their tax and administrative implications. Trust structures may still play a role in succession planning, but they involve their own legal, administrative, and tax considerations.
France: forced heirship rules can limit flexibility
France applies forced heirship rules that reserve a portion of an estate for children. Depending on the number of children, up to three-quarters of an estate may be reserved for them, limiting testamentary freedom.[4]
French property succession often requires the involvement of a notaire,[5] a French civil-law notary responsible for handling succession formalities, establishing heirs' rights, preparing required documents, and completing property transfer procedures.
Under EU succession rules, certain individuals may choose the law of their nationality to govern their succession.[6] However, the application of foreign inheritance rules may be limited where they conflict with fundamental principles of the country applying the law.[7]
Families often explore structures such as property-holding companies or lifetime arrangements separating the right to use a property from future ownership. These solutions may help with succession planning and administration, but they require careful advice and do not eliminate all legal or tax obligations.
Spain: regional differences can affect outcomes
Spain has its own inheritance framework, including forced heirship rules that may limit complete freedom over the distribution of assets. As in France, the application of foreign inheritance principles may face limitations where they conflict with mandatory local rules.
One of Spain's key characteristics is the significant variation between autonomous communities. Inheritance tax treatment can differ considerably depending on the applicable regional rules, meaning families with similar properties may face different tax outcomes depending on where the property is located.[8]
Spanish property succession generally involves formal documentation, including notarial procedures and, where required, registration with the land registry. In many cases, certain steps can be managed through a power of attorney, allowing heirs to complete parts of the process remotely.
One country, one plan
International property ownership requires jurisdiction-specific planning. Succession arrangements that work for financial assets in one country may not achieve the same result for real estate located elsewhere.
A succession structure created in one jurisdiction may not automatically apply to property in another. Each property must be reviewed based on the laws, tax rules, and administrative requirements of the country where it is located.
What families should consider now
Families holding European property should review each asset individually and consider three key questions:
Which country's laws govern the property?
What taxes and costs may apply upon succession?
How long could the transfer process realistically take?
Do not assume that inheritance principles applying to assets held in your home country will automatically extend to overseas property. If you want your property succession arrangements to reflect specific inheritance objectives, appropriate planning should be put in place for each jurisdiction.
If your family holds property across the UK, France, Spain, or elsewhere in Europe, The Family Office, in partnership with licensed legal, tax, and estate planning professionals, can help coordinate your global wealth, including real estate, investments, and other assets.
[2] GOV.UK, Applying for Probate
[4] French Civil Code (Code civil), Article 913, Légifrance
[6] Regulation (EU) No 650/2012 - EUR-Lex (Article 22)
[7] Regulation (EU) No 650/2012 - EUR-Lex (Article 35)
