If the person who died was habitually resident in Spain, Spanish law will normally govern the inheritance. That is the rule of the EU Succession Regulation (650/2012), unless in the will the deceased chose the law of their nationality. This is how a family from the UK, Ireland or the US ends up dealing with a Spanish will and Spanish bank accounts.
Your husband has died and his will leaves you the usufruct of what he owned. A usufruct is the right to use something and keep what it produces, without owning it. The person who owns it underneath is the bare owner, and what they hold is called bare ownership. Or you are his son or daughter, and your father left the usufruct to his widow.
In both cases the estate is only money: current accounts, deposits, perhaps a fund. There are no flats or commercial premises. This article covers only that case. If there is property, the numbers change.
Can a widow spend the money in the bank accounts if she has the usufruct?
Yes. She can use the whole balance, and she does not need the bare owners’ permission.
Money is used up when it is spent. Article 482 of the Civil Code covers this:
«Si el usufructo comprendiera cosas que no se puedan usar sin consumirlas, el usufructuario tendrá derecho a servirse de ellas con la obligación de pagar el importe de su avalúo al terminar el usufructo si se hubiesen dado estimadas. Cuando no se hubiesen estimado, tendrá el derecho de restituirlas en igual cantidad y calidad, o pagar su precio corriente al tiempo de cesar el usufructo.»
[Unofficial translation: If the usufruct includes things that cannot be used without consuming them, the usufructuary has the right to make use of them. If they were given at an appraised value, the usufructuary must pay that value when the usufruct ends. If they were not appraised, the usufructuary has the right to return them in equal quantity and quality, or to pay their current price when the usufruct ceases.]
Money is the clearest example of a consumable thing, and this kind of usufruct is called a quasi-usufruct (cuasiusufructo). The widow uses the money and, when the usufruct ends, she must give back the same amount.
Banks say the same in their guides for heirs. The usufructuary of an account can draw on the balance without the bare owner’s consent, and only has to return what she took when the usufruct ends. The bare owner, on the other hand, needs the usufructuary’s consent. Those same guides recommend converting the usufruct and the bare ownership of the accounts into capital amounts.
What happens to the money when the widow dies?
If you hold the usufruct over all the money, you can spend all of it during your lifetime. When you die, your estate owes whatever you were meant to return.
The bare owners then have no money sitting in an account. They have a claim against the widow’s estate. If they are the husband’s children but not hers, they will have to claim it from her heirs, whom they may not even know.
That gives both sides a reason to share the money out now. The widow gets rid of a future debt and the heirs receive what is theirs today.
How much money does the widow get if the usufruct is commuted?
Under the common civil law (the Civil Code), the surviving spouse’s share depends on who else inherits:
- With descendants, the usufruct of the betterment third, or tercio de mejora (article 834 of the Civil Code).
- With ascendants, the usufruct of half of the estate (article 837).
- With neither descendants nor ascendants, the usufruct of two thirds (article 838).
The will can give you more, for example the usufruct of the whole estate.
To work out how much money that usufruct is worth, article 26 of the Inheritance and Gift Tax Act values a lifetime usufruct at 89 minus the usufructuary’s age, as a percentage, with a minimum of 10% and a maximum of 70%.
An invented example, not based on any real case. The estate is €120,000 in bank accounts and the widow is 72. The percentage is 89 minus 72, which is 17%.
| Widow’s usufruct | Base | Value (17%) | Remainder for the heirs |
|---|---|---|---|
| Statutory share with descendants (betterment third) | €40,000 | €6,800 | €113,200 |
| Universal usufruct under the will | €120,000 | €20,400 | €99,600 |
To commute the usufruct means to give the widow that amount in full ownership. The rest of the money also stays with the heirs in full ownership.
You can try your own age in the usufruct and bare ownership calculator (in Spanish).
Do you pay transfer tax (TPO) when the usufruct is commuted with money?
Inheritance tax is always due. Each person is taxed on what they receive in full ownership. What changes is whether transfer tax (Transmisiones Patrimoniales Onerosas, or TPO) is due as well.
If the widow receives only her forced share
The legal basis for commutation is article 839 of the Civil Code:
«Los herederos podrán satisfacer al cónyuge su parte de usufructo, asignándole una renta vitalicia, los productos de determinados bienes, o un capital en efectivo, procediendo de mutuo acuerdo y, en su defecto, por virtud de mandato judicial.»
[Unofficial translation: The heirs may satisfy the spouse’s share of usufruct by assigning a lifetime annuity, the income from specific assets, or a capital sum in cash, acting by mutual agreement and, failing that, by court order.]
Article 840 adds that when the widow concurs only with children of the deceased, she can demand that her usufruct be paid with a capital sum in money or with a lot of estate assets, at the children’s choice.
