Someone in your family has passed away, and the estate includes a flat in Costa Adeje, a bank account in Santa Cruz, or the family home you all used to visit at Christmas. Now you have documents in Spanish you can’t read, an address in Arona to file paperwork at, and a solicitor back home telling you they can only handle “the UK side of things”.
Good news first. Since the September 2023 reform, most families pay almost no inheritance tax in the Canary Islands. Bad news, the Spanish legal process still has to happen, and no UK or Irish solicitor can complete it from home.
I’m Ingrid Castillo, and I run my law firm in Arona with a bilingual practice built around non-residents who inherit in Tenerife. This guide walks you through what you’ll actually pay, which documents you need, what happens in front of the Spanish notary, and how long the whole thing takes.
The 99.9% inheritance tax reduction in Canary Islands and what it really means
The Canary Islands government approved a 99.9% reduction on inheritance tax in September 2023. It applies to heirs in Groups I, II and III, which covers spouses, children of any age, parents, grandparents, siblings, and nieces and nephews.
In practice, that means the inheritance tax bill on a €250,000 flat in Costa Adeje, inherited by a UK-resident son from his mother, drops from roughly €35,000 to around €35. The reduction is applied on the tax calculated under the state scale, not on the value of the estate, so it wipes out almost the entire final bill.
Two things the reduction doesn’t do. It doesn’t remove the obligation to file the tax return within six months, and it doesn’t cover the other costs of transferring the estate, such as plusvalía municipal, notary fees and Land Registry fees. We’ll come back to those further down.
If you belong to Group IV (cousins, unmarried partners not registered as pareja de hecho, friends), the reduction doesn’t apply to you, and the bill can be significant. In that case, the calculation matters a lot, and it’s worth running the numbers before you accept.
Groups of heirs and what each one pays
Spanish inheritance tax classifies every heir into one of four groups, based on their relationship with the deceased. Your group decides your tax-free allowance and whether the 99.9% reduction applies to you.
| Group | Who’s included | Reduction applied |
|---|---|---|
| Group I | Children (biological or adopted) under 21 | 99.9% |
| Group II | Children 21 or older, spouse, parents, grandparents | 99.9% |
| Group III | Siblings, aunts, uncles, nieces, nephews, in-laws | 99.9% on the first €55,000 of tax, then sliding scale |
| Group IV | Cousins, unmarried partners without pareja de hecho registration, unrelated beneficiaries | None |
Unmarried partners are only treated like spouses if they are registered as pareja de hecho at their local town hall in the Canary Islands before the date of death. Without that registration, an unmarried partner falls into Group IV and pays the full state scale.
Group I and Group II heirs also get personal allowances that reduce the taxable base before the tax is calculated, but with the 99.9% reduction wiping out most of the final bill, those allowances rarely change the outcome. Group IV, on the other hand, has no allowance and no reduction, so the calculation runs at the full state scale, from 7.65% at the bottom to 34% at the top.
Who pays Spanish inheritance tax when the deceased or heir lives abroad
The rule is territorial. Any asset located in Spain, whether it’s a flat in Los Cristianos or a Sabadell account in Santa Cruz, is taxed in Spain regardless of where the deceased or the heir lives. What changes is which regional rules apply to the calculation.
Three scenarios cover almost every case I see.
- Deceased and heir in the UK: Spanish inheritance tax applies to the Tenerife property. Since 2018, UK residents can generally benefit from the Canary Islands’ 99.9% reduction. UK inheritance tax is calculated separately, with relief to prevent double taxation
- Deceased in Tenerife and heir in the UK: The estate is generally handled under Spanish succession rules, and the heir can apply the Canary Islands tax benefits directly. This is often the most tax-efficient situation.
- Deceased in the UK and heir in Tenerife: The Spanish-resident heir is taxed in Spain on their worldwide inheritance and may apply Canary Islands rules where applicable.
If your situation involves several countries or does not fit these cases, seek advice before accepting the inheritance. Renouncing it later is possible, but deadlines and formalities apply
Do you need a Spanish will
Not legally, no. You can inherit in Tenerife without a Spanish will if the deceased had a valid one back home. But every case I’ve handled without a Spanish will has taken longer, cost more in translations and apostilles, and required more back-and-forth with the UK solicitor before we could open the file at the Spanish notary.
Under the European Succession Regulation, the applicable inheritance law is that of the deceased’s habitual residence. So if a UK resident dies with a valid English will, English inheritance law applies to the estate, and Spanish law applies only to the mechanics of transferring the Spanish assets. A UK resident can also choose in a Spanish will to have English law apply to the succession, which is a useful bridge if you want to keep control over how the estate is distributed.
If you’re still in the process of buying property in Tenerife, a Spanish will is one of the things worth thinking about before you sign. I cover the timing in my Tenerife property buying guide, because most non-residents don’t realise how much a €100 will can save their family later.
Why every heir needs a NIE
The NIE (Número de Identidad de Extranjero) is a tax identification number for foreigners in Spain. Without one, no heir can sign the inheritance deed at the notary, pay the inheritance tax return, or register a Spanish property in their name.
Every heir needs their own NIE, including minors. There are two ways to get one from abroad.
The first is an application in person at your nearest Spanish consulate. In the UK, that’s London, Manchester or Edinburgh. Waiting times fluctuate between two and six weeks, depending on the consulate.
The second is by granting a power of attorney to your Spanish lawyer, who then applies for the NIE at the Foreigners’ Office in Tenerife on your behalf. This is faster in practice, two to three weeks, and doesn’t require you to travel.
The application itself costs around €10 in official fees. Any professional cost sits on top and depends on who handles it for you.
