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Introduction to Turkish Heritage Law


INTRODUCTION TO TURKISH HERITAGE LAW[1]

 

     The aim of this paper is to introduce brief information regarding fundamental principles of Turkish heritage law and official procedures regarding to heritage proceedings. It is a fact that, foreign party involved heritage cases and distribution of the heritage requests are increased dramatically in Turkey; due to the increasing amount of international marriages, investments as well as immigrations and real estate accessions by foreigners in Turkey. Taking into account growing numbers of demands of legal assistance from our law firm, we prepared this paper to enlighten our clients as well as public to explain different aspect of the Turkish heritage law.

 

     We hereby inform that the disputes in the succession processes might have complex nature and some of them need to be proceed with special procedures  which are out of the scope of this paper. In such cases, taking legal assistance is recommended.

 

I. SOURCES AND EXTENT OF TURKISH HERITAGE LAW

     In the scope of this article, firstly the sources and legal regulations of the Turkish heritage law will be determined and accordingly the heritage distribution procedures would be explained in general terms.

 

     a.     Sources

 

     Rules regarding to Turkish heritage law has been codified in Turkish Civil Code  (hereinafter TCC) (dated 22/11/2001 and numbered 4721). Yet in order to interpret the regulations of TCC, it is often needed to refer to the general principles of law, Turkish Code of Obligations (dated 11 January 2011 and numbered 6098) and relevant tax regulations.

 

     In addition to these regulations regarding to heritage law, in cases involving international parties or multinational individuals, the regulations in the International Private and Procedure Law (dated 27 November 2007 and numbered 5718) should also be taken into consideration.

 

     In addition to these national sources, in order to prevent disputes in heritage proceedings involving an international tool; countries have made bilateral and multilateral agreements regarding to the law to be applied in such cases which should be taken into account accordingly with the special circumstances of the dispute.

 

     b.     In which cases Turkish Heritage Law would be implanted:

 

     As noted above, this paper subjects the regulations and proceedings regarding to Turkish heritage law. Therefore it has the utmost importance to firstly reveal the extent of the Turkish heritage law. In other words, it is needed to enlighten in which cases the below-presented rules will be applied, especially in the proceedings of international parties or successors.

 

     According to Article 20 of the International Private and Procedure Law, as a general rule, the national law of the deceased shall govern inheritance.[2] In this sense, while the inheritance proceedings of foreigners passing away in Turkey will be governed by the national law of the legator, Turkish rules will be applied for Turkish citizens’ who passes away abroad.

 

     Yet in addition to this general rule; there are important exceptions which have serious implications for the inheritance proceedings. First of these exceptions is about the immovable property located in Turkey. According to the article 20 of the International Private and Procedure Law irrespective of the citizenship of the owner/legator for the immovable property located in the Turkey Turkish law shall be applied.[3]

 

     Moreover it is foreseen in the same article that provisions relating to the reasons of opening, acquisition and distribution of succession shall be governed by the law of the country where the estate is located.[4]

 

     Therefore, it is possible to conclude that although the citizenship of the deceased person is the key determinant; especially for the estate located in Turkey (whether left by a citizen or a foreigner); Turkish law will have a large scope of application.

 

II.  DEFINITIONS

 

     Before presenting a detailed account of Turkish heritage law, it would be proper to provide definitions of some fundamental concepts. According to Turkish Law; the “legator” is defined as the deceased person who left the heritage to his/her inheritors. As the subject of Turkish Heritage Law’s subject, inheritors are those who have a claim on the heritage of the legator. Turkish Civil Code defines four types of legal inheritors which are;

 

  • Blood relatives are first group of legal inheritors which consist from persons who are related with the legator by birth[5].
  • Surviving spouse is also entitled to claim rights from the inheritance with the below-presented rates.[6]
  • Adopted child/children of the legator are also entitled to inheritance in the same conditions with the descendants.[7]
  • The country treasury is the inheritor of those who passed away without any inheritor.[8]

     In addition to that the term “estate” can be defined as all assets, rights and obligations left from the deceased person as soon as they are legally available for inheritance.