When the widow’s forced share (legítima) is paid this way, article 57 of the Inheritance Tax Regulations says:
«Cuando en virtud de lo dispuesto en los artículos 839 y 840 del Código Civil se hiciese pago al cónyuge sobreviviente de su haber legitimario en forma o concepto distinto del usufructo, se girará una liquidación sobre la cantidad coincidente del valor comprobado de los bienes o derechos adjudicados y el asignado al usufructo, según las reglas del artículo 49, sin que haya lugar, en consecuencia, a practicar liquidación alguna por la nuda propiedad a los herederos ni, en su día, por extinción del usufructo.»
[Unofficial translation: When, under articles 839 and 840 of the Civil Code, the surviving spouse is paid their forced share in a form other than usufruct, an assessment is issued on the amount at which the verified value of the assets or rights awarded and the value assigned to the usufruct coincide, under the rules of article 49. As a result, no assessment is made on the bare ownership for the heirs or, later, on the extinction of the usufruct.]
The Valencian Tax Agency sets this out in Note 4/2021 of its Tax Management Department, dated 12 May 2021:
«Cuando en una sucesión, testada o intestada, se produzca una conmutación del valor de la legítima del usufructo del cónyuge viudo por su valor equivalente en bienes de los previstos en los artículos 839 y 840 del Código Civil, conforme a lo dispuesto en el artículo 57 del RISD, no procederá tributación alguna por TPO.»
[Unofficial translation: When, in an estate, whether testate or intestate, the value of the surviving spouse’s forced share in usufruct is commuted for its equivalent value in assets of the kinds provided for in articles 839 and 840 of the Civil Code, in accordance with article 57 of the RISD, no TPO is payable.]
With a will or without one, a commuted forced share pays no TPO. There is no assessment on the bare ownership either, and none when the usufruct ends.
The same Note has a detail that helps when the estate is only money. Case law allows the forced share to be paid with company shares from the estate, and the Agency extends that approach to investment funds, Treasury bills, bonds and debentures. It does not treat as an article 839 commutation one paid partly in cash and partly with an asset in full ownership, and for that it cites a judgment of the Provincial Court of Madrid (Audiencia Provincial) of 30 September 2019. If everything is money, the payment is entirely in money and there is no mix.
If the will gives the widow more than her forced share
This happens with a universal usufruct, or with any usufruct larger than the statutory share. Note 4/2021 separates two parts. The part equal to the forced share pays no TPO, under article 57. For the part above it, the Agency considers there is an exchange (permuta) subject to TPO, charged on what each party to the exchange receives.
This follows the Supreme Court. In judgments 1112/2020 and 1113/2020 of 23 July, and 1248/2020 of 1 October, it held that if the testator did not provide for commutation, awarding assets in full ownership to the widow in payment of her usufruct is an exchange subject to TPO, on top of inheritance tax. Those cases were governed by Catalan law, but the Directorate-General for Taxes (DGT) applies the same approach under the common civil law (binding ruling V0297-21).
If the will itself provides for commutation
There is no exchange here. Note 4/2021 puts three situations in this group: the testator left alternative legacies, turned the usufruct into assets in full ownership that do not exceed the freely disposable third, or applied the Socini clause (cautela Socini). Only inheritance tax is due. The DGT said the same in ruling V0297-21: if the testator allowed or required commutation, the widow and the heirs acquire the assets in full ownership by inheritance, with no second transaction.
What tax settlement offices do in practice
Not every commutation is assessed the same way. This year, a tax settlement office (oficina liquidadora) in the Valencian Community reviewed an inheritance with a will in which the widow had commuted her universal usufruct. Part was paid to her in money and part in real estate.
The office left the widow’s forced share out of TPO, under article 57 of the Regulations. On the excess it found an exchange, following the Supreme Court. But it did not treat what was paid in money the same as what was paid in real estate, and that changed the final amount a great deal.
Each case depends on what the will says, what is in the estate and how the deed is drafted.
A DGT ruling you should know about
In binding ruling V2035-18, the DGT said that article 57 of the Regulations does not cover the commutation of a usufruct with a power of disposal, which it calls an improper usufruct (usufructo impropio), and treated it as an exchange subject to TPO. That case involved a usufruct with a power of disposal granted by the will.
Before you sign the deed
If the usufruct is only the forced share, the path is clear. If it comes from the will and is larger, the whole will needs to be read before deciding how to split the money. A plain universal usufruct is not the same as one the testator already allowed to be commuted.
And if you have already signed and received a TPO assessment on a split like this, you can have that assessment reviewed.
Related reading: bare ownership, usufruct and co-ownership in Spain.
Sharing out an inheritance like this?
Tell me how much money there is, what the will says and how old the widow is. I will study it and tell you how to share it out and what is paid. I work in English.