Inheritance lawyer in Tenerife: the 99.99% ISD rebate in the Canary Islands

An estate in Tenerife has unique fiscal and procedural characteristics. The Canary Islands apply a 99.99% rebate on the Impuesto de Sucesiones y Donaciones (ISD, inheritance and gift tax) for heirs in Groups I and II (descendants, ascendants and spouse), making a direct-family inheritance virtually tax-free. Many families are unaware of this rebate or fail to apply it correctly, which can lead to incorrect assessments and penalties. Tenerife also attracts a significant community of foreign residents — particularly from northern Europe — who may pass away on the island leaving heirs in several countries and assets both in Spain and abroad. Administering an estate in Tenerife with cross-border elements requires expertise in Canarian regional tax law, the EU Succession Regulation, and applicable double tax treaties.

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Why BM Consulting

Specialised advice and personal service

At BMC we are specialist inheritance lawyers in Tenerife with in-depth knowledge of Canarian tax law and the practical complexities of international estates on the islands. We manage the full process: obtaining succession documents, preparing the asset inventory, drafting the partition agreement (cuaderno particional), filing the ISD self-assessment with the Consejería de Hacienda del Gobierno de Canarias with the 99.99% rebate applied, dealing with the local capital gains tax (plusvalía municipal) in the relevant municipality, and completing the Land Registry inscriptions. For estates with cross-border elements, we coordinate with lawyers in the heirs' country of residence.

  • In the Canary Islands the ISD rebate for direct heirs (Groups I and II) is 99.99% — an inheritance between parents and children in Tenerife is practically tax-free.

  • The deadline to settle the tax is 6 months from the date of death, extendable by a further 6 months on request before the initial deadline.

  • Tenerife has a significant foreign resident community — estates with cross-border elements require specialist advice.

  • Where there are debts, the heir may accept under benefit of inventory or renounce before a notary.

How we work

From first contact to case completion

  1. Documentation and opening of the estate file

    We obtain the death certificate, the certificate of last wills (certificado de actos de última voluntad) and a certified copy of the will from the Colegio Notarial de Canarias. Where there is no will, we process the intestate declaration of heirs (declaración de herederos abintestato). For foreign deceased, we verify the validity of wills executed in the country of origin.

  2. Asset inventory in Tenerife

    We prepare the complete inventory: real estate in Tenerife (Santa Cruz, La Laguna, the south of the island, the north), bank accounts, vehicles, company shareholdings, life insurance policies and overseas assets. We value assets using the criteria of the Agencia Tributaria Canaria.

  3. Partition agreement and distribution

    We draft the cuaderno particional distributing assets among the heirs. Where there is agreement, the partition is formalised before a notary in Tenerife. Where there is a dispute, we act extrajudicially or before the Courts of First Instance in Santa Cruz de Tenerife.

  4. Tax settlement and Land Registry registrations

    We file the ISD self-assessment with the Consejería de Hacienda del Gobierno de Canarias applying the 99.99% rebate for Groups I and II. We deal with the plusvalía municipal and handle the Land Registry inscriptions.

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The problem

An estate in Tenerife has unique fiscal and procedural characteristics. The Canary Islands apply a 99.99% rebate on the Impuesto de Sucesiones y Donaciones (ISD, inheritance and gift tax) for heirs in Groups I and II (descendants, ascendants and spouse), making a direct-family inheritance virtually tax-free. Many families are unaware of this rebate or fail to apply it correctly, which can lead to incorrect assessments and penalties. Tenerife also attracts a significant community of foreign residents — particularly from northern Europe — who may pass away on the island leaving heirs in several countries and assets both in Spain and abroad. Administering an estate in Tenerife with cross-border elements requires expertise in Canarian regional tax law, the EU Succession Regulation, and applicable double tax treaties.

Our solution

At BMC we are specialist inheritance lawyers in Tenerife with in-depth knowledge of Canarian tax law and the practical complexities of international estates on the islands. We manage the full process: obtaining succession documents, preparing the asset inventory, drafting the partition agreement (cuaderno particional), filing the ISD self-assessment with the Consejería de Hacienda del Gobierno de Canarias with the 99.99% rebate applied, dealing with the local capital gains tax (plusvalía municipal) in the relevant municipality, and completing the Land Registry inscriptions. For estates with cross-border elements, we coordinate with lawyers in the heirs' country of residence.

Process

How we do it

1

Documentation and opening of the estate file

We obtain the death certificate, the certificate of last wills (certificado de actos de última voluntad) and a certified copy of the will from the Colegio Notarial de Canarias. Where there is no will, we process the intestate declaration of heirs (declaración de herederos abintestato). For foreign deceased, we verify the validity of wills executed in the country of origin.

