Inheritance and Transfer Tax in Türkiye: What Foreign Investors and Family Offices Need to Know in 2026

Türkiye’s inheritance tax rates are low by international standards, and the exemption thresholds are generous. For foreign investors and family offices, this makes Türkiye a comparatively straightforward jurisdiction for estate planning — particularly when compared to many Western European countries. The core question for most international investors is not whether Türkiye’s inheritance tax will be a burden, but how to structure ownership of Turkish assets so that transfers happen efficiently across generations.

One important update from June 2026: Law No. 7582, published on 4 June 2026, amended the Inheritance and Transfer Tax Law so that individuals benefiting from the 20-year foreign income exemption pay a flat 1% inheritance tax rate during the exemption period, against the standard progressive rate that can reach 10%. This is a significant change for qualifying new residents and is covered in detail below.

1. The Basic Framework: What Is Taxed and Who Pays

Türkiye taxes two types of transfers under the Inheritance and Transfer Tax Law:

• Inheritance: assets passed on at death
• Gratuitous transfers: gifts, donations, and similar non-reciprocal transactions (including lottery winnings)

The person receiving the asset — not the estate or the deceased — is the taxpayer.

Who is subject to Turkish inheritance tax?

Nationality does not determine tax liability — location of assets does. The tax applies to:

• Any movable or immovable asset located in Türkiye that passes by inheritance or gift, regardless of the nationality of the parties
• Assets of Turkish citizens living abroad, to the extent those assets are located in Türkiye

For foreign investors, the practical implication is straightforward: if you own real estate or shares in a Turkish company, those assets will be subject to Turkish inheritance tax when transferred by death or gift. Your assets held outside Türkiye are generally governed by your home country’s laws.

2. Tax Rates and Exemptions for 2026

The rates and thresholds below are set by the 57th General Communiqué on Inheritance and Transfer Tax, effective 1 January 2026.

Standard progressive rates

The taxable base is the assessed value of assets after deducting debts and allowable expenses. Tax can be paid in instalments over three years.

Exemption thresholds for 2026

Amounts below these thresholds are fully exempt. For foreign investors with mid-sized portfolios in Türkiye, these exemptions often mean that assets can be transferred between generations at a low or even zero effective rate.

1% flat rate for qualifying new residents — enacted June 2026

For persons benefiting from the 20-year foreign income exemption under Article 20/D of the Income Tax Law, inheritance transfers occurring within the exemption period are taxed at a flat 1% rate. This applies regardless of the size of the estate and replaces the standard progressive scale for eligible individuals. For anyone planning to relocate to Türkiye and take advantage of the 20-year foreign income exemption, this companion benefit significantly reduces the cost of passing assets to the next generation.

3. How Turkish Law Applies to Foreign Nationals

Which law governs?

Under Türkiye’s Private International Law (Law No. 5718):

• The inheritance of a foreign national is generally governed by their national law
• However, immovable property located in Türkiye is always governed by Turkish law, regardless of the owner’s nationality

In practice, this means:

• A foreign investor’s overseas assets follow their home country’s inheritance rules
• Their Turkish real estate and, in most cases, their shares in Turkish companies follow Turkish inheritance law
• Regardless of which law applies substantively, Türkiye will impose tax on transfers of assets located within its borders

Rights of foreign heirs

Foreign individuals can inherit movable and immovable assets in Türkiye. For real estate specifically, the principle of reciprocity applies: Turkish nationals must enjoy comparable inheritance rights in the heir’s country of citizenship. In practice this rarely creates problems for investors from most major jurisdictions.

4. The Process for Foreign Heirs: What Actually Needs to Happen

If you are a foreign heir inheriting Turkish assets, the process involves four main steps:

Step 1 — Certificate of inheritance This must be issued by a Turkish Civil Court of Peace. Foreign inheritance certificates are not automatically recognised in Türkiye, so a separate Turkish court process is required.

Step 2 — Filing the tax declaration Heirs must file an inheritance and transfer tax return with the local tax office. The deadline is generally 4 to 8 months from the date of death, depending on where the deceased was resident and where the death occurred.

Step 3 — Paying the tax and obtaining clearance The tax can be paid in three annual instalments. Once paid in full, the tax office issues a clearance certificate confirming no outstanding liability.

Step 4 — Registering the transfer Real estate transfers are completed at the Land Registry Directorate, using the inheritance certificate and tax clearance document. Bank accounts, company shares, and other assets follow their own institutional procedures.

Given the complexity of cross-border estates, appointing a local lawyer and tax adviser before these issues arise — rather than after — is strongly advisable.

5. Structuring Options for Family Offices

Direct ownership vs. a holding structure

Direct personal ownership — the simplest approach. Each heir benefits from individual exemptions, which can reduce the total tax liability across a family. The downside is that each generational transfer triggers a fresh tax and filing process in Türkiye, and cross-border estates become fragmented across different legal systems.

Ownership through a Turkish or international holding company — allows consolidated governance and long-term family management. Generational succession can be managed through share transfers rather than direct asset transfers. The trade-off: share transfers are still subject to inheritance tax, and corporate structures bring their own tax dimensions — corporate income tax, withholding tax, and reporting obligations.

A layered approach that many family offices use: Turkish assets held by a Turkish holding company, which is itself owned by a parent entity abroad. This provides operational flexibility and multi-jurisdictional planning opportunities, while keeping Turkish assets under a single governance structure.

Planning for liquidity

Even with low rates, inheritance tax must be paid in cash. When an estate consists primarily of real estate, this can create a liquidity problem. Family offices typically address this through:

• Maintaining liquid reserves in Türkiye or offshore earmarked for this purpose
• Life insurance policies that provide a cash payout on death
• Shareholder or family agreements that set out buyout arrangements among heirs in advance

6. How Türkiye Compares Internationally

With a top inheritance tax rate of 10% and generous per-heir exemptions, Türkiye’s inheritance tax is mild compared to most OECD countries. The 1% flat rate available to qualifying new residents under Law No. 7582 is exceptional by any international standard.

The most significant complexity for foreign investors does not typically come from Turkish tax law — it comes from their home country’s treatment of the global estate. Many countries tax their residents or citizens on worldwide assets, regardless of where those assets are located. An integrated approach that considers residence, nationality, corporate structure, and asset composition across all relevant jurisdictions remains the right framework for 2026 and beyond.

Summary

Türkiye’s inheritance and transfer tax is manageable for most foreign investors and family offices. The standard top rate is 10% with substantial per-heir exemptions — and for qualifying new residents under the June 2026 reforms, a flat 1% rate applies during the 20-year exemption period. The main planning decisions are structural: whether to hold Turkish assets directly or through a holding company, how to ensure liquidity for tax payments, and how to coordinate Türkiye’s rules with the investor’s home-country estate tax obligations. The tax itself is rarely the biggest challenge — the cross-border coordination usually is.