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Inheritance Tax Insurance in the Canary Islands

Tenerife International Business Centre SL are sole providers of Inheritance Tax Insurance through Liberty Seguros to the whole of the Canary Islands - Tenerife, Fuerteventura, Lanzarote, Gran Canaria, La Gomera, La Palma and El Hierro.



Learn how to pay little or nothing

About Inheritance Tax Insurance

As of January 2016, EU residents now benefit from a 99% reduction in Inheritance Taxes. However, there are still an estimated 16,000 Euros to pay in legal fees and funeral costs in order for your beneficiaries to inherit your Spanish assets.

Not all autonomos communities have the same tax rates and rules.
Reductions for funeral costs are only applicable if the invoice is made in the name of the deceased.
Only direct relatives (group 1 & 2 can deduct the 40.400€).
If the couple are not married the tax rate is multiplied.
If you fall into group 4, its cheaper to get married in Gibralter!
Remember you must include all assets in Spain.
If the deceased was born and lived in the UK at any time, then a certificate of probate or no probate is required.
If you are fiscally resident in spain, then there is a 99% reduction on the tax base of your home, not for second properties.

Ok so lets ask a few questions...

Have you considered the costs involved in inheriting a property, balance at the bank, deposits you may have etc?
Do you realize that your joint bank accounts can be frozen and only 50% of the balance on the date of death are available to be used? (direct debits and standing orders are not affected)
What if the 50% of the balance only covers the cost of the funeral, or not as the case may be?
What will you live on until the inheritance paperwork is done?
Do you realize that inheritance paperwork can take approximately 6 months on the good side, more if a probate certificate is required from the UK.

So who can buy inheritance insurance?inheritance-tax-insurance-canary-islands-spain-tenerife

Anyone who is Spanish.
Anyone who is British and has an NIE number.
Anyone who is German and has an NIE number.
Any nationality who is fiscally resident in spain.

What are the Benefits of having Inheritance Tax Insurance in Spain?

You have the right to repatriation.
You have the right to an advance to cover the cost of the funeral, up to 3,000€ or 10% of the capital insured.
You have the right to pay less or no inheritance taxes.


There's only one:
You are not covered if you decide to kill yourself within the first year of the policy (suicide).

What do we need to make the "guesstimate" on the capital required to cover the legal costs and inheritance tax?

A copy of any title deeds.
Copies of your IBI (rates) from this year.
Copies of any insurance policies you may hold in Spain.
Copies of any investments you may have.
Passports, NIE, residencias (Certificado de Registro).

(remember we are only talking about Spanish assests here)

Lets concentrate on the inheritance part of all this for one moment...

By looking at the IBI (rates) receipts, we have a rough idea of what the tax office considers your wealth to be in Spain.
We need to see the deeds to see how many official owners there are, and your Will to see how many will inherit.

So in our example, let's say, that the house is owned by the husband and wife, and its “taxable value” is 200,000€, this means that their inheritance worth is 100,000€. Two owners, divide value by 2 – simple – no? However in recent cases the tax office have valued properties at double plus 10% for inheritance purposes.

To that figure, you must add 3%, this is the value that the government consider is the value of the furniture (it’s second hand after all)
So we have a wealth of 100,000€, and 3000€ for the value of the second hand furniture totalling 103,000€.

Add to this 50% of any joint investments you may have, or all the value if only the deceased had the money!

Again lets imagine, that the husband had a savings plan for 50,000€, the wife as well but she is still alive and kicking.
So now we have an inheritance value of 153,000€
In the couples bank account on the date of death, there was 5000€, the wife only has access to 2500€.
So now we have an inheritance value of 155,500€.

Still with us?!

If the funeral is going to cost her 2000€ then she is left with 500€ to see her through, until the paperwork is sorted, unless of course she has a pension, she could draw down on her savings, but that will lose her vital interest, not a good idea!

Remember, this is not a real case, it’s just an example.

