New Advantages in Inheritance and Transfer Tax

Under the new regulation adopted by the Grand National Assembly of Türkiye and published in the Official Gazette, a significant change has been introduced to the inheritance and transfer tax. One of the most notable advantages is the reduction of the inheritance and transfer tax rate for certain inherited assets that benefit from income tax exemptions, thereby easing the tax burden on heirs.

What Has Changed in Inheritance and Transfer Tax?

Law No. 7582 introduced amendments to Law No. 7338 on Inheritance and Transfer Tax. According to the new regulation, the inheritance and transfer tax rate applicable to the transfer by inheritance of certain gains and revenues exempt from income tax under Article Provisional 20/D of the Income Tax Law has been reduced from 10% to 1%.

Who Benefits from the New Tax Advantage?

The regulation primarily applies to inheritance and transfer transactions involving specific income and earnings obtained abroad that are exempt from income tax. Assets that have benefited from income tax exemptions and are transferred through inheritance may now be subject to a significantly lower inheritance and transfer tax rate. As a result, heirs will pay less tax on the assets they inherit.

What Does the Reduction in the Tax Rate Mean?

Before the amendment, a 10% inheritance and transfer tax rate applied to transfers within the relevant scope. Following the legislative change, this rate has been reduced to 1%.

For example:

• Under the previous system, an asset valued at TRY 10 million could result in approximately TRY 1 million in inheritance and transfer tax.
• Under the new regulation, the tax on the same asset may be reduced to approximately TRY 100,000.

This change can provide substantial financial advantages, particularly in the transfer of high-value estates.

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Importance for Estate Planning

The reduction in the tax rate is not only beneficial for current heirs but also represents an important development for individuals engaged in long-term wealth and estate planning. For those with international income sources, the tax costs associated with transferring wealth to future generations may be significantly reduced. This can contribute to more efficient and strategic asset transfer planning.

Economic Impact of the Regulation

The tax advantage introduced in the inheritance and transfer tax is expected to:

• Encourage the transfer of assets through inheritance,
• Strengthen the connection between international investments and Türkiye,
• Facilitate capital transfers by reducing tax burdens.

The reduction in costs associated with intergenerational wealth transfers is considered a positive development, particularly for investors holding high-value assets.

The amendment introduced by Law No. 7582 brings one of the most significant inheritance and transfer tax advantages in recent years. Reducing the applicable tax rate from 10% to 1% for inherited assets that qualify for certain income tax exemptions substantially lowers the financial burden on heirs.

The impact of this regulation will be especially noticeable in the transfer of high-value assets, creating important opportunities for both estate planners and investors generating income from international sources.