 

III. SHARES OF INHERITANCE

 

     Above presented inheritors are grouped in three degrees: First degree consisting of the descendants, second degree consisting of the deceased person’s parents and their offspring, third degree consisting of the deceased person’s grandparents and their offspring. And herein it should be stated that surviving spouse is not included in the system of degrees and shall have a share irrespective of other inheritors’ degrees. The respective shares of inheritors are presented below.[9]

 

     a.     If the deceased has descendant(s) (first degree); inheritors other than surviving spouse cannot have share from the estate. And descendants of the deceased inherit the estate in equal shares. Different shares of the descendants in different scenarios are presented below:

Table-1 - The share of the descendants[10]

 

 

Definition of Descent The share of the descendants

The son or daughter with the alive surviving spouse

of deceased person

3/4

The son or daughter as sole successor without alive

surviving spouse of deceased person

1

 

 

     b.     Surviving spouses’ share from the heritage depends accordingly with whom he/she is inheritor with. In other words, his/her share will vary in different situations. These varying rates are presented below:

 

Table-2 - The share of the surviving spouse[11]

 

 

Other inheritors The share of the surviving spouse

With the child/children of the deceased

1/4

With the parents (or their offspring) of the deceased

2/4

With grandparents (or their children) of the deceased 3/4
As sole successor without any children or parents 1

 

     c.     Parents’ shall not inherit the estate in case the descendants of the deceased are alive. In other cases they can equally inherit the estate with the below presented shares:

 

Table-3 - The share of the parents[12]

 

 

Other inheritors

The share of the surviving parents

of the dead person

With the alive children of the dead person

-

With the surviving spouse

2/4

As sole successor(if the dead person

has no wife or children)

1

 

IV. PROCEDURES

 

     Claiming the share from the heritage and acquisition of the estate requires several formal proceedings involving different authorities and courts. Therefore legal assistance during these proceedings is highly recommended.

 

     a.     Death certificate

 

     The first transaction to do before proceeding with the inheritance procedures is to report the loss of the deceased to the police/doctor and obtain a “death certificate”[13] This certificate will prove before local official authorities that the deceased person has passed away and legally dead.

 

     b.     Judgement of Inheritance

 

     The first transaction to be made in the context of secession proceedings is obtaining “judgement of inheritance” which shows that you are one of the listed inheritors of the deceased person.

 

     According to the TCC; judgement of inheritance can be obtained from Public Notaries (in the case of foreign parties Notary’s are not allowed to issue such an official documentation) and Civil Courts of Peace.[14] Whenever a foreign part is involved to a heritage case the Court of Peace has authorization to issue a judgement of inheritance in line with TCC.

 

     While obtaining the judgement of inheritance; the Court may request relevant registry and other supporting documents to determine the legator-inheritor relationship between the applicant and deceased person.

 

     c.     Turkish Heritage Taxes

 

     After above-presented transactions; inheritors are obliged to submit a declaration to the tax office/consulate showing the amount of the estates and money and/or any valued property such as car or personal assets. In this context, all assets and liabilities of the estate should be indicated in the declaration along with the official documents proving their assessment value.[15]

 

     The declaration should be signed either by the inheritor or his/her lawyer or legal representative and shall be submitted to the consulates of Turkey or tax offices[16] in the below specified terms. Herein it should be stated that violation of these terms may result in administrative fines. [17]

 

Table-4 Terms for Submitting Declaration of Tax[18]

 

 

Place of death

Taxpayers Location on the day

of

death

Time for

Submitting

Declaration

Turkey

Turkey

Within 4 months

following the date of death

Foreign Country

Within 6 months

following the date of death

Foreign Country

Turkey

Within 6 months

following the date of death

Foreign country where death occurred

Within 4 months

following the date of death

A foreign country other than

the foreign country where the death

occurred

Within 8 months

following the date of death

    

      c.     Acquiring the real estate

 

     After submitting the declaration and paying the taxes; for acquiring the estate, inheritors shall complete some procedures accordingly with the type of asset to be inherited. These procedures may be completed by the inheritors themselves and or by their representatives. Most common types of assets and relevant procedures are presented below.

 

               (1)     Immovable Assets-Real Estates

 

     In case the real estate contains immovable assets such as house, apartment, land etc. following to above-presented procedures, the transaction shall be completed in the “Deed Registry Offices” where all documents are officially collected as an administrative office. In this context, documents regarding to inheritance should be submitted to the Deed Registry Office and the immovable asset should be registered in the name of inheritors.

