What is the Inheritance Tax relief in the Balearic Islands for parents and children?

For recent taxable events in the Balearics, inheritances and succession agreements between Group I and II individuals (parents, children, grandparents, grandchildren, spouses and registered partners) benefit from a 100% regional relief on the corrected full tax liability, provided the legal requirements are met.

What happens with siblings, aunts/uncles and nieces/nephews (Group III)?

Second and third degree collaterals can apply a partial relief on the corrected full liability, higher when no descendants of the deceased are present or they have been disinherited. The specific percentage depends on the regional rules in force at the taxable event date.

If there is a 100% relief, do I still have to file a tax return?

Yes. The relief does not remove the obligation to file within the deadline. In the Balearics the general deadline is six months from the date of death, extendable in certain circumstances.

Are there special requirements for property to qualify for the reliefs?

Yes. The declared value cannot exceed the reference value increased by the legally fixed percentage or, failing that, market value. It is therefore essential to check the cadastral reference value before signing and settling the tax.

Inheritance · IHT · Reliefs

Inheritance Tax Reliefs in the Balearic Islands

In the Balearic Islands, regional reliefs have significantly reduced the impact of Inheritance and Gift Tax on estates and succession agreements. Our role is to translate those rules into legal certainty, clear figures and well-planned decisions for your estate.

Quick summary of reliefs

Parents, children, grandparents, grandchildren, spouses/partners: 100% regional relief on the tax liability if requirements are met.
Siblings, aunts/uncles and nieces/nephews: partial relief depending on the rules in force at the taxable event date.
Non-residents: regional Balearic rules may apply in many cases, but the form and competent authority change (AEAT instead of ATIB).
Property: the declared value must respect the reference or market value to preserve the relief.

Regional rules have been amended over time. We always analyse the taxable event date and the specific case before closing any strategy.

What has changed in Balearic Inheritance Tax

Recent regional reforms have introduced very significant reliefs in Inheritance and Gift Tax (ISD) for recent taxable events in the Balearic Islands. In practice, many inheritances between close relatives no longer carry an effective tax burden — but filing and proper planning remain mandatory.

Inheritances and succession agreements (gifts with definition, living inheritances, etc.) benefit from the same reliefs if correctly structured.
The relief applies to the corrected full tax liability, after applying the relevant reductions and multiplier coefficients.
The taxable event date (date of death or execution of the succession agreement) is key to determining which specific rules apply.

Kinship groups and relief levels

The starting point for determining whether an inheritance is effectively relieved is identifying the kinship group of each heir.

Groups I and II: descendants, adoptees, ascendants, adoptive parents, spouses and registered partners. For recent taxable events in the Balearics, the regional relief on the corrected full liability reaches 100%, neutralising the tax provided formal and substantive requirements are met.
Group III: siblings, aunts/uncles, nieces/nephews and other 2nd and 3rd degree collaterals. They benefit from a partial relief on the corrected full liability, higher when no descendants of the deceased are present or they have been disinherited.
Group IV and certain special cases: no equivalent general relief is available, so it is worth analysing whether other reductions or planning options apply.

Balearic Inheritance Tax relief table by group

Group	Relationship	Relief	Condition
Group I	Descendants under 21 years old	100%	If formal and value requirements are met
Group II	Descendants ≥ 21, spouse, registered partner, ascendants and adoptive parents	100%	If formal and value requirements are met
Group III	Siblings, aunts/uncles, nieces/nephews, 2nd and 3rd degree collaterals	Partial	Higher if no descendants of the deceased
Group IV	4th degree collaterals, non-relatives	No general relief	Review other available reductions

Regional regulations have been amended on several occasions. We always verify the tax trigger date and the specific case before closing any strategy.

ATIB, AEAT and non-residents: who collects the tax

Inheritance Tax is a national tax transferred to the regional governments. For residents of the Balearic Islands, administration and collection fall to the ATIB (Balearic Islands Tax Agency), applying Balearic regional rules.

Where non-residents are involved (deceased or heirs), the obligation to file the self-assessment may fall to the AEAT — normally using form 650 for non-residents — while in many cases retaining the right to apply Balearic regional rules if the relevant connection conditions and asset location requirements are met.

At Cantallops Legal we analyse whether the filing should go to ATIB or AEAT and verify whether the Balearic regional reliefs apply at the maximum level permitted by law.

Property and reference value: a key requirement

For inheritances involving property in the Balearic Islands, regional rules require that the declared value does not exceed certain limits relative to the cadastral reference value or, failing that, market value. Declaring above these limits without justification can put the relief at risk.

We check the reference value of each property and its compliance with current regional rules.
We structure the estate plan so that the division of assets and their valuations are consistent with the relief conditions.
Where no reference value exists, we assess a reasonable market value using legal and tax criteria.

Common mistakes in Balearic inheritances

Assuming that a '100% relief' means there is no obligation to file or no risk of penalties.
Failing to check the taxable event date and applying reliefs that were not in force at that time.
Not coordinating Inheritance Tax with municipal capital gains tax or other taxes (IRPF, wealth tax, etc.).
Declaring property values that are incompatible with the limits required to apply the regional reliefs.
In cross-border inheritances, filing with the wrong authority (ATIB vs AEAT) or applying the wrong regional rules.

Our approach is preventive: organising the estate, documenting decisions properly and leaving a complete legal and tax file ready for the future.

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