Inheritance in the Canary Islands: key tax aspects

The particularities of the Canary Islands tax regime for inheritance offer a significant advantage to heirs in 2026. Learn about the available tax allowances and how to plan a succession correctly.

Inheritance Tax in the Canary Islands

Inheritance and Gift Tax (ISD, Impuesto sobre Sucesiones y Donaciones) is a tax devolved to Spain's Autonomous Communities, which means the Canary Islands have the power to regulate certain aspects, including reductions and tax allowances.

Under the current 2026 tax framework, Canary Islands legislation maintains a very favourable scenario for taxpayers, especially for direct family members, consolidating the advantages introduced in previous years.

Current tax allowances (Groups I and II)

For descendants (children, grandchildren), adopted persons, spouses, ascendants (parents, grandparents) and adopters (kinship Groups I and II), the Canary Islands apply a 99.9% allowance on the tax liability.

In practice, this means that the tax cost of inheriting for the closest family members is almost nil. For example, in an inheritance where the amount payable would be 10,000 euros, after applying the allowance the heir would pay only 10 euros.

What about other relatives? (Group III)

For siblings, uncles, aunts, nephews and nieces (Group III), the situation is different. Although they do not enjoy the automatic 99.9% allowance, there are reductions in the taxable base and tax rates that vary according to the heir's pre-existing wealth.

This is where good prior tax planning can make a substantial difference to the final bill.

Key aspects to bear in mind

1. The main home

There is a specific reduction for the acquisition of the deceased's main residence. In the Canary Islands, this reduction can reach up to 99% of the property's value, subject to certain limits and holding requirements (generally not selling it for 5 years).

2. Family business

To ensure the continuity of family businesses, there is a 95% reduction in the taxable base for the acquisition of sole proprietorships, professional businesses or shareholdings in entities, provided that requirements to maintain the activity are met.

3. Life insurance

Amounts received by the beneficiaries of life insurance policies are also taxed under Inheritance Tax, but they benefit from specific reductions that vary according to the degree of kinship.

The importance of a will

Beyond taxes, making a will is essential to avoid legal and family problems. It allows you to:

• Designate heirs and distribute specific assets (legacies).
• Favour particular heirs (within the limits of the forced heirship rules, "legítima").
• Appoint guardians for minor children.
• Greatly simplify the subsequent procedures for the heirs.

"A poorly planned inheritance can become a tax and emotional burden for the heirs. Anticipation is the best investment."

Required documentation

To process an inheritance in the Canary Islands you will need to gather:

1. Death certificate.
2. Certificate of Last Wills (Certificado de Últimas Voluntades).
3. Certified copy of the will (or a declaration of heirs if there is none).
4. Bank certificates of balances as at the date of death.
5. Property deeds.

Deadlines

The deadline to settle the tax is 6 months from the date of death, extendable by a further 6 months if requested within the first 5 months.