 

               (2)     Motor Vehicles

 

     As the immovable assets, motor vehicles are also subjected to a special registry in Turkey. Therefore for acquiring the motor vehicles; an application should be made to the Traffic Registration and Supervision Bureau and the vehicle should be registered in the name of the inheritors.

 

               (3)     Bank Account

 

     Whenever there is a bank account or financial loan as subject of the heritage, withdrawing the money from the deceased persons’ bank accounts is needed. In order to complete these procedures, an application with the judgement of inheritance and tax dismissal document should be submitted to the related bank. Following to the submission of all documents and approval of the bank authority the transactions from the deceased persons’ bank account will be possible.

 

V.     TAXES

 

      Similar with the most of the countries, in Turkey, proceedings regarding to the inheritance is subjected to tax. It is not legally possible to acquire the “real estate” or other assets before paying the “Inheritance and Gift Tax” which is regulated in the Inheritance and Gift Tax Law (dated 8.06.1959 and numbered 7338).

 

     The scope of the inheritance tax stipulated under the article 1 of the Law of Inheritance and Gift Tax Law that describes the taxpayers as those who acquires property gratuitously or by heritage[19]. Yet in the following articles, it is foreseen that some cases involving an international party are exempt from the tax. The scope of the tax is summed in the below-presented table.

 

Table 5 - Scope and Exemptions Regarding to the Inheritance and Gift Law[20]

 

 

Location of the

Property

Citizenship of the

inheritor

Residence of the

inheritor

Scope

In Turkey

Out of Turkey

Turkish Foreigner In Turkey Out of Turkey  
x

 

x   x

SUBJECTED

TO

TAX

x

 

  x x
  x x   x
  x   x x  
  x   x   x EXEMPT

 

     Tariff regarding to the Inheritance and Gift Tax is regulated in the article 16 of the Law and it is re-evaluated each year by the Ministry of Finance, accordingly with the inflation rate. The below-specified shall rates will be applied to the amount specified in the declaration. The tax base and the rates for 2018 are presented below in the Table-2. However the parties needs to take into consideration that the Tax regulations has been changing and evaluating by tax administration very frequently and for each distribution of the inheritance case the parties needs to investigate real tax rates separately. Especially whenever a foreign party involves to the heritage distribution process there are additional taxes might be implemented.

 

Table 6 - Tariff of Inheritance and Gift Tax (2018)[21]

 

 

Tax Basis

Rate of the tax (%)

For the first  240.000 TL

1

For the preceding  570.000 TL

3

For the preceding  1.270.000

5

For the preceding  2.200.000  7
For the amounts exceeding 4.280.000  10

 

 

VI. DISPUTES AND DISPUTE RESOLUTION

 

     The process of inheritance is a complex one and it is not rare to see that beneficiary parties of the inheritance (inheritors, banks, state and creditors/debtors) can face with several types of disputes or conflicts with each other. Therefore in some cases, these conflicts are settled through mediation or lawsuits. The law allows to the parties of the heritage to sign an agreement and receive authorization from the court related to their agreements as well.

 

     In practice, the possible disputes may stem from a wide range of causes including but not limited with claims are as followswill/testamentary dispositions, shares of inheritance, testamentary contracts, certificate of inheritance, opening the succession, the net amount of the succession, annulment of the transactions prior to death. 

 

     Concordantly with this wide range, procedures and resolution of the disputes vary accordingly with the type of the case and evaluation of these procedures exceeds the limits of this article.

 

[1] While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.

[2] The International Private and Procedure Law (2007) article 20.

[3] ibid

[4] ibid

[5] Turkish Civil Code (2001)articles 495-498.

[6] ibid article 499.

[7] ibid article 500.

[8] ibid article 501.

[9] ibid articles 495-499.

[10] İbid.

[11] ibid article 499.

[12] ibid articles 495-499.

[13] By-Law on the Construction of Cemeteries and Funerals (2010) art 16

[14] Turkish Civil Code (2001) article 598.

[15] Inheritance and Gift Tax Law (1959) article 7.

[16] ibid article 8.

[17] Tax Procedure Law (1961) article 331.

[18] Inheritance and Gift Tax Law (1959)

[19] ibid article 1.

[20] ibid articles 2-4.

[21] General Communique Regarding to Inheritance and Tax Law (2017) article 4.