Turkey's 1% Inheritance Tax: The Quiet Part of Law 7582

The 20-year, 0% headline is the part that travels in marketing. The 1% line buried in the same law is the part that decides where a fortune sits in 100 years.

Law 7582 amended Turkey’s Inheritance and Transfer Tax Law alongside the headline income-tax exemption. While a person is benefiting from the 20-year exemption, transfers on their death are taxed at a flat 1%, against Turkey’s normal scale that climbs to roughly 30%. Lifetime gifts in the same window get the same 1% rate.

For wealth that crosses a generation, the gap is generational.

What the home-country rate would have been

Jurisdiction	Top rate on a substantial estate
United Kingdom	40% IHT above the nil-rate band
United States	40% federal estate tax above ~$13.6M exemption
France	Up to 60% on distant heirs
Germany	Up to 30% close family, up to 50% others
Japan	Up to 55%
Turkey under Law 7582	Flat 1%

Turkey’s normal scale ran from around 1% on small estates up to 30% on the largest. The amendment compresses the scale to 1% for the duration of the exemption window.

What triggers the 1%

Simple in principle. To get the 1% on an estate:

1. The deceased was a Turkish tax resident benefiting from Law 7582 at the time of death. The exemption status is the trigger; nationality and place of death are not.
2. The transfer is one the Inheritance and Transfer Tax Law applies to. Transfers on death and lifetime gifts both qualify.
3. The exemption window is still running. The 20-year clock attaches to the individual.

A Turkish citizen who never moved to Turkey does not get the 1%. The rate rides residence, and the inheritance rate rides the exemption. A foreign national who became a Turkish tax resident under the law and built a life here does get the 1%, and so does their estate.

A worked example

A $20M estate built by a founder who relocated to Turkey under Law 7582 in 2027 and passes away in 2035, still resident, still inside the window.

• UK IHT (if domiciled): roughly £7.7M after the nil-rate band, on a £16M-equivalent estate at 40%.
• US federal estate tax (US citizen, on amounts above ~$13.6M): roughly $2.5M on the taxable portion at 40%, before state estate tax.
• Turkish baseline pre-Law-7582: approximately $5M at the top of the old scale.
• Turkish position under Law 7582: $200,000 at 1%.

For a US-citizen estate, the US layer still runs and needs its own planning; the Turkish 1% is a clean win on the Turkish side. For a UK-domiciled estate, the UK fight is the main one; Turkish 1% is the floor. For someone who was never UK or US connected, the 1% gets close to the whole answer.

Lifetime gifts ride the same rate

Turkish gift tax sits inside the same law and runs on the same scale. Under the exemption window, gifts to children, grandchildren or third parties get the same 1% rate as bequests.

For estate planners this is the more interesting lever. Assets can move down a generation while the founder is alive, with the recipients on 1% at the moment of transfer rather than waiting to see what the political weather looks like in 30 years.

The home-country layer continues to apply: UK 7-year survival rule on lifetime gifts for domiciled persons, US gift tax for citizens, and so on. The Turkish 1% is one piece of a multi-jurisdictional plan, not the whole plan.

The cross-border mechanics still need a specialist

Where the 1% gets technical is the mixed estate: a Turkish-resident deceased holding US brokerage accounts, a London flat, a Dutch holding company, family trusts settled in Jersey. The amended law reads broadly enough to cover foreign assets of a Turkish-resident deceased, but how the 1% interacts with foreign situs taxes, with double-taxation treaties on inheritance (Turkey has few), and with trust structures was still being clarified in Treasury communiqués through mid-2026.

Practical posture for now: treat the 1% as firm for assets clearly within Turkish reach, assume foreign-situs assets may also face their home-country rules, and build the estate plan on a Turkish tax advisor working with home-country counsel.

Where this fits in a Turkish stack

For a founder using the 20-year foreign-income exemption and the $400,000 citizenship route, the 1% line is the third leg of a stool the marketing rarely shows:

1. A passport in 6 to 12 months on a recoverable property purchase.
2. 0% Turkish tax on foreign income for 20 years.
3. 1% Turkish tax on inheritance and gifts inside the same 20-year window.

The first leg gets you in. The second pays you to live there. The third decides how much of what you built reaches the next generation.

Read this before you redraft the will

• It is the Turkish layer, not the only layer. UK domicile, US citizenship, and other home-country bases continue to apply to their own estates. Estate-planning counsel in each relevant jurisdiction.
• Trusts, holding companies, foundations are not made redundant. The 1% rate is the floor a cross-border structure builds toward, not a substitute for one.
• Residence has to be real. Spending eight months in Monaco and four in Istanbul does not buy the rate. Genuine Turkish tax residence, with the documentation to defend it.
• The communiqués are still landing. Mixed estates need confirmation with a Turkish tax advisor on current Treasury guidance before any major transfer.

General information, not tax or estate-planning advice. Estates of meaningful size warrant a qualified professional in each relevant country.

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If part of your move to Turkey is about what your children inherit rather than what you spend, the 1% line is worth running the numbers on. Tell us where the wealth sits and where the heirs are, and we will map the citizenship, the residence and the estate plan together.