1% inheritance tax: estate planning under the new regime

The 20-year income exemption takes the headlines, but for families thinking a generation ahead, the inheritance provision of the new regime may matter more. Qualifying residents pay a flat 1% on inheritance transfers within the exemption period.

What standard Turkish rates look like

Türkiye’s inheritance and gift tax runs on two separate progressive scales. Inheritances are taxed from 1% on the first bracket up to 10% at the top. Lifetime gifts are taxed far more heavily, from 10% up to 30%. The 1% flat rate for qualifying residents replaces the inheritance scale entirely during the exemption period.

Set against Western European rates, the comparison is stark. Dutch children pay up to 20% above the exempt amounts; German rates reach 30% in the closest tax class for large estates; the UK takes 40% above the nil-rate bands. A EUR 20 million estate passing to children can carry a seven-figure difference between jurisdictions.

The planning caveats

Two cautions belong in every serious conversation. First, your former home country may retain taxing rights for a period after emigration: the Netherlands, for instance, can treat Dutch nationals as resident for inheritance and gift tax for ten years after departure. The Turkish rate does not switch those rules off; sequencing and treaty analysis do the real work.

Second, the 1% applies to transfers within the exemption period for qualifying residents. Succession planning should assume the regime works as written but should not depend on a single provision: wills valid in both jurisdictions, clear asset situs and, where useful, holding structures reviewed by counsel on both sides.

Where property fits

Turkish real estate passes under Turkish rules regardless of where else you are taxed, which under the new regime means the favourable end of the scale for qualifying families. A Bodrum estate held for the long term, five years clears capital gains on sale entirely, is an unusually clean asset to pass on. That is a sentence few jurisdictions allow us to write.