The Spanish notary and the escritura de aceptación de herencia
This is the step that catches most UK families by surprise. Your solicitor at home can wrap up the estate on their side, but they can’t transfer a Spanish property, close a Spanish bank account or file a Spanish tax return. Those actions require a Spanish notary and a document called the escritura de aceptación de herencia, the deed of acceptance of inheritance.
Before we can go to the notary, we need to gather a specific set of documents.
- Certificate of Last Wills from the Registro General de Actos de Última Voluntad, which confirms whether the deceased signed a Spanish will. This certificate can only be requested 15 working days after the date of death.
- Death certificate, apostilled and officially translated into Spanish if issued abroad.
- The English will and grant of probate (or the Spanish will if there is one), apostilled and translated.
- NIE numbers for every heir.
- Property title deeds (escritura de compraventa), cadastral reference, latest IBI receipt.
- Bank statements showing the balance at the date of death.
Once the file is complete, the notary drafts the escritura, all heirs sign it (in person or by power of attorney), and the property, accounts and other assets are formally accepted. Notary fees for a straightforward estate with one property typically run between €600 and €1,200, depending on the value.
If you can’t travel to Tenerife, a bilingual power of attorney signed at a Spanish consulate or before a UK notary public (then apostilled) lets me handle every step in Tenerife on your behalf, including the final signing of the escritura.
The 6-month deadline and how it really works
You have six months from the date of death to file the inheritance tax return (Modelo 650) and pay any tax due. That deadline applies whether or not there’s actual tax to pay after the 99.9% reduction, so filing is mandatory in every case.
A one-off six-month extension is available, but you have to request it within the first five months from the date of death. Miss both deadlines and you’re looking at automatic surcharges of 5% to 20% of the tax due, plus interest from the day the original deadline passed.
Six months sounds generous until you start collecting apostilled documents from the UK. Waiting for probate, translating documents, obtaining the Certificate of Last Wills, applying for NIE numbers, all of it eats time. Most of the cases I’ve handled from the UK have used at least three months of prep before we were ready to go to the notary. If the family waits until month five to start, the file gets tight fast.
Other costs beyond the inheritance tax
The 99.9% reduction wipes out inheritance tax for most families, but it doesn’t cover everything else that happens when property changes hands. Three costs sit on top.
- Plusvalía municipal. A local town hall tax on the notional increase in land value between the date the deceased bought the property and the date of death. It’s paid by the heir when property is transferred by inheritance. In Arona, Adeje and most other Tenerife municipalities, close relatives (spouses, children, parents) get a bonificación of up to 95% on this tax, which cuts the bill substantially, but it has to be applied for.
- Notary and Land Registry fees. Between them, typically 0.5% to 1% of the property’s value. For a €250,000 flat, expect somewhere between €1,200 and €2,500 combined.
- Translation and apostille costs. Every UK document that needs to be filed in Spain (death certificate, will, probate) has to be apostilled by the FCDO and translated by a sworn translator recognised in Spain. Budget €300 to €600 for a standard estate.
For that same €250,000 flat in Costa Adeje inherited by a UK son from his mother, the realistic all-in cost, once the 99.9% reduction is applied, sits roughly between €3,500 and €5,500, plus legal fees. That’s the number to plan around.
When you can handle it yourself and when you actually need a lawyer
There are cases where you can save the legal fees and still get through this cleanly. They tend to share the same features. One heir, no siblings involved. No mortgage or debts attached to the Spanish property. A clear, uncontested will. A single asset, usually one flat, no complications with the bank account. All parties in agreement, nobody considering renunciation. Time on your side.
Where a lawyer is worth the fee is when the file has one or more of these features. Two or more heirs, especially if any of them disagree about whether to sell or keep the property. A mortgage or unpaid debts attached to the Spanish flat. A will drafted abroad that needs interpretation under Spanish law. Assets spread across the UK, Ireland and Spain that need coordinating for tax purposes. One or more heirs who can’t or won’t travel. Any heir considering renunciation,etcetera.
If your case is closer to the second example, that’s when I get involved. I handle every inheritance file personally in English and Spanish, and I work by power of attorney for heirs who can’t travel. Please feel fre to find out more about how I work with these situations as an English-speaking lawyer in Tenerife.
Frequently asked questions
Do I have to travel to Tenerife to inherit?
No. A bilingual power of attorney, signed at a Spanish consulate or before a UK notary public and apostilled, lets your Spanish lawyer handle every step in Tenerife on your behalf.
As a UK resident, can I still access the 99.9% reduction after Brexit?
Yes. Since a February 2018 Spanish Supreme Court ruling and Law 11/2021, non-residents from third countries have the same right to apply the Canary Islands’ regional rules as EU residents. You’ll need to apply them correctly on Modelo 650, which is where most self-filed returns go wrong.
What happens if the estate has more debts than assets?
You can accept the inheritance a beneficio de inventario (with benefit of inventory), which caps your liability for the deceased’s debts at the value of the assets you inherit. You can also renounce the inheritance entirely before a Spanish notary, within the six-month deadline. Both options have consequences, so it’s worth getting advice before you decide.
Can I refuse my share and pass it to my children?
You can renounce, but Spanish law is strict about how the share is redistributed. If you renounce, your share goes to the next heirs under the will or under the intestate rules, which may or may not be your children directly.
Do I have to declare the Tenerife property in my UK tax return?
If you’re a UK resident, yes, for inheritance tax purposes and, if you keep the property and rent it out, for income tax as well. The UK-Spain double taxation treaty lets you offset the Spanish tax against the UK tax on the same asset, but the declaration is still required. Your UK accountant handles this side. My job is to make sure the Spanish side gives them clean numbers to work with.
