Inheritance law on the Canary Islands

1. Which law applies to inheritance cases on the Canary Islands?

As of 17th August 2015, the settlement of inheritance cases on the Canary Islands is subject to the European Succession Regulation. This regulation also applies to German nationals who have passed away in Spain. Under the European Succession Regulation, the applicable law is generally determined by the deceased person’s last habitual residence.

2. Who is entitled to inherit on the Canary Islands if the deceased had no children or spouse?

If the deceased was neither survived by children nor by a spouse, other family members shall appear as their legal heirs. In such a case, the parents of the deceased inherit first. If the parents are also deceased, the siblings of the deceased will inherit. This provision ensures that the inheritance remains within the family and is passed on to the next of kin.

3. Do heirs on the Canary Islands need to formally accept the inheritance?

Under German inheritance law, the estate automatically passes to the heirs without the need for a formal acceptance declaration. Yet there is an important exception. If the estate includes real estate in Spain, the heirs must formally accept the inheritance in the presence of a Spanish notary or consul. Additionally, the property must be registered in the Spanish Land Registry. This is required as the Spanish Land Registry will only record heirs who can provide a corresponding notarised deed.

4. Is a German will valid on the Canary Islands?

A will drawn up according to German law, whether holographic or notarised, is generally recognised in Spain. This means that a will valid in Germany will also be valid in Spain. This, however, does not apply to individuals living in Spain yet wishing to make a joint will, e.g. the so-called Berlin will. In such a case, it is advisable to expressly choose German law, as these types of wills may be invalid under Spanish law.

5. Who will inherit on the Canary Islands if no will is recorded?

In the absence of a will or if no explicit heirs have been appointed, the Spanish legal succession regulation applies, according to which the children and the spouse of the deceased will inherit as primary heirs. This provision ensures that the estate is passed on to the closest family members of the deceased.

6. How can I find out if a will has been made on the Canary Islands?

In Spain, every will drafted in the presence of a notary is reported to the Central Register of Wills in Madrid. After the passing of the testator, the surviving dependants can easily query there whether a will has been made. This provides clarity and facilitates the settlement of the estate in the heirs’ best interest.

7. What provisions can be stipulated in a will?

The contents of a will in Spain typically resemble those in Germany. One can appoint heirs, allocate specific assets to certain individuals, specify conditions or deadlines for the inheritance, formulate instructions regarding the distribution of the estate, or appoint an executor.

8. Who is entitled to a compulsory portion?

Similarly to Germany, Spain also has a special provision for compulsory portions. Nonetheless, unlike in Germany, this constitutes a “genuine compulsory inheritance,” which restricts the testator’s freedom of disposal. According to this provision, the deceased person’s children and their descendants ‒ alternatively the parents and the surviving spouse of the deceased ‒ are entitled to a minimum share of the estate. The testator cannot dispose of this portion freely in a will thus disinheriting any of the compulsory heirs. In Spain, the compulsory portion for children usually constitutes two-thirds of the estate while for parents it amounts to half of it. The spouse is granted a usufructuary right to the property. If the testator dies without a will or the will is invalid, statutory succession takes effect. As a rule, children and their descendants of the deceased are entitled to a compulsory portion in this case. If the deceased person was not survived by any children or descendants, their parents or ancestors will be entitled to a compulsory portion. The spouse has a right to a compulsory portion as well.

9. How is a property on the Canary Islands transferred to German heirs?

For a property located on the Canary Islands to be transferred to German heirs, two steps are initially required. First, the inheritance must be accepted in the presence of a Spanish notary. Secondly, the Spanish inheritance tax return must be filed, and an application for registration in the Spanish Land Registry must be submitted.

10. How high is the Canary Islands inheritance tax?

The amount of Spanish inheritance tax varies depending on the degree of kinship between the deceased and the heir as well as on the worth of the estate. Tax rates range from 7.65% to 81.6%. In certain cases, there may also be special tax reductions.

11. Is inheritance tax payable on the Canary Islands only if the deceased had resided in Spain?

No, the residence of the deceased is not decisive for inheritance tax purposes. Rather, the beneficiary’s tax domicile is of relevance. This means that heirs who do not reside in Spain may also be liable for Spanish inheritance tax.

12. Does an heir residing on the Canary Islands have to pay inheritance tax there?

An heir who had their habitual residence in Spain is subject to Spanish inheritance tax on their entire acquisition. This means that all assets, regardless of where they are located, are to be taxed.

13. Do non-resident heirs have to pay inheritance tax on the Canary Islands?

A non-resident heir must pay Spanish inheritance tax only on assets located in Spain. Among these are developed and undeveloped plots of land as well as spending and savings accounts in Spain.

14. How is a property on the Canary Islands assessed?

As of 1st January 2022, the reference value of real estate serves as the basis for Spanish inheritance tax purposes.

Att. Sascha Jung

Svetlana Evgrafova