2

Asset inventory in Tenerife

We prepare the complete inventory: real estate in Tenerife (Santa Cruz, La Laguna, the south of the island, the north), bank accounts, vehicles, company shareholdings, life insurance policies and overseas assets. We value assets using the criteria of the Agencia Tributaria Canaria.

3

Partition agreement and distribution

We draft the cuaderno particional distributing assets among the heirs. Where there is agreement, the partition is formalised before a notary in Tenerife. Where there is a dispute, we act extrajudicially or before the Courts of First Instance in Santa Cruz de Tenerife.

4

Tax settlement and Land Registry registrations

We file the ISD self-assessment with the Consejería de Hacienda del Gobierno de Canarias applying the 99.99% rebate for Groups I and II. We deal with the plusvalía municipal and handle the Land Registry inscriptions.

99.99%
ISD rebate in the Canary Islands for direct heirs
6 months
Deadline to settle the inheritance tax
G1 and G2
Groups benefiting from the Canarian rebate

My husband passed away in Tenerife leaving a house in the south of the island. As I live in Norway, I needed a local lawyer to handle everything. BMC managed the full estate administration, applied the 99.99% Canarian rebate, and coordinated the documentation with my Norwegian adviser. An indispensable service for someone managing an inheritance from abroad.

Ingrid Halvorsen Heir, resident in Norway, Tenerife — Oslo

Estates in Tenerife: Spain’s most generous succession tax regime

The Canary Islands stand alongside Madrid and Andalusia as one of Spain’s most tax-favourable regions for inheritance. The 99.99% rebate on the Impuesto de Sucesiones (ISD) for heirs in Groups I and II means that an estate passing between parents and children in Tenerife is virtually tax-free, regardless of the value of the assets. This fiscal advantage, combined with the Canary Islands’ special economic and tax framework (Régimen Económico y Fiscal de Canarias), makes the islands one of Spain’s most attractive territories for direct heirs.

The rebate does not, however, apply automatically. Filing the correct self-assessment on time with the Consejería de Hacienda del Gobierno de Canarias is essential to benefit from it without complications. Any formal error can trigger a review that prolongs and complicates the process.

At BMC we are specialist inheritance lawyers in Tenerife. We manage the complete process with experience before the Gobierno de Canarias, the island’s Land Registry offices and the Courts of Santa Cruz de Tenerife.

The estate administration process in Tenerife

Administering an estate in Tenerife requires coordinating actions before several authorities within six months of the date of death.

Initial documentation: The death certificate is obtained from the Civil Registry where the deceased passed away (in Tenerife, principally in Santa Cruz de Tenerife or La Laguna). The certificate of last wills (certificado de actos de última voluntad) is requested from the Ministry of Justice and can be processed remotely from anywhere in Spain or abroad. A certified copy of the will is obtained from the Colegio Notarial de Canarias.

Where the deceased did not execute a will, the intestate declaration of heirs (declaración de herederos abintestato) is processed before a notary. Where the deceased was a foreign national, we verify whether wills exist in their country of origin.

Asset inventory in Tenerife: The island has a diverse asset structure. Real estate may be located in Santa Cruz de Tenerife, La Laguna, the northern metropolitan area (La Orotava, Puerto de la Cruz), the tourist south (Adeje, Arona, San Miguel de Abona) or in rural inland areas (around Masca and Anaga). Each zone has its own Land Registry and cadastral particularities. Bank accounts held with local branches of national institutions and shareholdings in companies in the tourism, agricultural or services sectors complete the typical inventory.

Partition agreement (cuaderno particional): Distribution of assets among heirs must respect the forced heirship entitlements of the Spanish Civil Code (the Canary Islands have no separate regional succession law): the strict legitim of the children (one third divided equally), the improvement third (for whichever children the testator designates) and the freely disposable third.

ISD settlement: The self-assessment is filed with the Consejería de Hacienda del Gobierno de Canarias. The 99.99% rebate for Groups I and II is applied to the gross tax liability: the tax is first calculated under the standard rate schedule and multipliers, then the rebate reduces the payable amount to just 0.01% of what would otherwise be due.

Plusvalía municipal (IIVTNU): This local capital gains tax is settled with the municipality in which each property is located. In the Ayuntamiento de Santa Cruz de Tenerife and the larger southern municipalities (Arona, Adeje), the rates applied can be significant for properties that have seen substantial appreciation over recent decades.