So let's suppose our dead husband was a healthy 50 year old who had no known medical problems, didn’t ride a bike and was a company director. We are able to roughly calculate, how much inheritance cover he should have had to protect his family from the dreaded “hacienda”.

We are not evading tax, nor are we avoiding tax, but making a sensible provision for the family.

So let’s turn this around...

With an inheritance policy you can:
Start working with your legal advisors who can in turn start the procedure without adding further grief of worrying where the money is coming from. Our 50 year old client would pay this year 115€ to protect his family. Who do you prefer to pay? The tax office a fortune, or a small amount annually on an inheritance policy?


Not all autonomous communities have the same tax rate.
The bill for the funeral must be in the deceased’s name.
Only direct relatives can claim the tax reduction.
You only have 6 months to present the paperwork without incurring fines.
You must include all Spanish assets.
If the deceased was a UK national, then probate must be applied and obtained.
Check back annually for any change in values, or circumstances.
Bring in a copy of your IBI receipt every year.


Each direct relative is entitled to  a reduction in tax due by 40.400€.
Get the tax office to do a valuation for inheritance true valuations, nobody is going to argue with their value, but for estimate purposes the rates bill will suffice.
3% is the value used for the furniture.
The funeral bill must be in the name of the deceased.
Add into the calculation, all other Spanish assets.
Make allowances for legal bills.

Pro’s and con’s

Assets other than money in a current account are considered “bienes/goods” and therefore untouchable until the inheritance has been done.
Nothing can be transferred into the remaining spouses name until the paperwork has been done and taxes paid.
Cars are considered “bienes” and cannot be sold immediately, so are bank investments.
You will require a bank certificate.
Our insurance company will advance up to 3000€ to pay for the funeral, on presentation of the death certificate.
Probate may be required.
Probate  can only be applied for by the administrator of the will or someone who is named in the British Will.
You only have 6 months and 1 day, to do all this without incurring fines from the Spanish authorities.
Probate in the UK, normally takes longer than 6 months.
There are special allowances for the disabled.


Basically means that the deceased passes ownership to his/her children directly, giving his wife full use over the property, the children cannot sell the property without his/her permission.

So let's imagine that the child is 24, and that the value of the fathers inheritance is 50,000€, 99 years – 24 (age of child) gives us 65, therefore 65% of 50,000€ is 32,500€. 50,000€ - 32500€ = 17,500€, therefore 17,500€ is the child's “nuda” value of the inheritance.

Other assets

Temporary or permanent pensions.
Transmission rights.
Valuable skins, leather  etc.

Administrative concessions

Art and antiques.
Contractual options.
Tax rebates.
Other goods and rights.
Allowed deductions.
Costs of the funeral.
Costs of the last illness.
Litigation in the common interest of the heirs.


This is only a guide.
Tax values change frequently.
Our calculations are rough, this is not the exact amount you will pay, leave the calculations to the professionals.

If you would like a quote on your Inheritance Tax and Legal Costs Insurance (through Liberty Seguros) and you live in the Canary Islands, do not hesitate. Get in touch with TIBC SL in Tenerife Now!

Be sure to Like our Facebook page for regular news updates and if you are looking to buy or sell properties in Tenerife, get in touch with our Estate Agents by emailing chris@tibc-sl.com


Inheritance Tax Insurance is available from Tenerife International Business Centre SL based in Las Galletas, Tenerife. This insurance product is provided by Liberty Seguros and is a Liberty Seguros Expatriate Insurance product.

Tenerife International Business Centre SL are exclusive agents to Liberty Seguros Expatriate. Read about our other great Insurance products... House Insurance from Liberty Seguros, Car Insurance from Liberty Seguros, Mortgage Protection Insurance from Liberty Seguros.

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Calle Cándida Peña Bello 8
Las Galletas (Santa Cruz de Tenerife)
  • Tenerife International Business Centre SL
  • Calle Cándida Peña Bello 8
  • 38631 Las Galletas (Santa Cruz de Tenerife)
  • 922 730 210
  • 0034 637 838 718

© Tenerife International Business Centre SL 2024

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