Land Registry inscriptions: Property in Tenerife is registered at the Land Registry covering its location. The island is served by several registries depending on the zone (Santa Cruz de Tenerife, La Laguna, La Orotava, Granadilla de Abona).

Tenerife and cross-border estates: the reality of the island

Tenerife is the most populous of the Canary Islands and has a substantial foreign resident community, particularly in the south (Los Cristianos, Playa de las Américas, Costa Adeje, El Médano) and the north (Puerto de la Cruz). Many of these residents are retired nationals from northern Europe — German, British and Scandinavian — who have settled permanently on the island. When they pass away, the estate may involve:

  • Heirs in other countries who must comply with Spanish tax obligations within six months from a different jurisdiction.
  • Assets in Spain and in the country of origin that must be administered simultaneously under two legal systems.
  • Wills executed abroad that are valid in Spain once apostilled and translated.
  • Application of the EU Succession Regulation (Reglamento Europeo de Sucesiones, Regulation 650/2012) to determine which national law governs the estate when elements from several EU countries are involved.

BMC manages all of these aspects from Tenerife, coordinating with associate lawyers in Germany, the United Kingdom and the Scandinavian countries to provide a comprehensive service to foreign heirs of residents on the island.

The 99.99% ISD rebate in the Canary Islands: conditions and application

The 99.99% rebate on Canarian ISD is grounded in the Ley 7/1984 del Impuesto sobre Sucesiones y Donaciones de Canarias and subsequent amendments. To apply it correctly:

Eligible heirs: Only heirs in Group I (descendants under 21) and Group II (descendants over 21, ascendants and spouse) benefit from the 99.99% rebate. Siblings and other collateral relatives (Group III) and unrelated persons (Group IV) are taxed at considerably higher rates.

Residence of the deceased: The Canarian rebate applies where the deceased had their habitual residence in the Canary Islands during the five years preceding death. If the deceased was resident in another region of Spain or abroad, different rules may apply and the Canarian rebate may not be available.

Filing on time: The rebate is forfeited if the self-assessment is filed after the six-month deadline (or the extended deadline) without having applied for an extension in advance.

Assets omitted from the inventory: The Canarian tax authority may check asset values or identify omitted assets. Correct identification and valuation of all assets is essential to avoid supplementary assessments.

Inheritance disputes in Tenerife: recurring patterns

Tourist and holiday properties: Tenerife has one of Spain’s most active tourism property markets. Apartments in tourist zones in the south (Costa Adeje, Los Gigantes, Puerto de Santiago) may have market values considerably higher than their rateable value, generating disputes over valuation and distribution among heirs.

Hospitality and tourism businesses: Tenerife’s business fabric is closely linked to tourism. Estates involving shareholdings in hotels, tourist apartment complexes, travel agencies or service companies require specialist valuations and careful management of the family business tax relief.

Farmland in the north of the island: Agricultural areas in the north of Tenerife (vineyards, banana plantations and avocado farms in the Valle de La Orotava) give rise to estates with difficult-to-value assets and frequent disputes among heirs with differing views on whether to continue farming or liquidate.

Assets of foreign deceased: Foreign residents who pass away in Tenerife may leave assets both on the island and in their country of origin. Coordinating the estate across two jurisdictions simultaneously requires an inheritance lawyer in Tenerife with expertise in private international law. We also advise on the potential application of the wealth tax where inherited assets exceed the Canarian taxation thresholds.

Succession planning in Tenerife

The Canarian ISD regime, with its 99.99% rebate for direct heirs, is already highly favourable. There are, however, situations in which advance succession planning can optimise the transfer of assets even further:

  • Group III or IV heirs: For siblings, nephews and nieces or unrelated persons, the ISD in the Canary Islands can be significant. Lifetime gifts, life insurance or corporate structures may reduce the tax burden in these cases.
  • Assets in other regions: Where the deceased holds assets in other autonomous communities where ISD rates are higher, planning may involve restructuring the ownership of those assets.
  • Cross-border elements: Choosing the applicable law by will (under Regulation 650/2012) may be relevant for optimising an estate from an international perspective.

At BMC we offer a succession planning service tailored to Tenerife and the Canary Islands, including a full estate assessment, tax modelling for different scenarios, and drafting the most tax-efficient will.

BMC has representation in Tenerife. Visit our Tenerife office for local advice.

FAQ

Frequently asked questions

The Canary Islands apply a 99.99% rebate on the Impuesto de Sucesiones (ISD) for heirs in Group I (descendants under 21) and Group II (descendants over 21, ascendants and spouse). In practice, an inheritance between parents and children in Tenerife is virtually tax-free — one of the most generous rebates in Spain, alongside those of Madrid and Andalusia. The rebate is applied to the full gross tax liability before payment.
The deadline to file the Impuesto de Sucesiones self-assessment with the Consejería de Hacienda del Gobierno de Canarias is six months from the date of death. A further six-month extension can be requested before the initial deadline expires. Missing the deadline triggers surcharges of between 5% and 20% plus interest. For heirs abroad, gathering documentation in time can be challenging — BMC coordinates the entire process.
The heir may accept the estate under benefit of inventory (aceptación a beneficio de inventario, limiting liability to the estate assets), accept unconditionally (taking on responsibility with personal assets as well) or renounce the estate before a notary. Acceptance under benefit of inventory is the most prudent option when there are known debts or uncertainty about liabilities. BMC analyses the assets and liabilities of the estate before recommending the most appropriate course of action.
If the deceased did not execute a will, the estate is administered as intestate under the Spanish Civil Code (the Canary Islands have no separate regional succession law). The intestate declaration of heirs is processed before a notary where heirs are descendants, ascendants or the spouse. The order of intestate heirs follows the Civil Code: children first, then parents, then the spouse, then other family members.
Yes. Non-resident heirs have the same tax obligations as residents in respect of assets located in Tenerife. They must file the ISD with the Consejería de Hacienda within six months and may benefit from the 99.99% rebate if they are direct heirs. If the deceased was not resident in Spain, tax competence may fall to the Spanish State (under national rules, which are less favourable). BMC manages estates with international heirs in Tenerife.
A will executed abroad is valid in Spain if it meets the formal requirements of the country where it was made. It must be apostilled or legalised as appropriate, and translated into Spanish by a sworn translator. The Spanish Registry of Last Wills does not register foreign wills, so a valid foreign will may exist even where the Spanish certificate shows no record. BMC handles the validation of foreign wills in Tenerife estate proceedings.
The fee depends on complexity: assets on the island and overseas, heirs in multiple countries, disputes and expert valuations. BMC offers a free initial consultation and a fixed fee for uncomplicated estates. Cross-border estate matters are priced according to the specific complexity involved.

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Frequently asked questions

Questions about Inheritance Lawyer in Tenerife

The Canary Islands apply a 99.99% rebate on the Impuesto de Sucesiones (ISD) for heirs in Group I (descendants under 21) and Group II (descendants over 21, ascendants and spouse). In practice, an inheritance between parents and children in Tenerife is virtually tax-free — one of the most generous rebates in Spain, alongside those of Madrid and Andalusia. The rebate is applied to the full gross tax liability before payment.
The deadline to file the Impuesto de Sucesiones self-assessment with the Consejería de Hacienda del Gobierno de Canarias is six months from the date of death. A further six-month extension can be requested before the initial deadline expires. Missing the deadline triggers surcharges of between 5% and 20% plus interest. For heirs abroad, gathering documentation in time can be challenging — BMC coordinates the entire process.
The heir may accept the estate under benefit of inventory (aceptación a beneficio de inventario, limiting liability to the estate assets), accept unconditionally (taking on responsibility with personal assets as well) or renounce the estate before a notary. Acceptance under benefit of inventory is the most prudent option when there are known debts or uncertainty about liabilities. BMC analyses the assets and liabilities of the estate before recommending the most appropriate course of action.
If the deceased did not execute a will, the estate is administered as intestate under the Spanish Civil Code (the Canary Islands have no separate regional succession law). The intestate declaration of heirs is processed before a notary where heirs are descendants, ascendants or the spouse. The order of intestate heirs follows the Civil Code: children first, then parents, then the spouse, then other family members.
Yes. Non-resident heirs have the same tax obligations as residents in respect of assets located in Tenerife. They must file the ISD with the Consejería de Hacienda within six months and may benefit from the 99.99% rebate if they are direct heirs. If the deceased was not resident in Spain, tax competence may fall to the Spanish State (under national rules, which are less favourable). BMC manages estates with international heirs in Tenerife.
A will executed abroad is valid in Spain if it meets the formal requirements of the country where it was made. It must be apostilled or legalised as appropriate, and translated into Spanish by a sworn translator. The Spanish Registry of Last Wills does not register foreign wills, so a valid foreign will may exist even where the Spanish certificate shows no record. BMC handles the validation of foreign wills in Tenerife estate proceedings.
The fee depends on complexity: assets on the island and overseas, heirs in multiple countries, disputes and expert valuations. BMC offers a free initial consultation and a fixed fee for uncomplicated estates. Cross-border estate matters are priced according to the specific complexity involved.
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