Is it necessary to have a Turkish Will?
The purpose of a will is to communicate your wishes as to what will happen to your personal possessions after you die. It is a written legal document setting out the people you would like to inherit specified parts of your estate.
It is recommended that most people make a will so that they may specify who they want to inherit their estate and to avoid the complicated intestacy procedures necessary where there is no will.
The laws in relation to wills and inheritance in Turkey are very different to those in the jurisdiction of England and Wales. If you have assets in both Turkey and England, these differences will need to be carefully considered when you are preparing a will whether in England or in Turkey.
It is highly recommended for people owning assets in Turkey to make a separate Turkish will dealing with your Turkish assets. You should always consult a specialist lawyer to advise you as to what is best for you in your individual circumstances.
If both Turkish and English wills are prepared each will can independently deal with assets in their respective country avoiding delays and complications. This can make it significantly easier for your loved ones to deal with the administration of your estate on your death and could reduce both the costs and the associated hassle.
You will however need to ensure that the wills do not conflict or revoke one another and that they work together to achieve the intended result. You should therefore ensure that any lawyer you instruct to prepare a will whether in Turkey or in the UK are aware of the contents of any other will that you have.
Who will inherit my Turkish Assets?
Under English law anyone making a will has “testamentary freedom” which means that you can choose whoever you want to inherit your estate and in whatever proportions as long as this is set out in a valid will.
Turkey has a system of forced heirship, which means that under Turkish law certain portions of a person’s estate must be left to particular relatives and this can not be overridden by their will.
Turkish law does however provide that your national law can apply to your estate rather than Turkish law. Therefore an English national would have testamentary freedom to leave their estate to whoever they choose in their will in accordance with English law, avoiding the forced heirship provisions. There may however be other factors to be taken into account, for example if you are married to a Turkish citizen and resident in Turkey, Turkish inheritance law may still apply to you.
Will there be inheritance tax to pay?
This will depend on a number of factors and your personal circumstances.
As a general rule, if you are “domiciled” in the UK at the date of your death your estate will be liable to UK inheritance tax (IHT).
IHT is charged in the UK at 40%, however, everyone is entitled to a tax free amount (also known as the “nil rate band”) which is currently £325,000 (or up to £650,000 for married couples and registered civil partners if the “transferrable nil rate band” applies). This means that the combined value of your worldwide estate is calculated and only the amount that is over the tax free amount will be taxed at 40%. The tax is paid from the assets in the estate before they are distributed to the beneficiaries.
The question of whether or not a person is domiciled in a particular country for inheritance tax purposes is an extremely complex one. You should always obtain expert legal advice to ensure you understand how this will be dealt with on your death so that you can obtain the intended results for your beneficiaries.
Your “worldwide estate” includes the value of your English and Turkish assets and any assets that you may have in any other country. It may also include any gifts made before death in the last 7 years.
There may be some exemptions or reliefs available in respect of the amount of IHT payable depending on who your beneficiaries are and the nature of your assets. Your lawyer will be able to advise you as to whether this is relevant in your circumstances.
If you are not domiciled in the UK, UK inheritance tax will only apply to your assets that are located in the UK.
In Turkey inheritance and gift tax is payable by the beneficiary and not by the estate as in the UK. Inheritance and gift tax is payable on the assets located in Turkey only unless the deceased was a Turkish citizen and the beneficiary is resident in Turkey. In this case Turkish inheritance and gift tax would be payable on the worldwide assets.
The amount of tax paid depends on the value of the asset passing. It may be that both UK IHT and Turkish succession tax are payable in one estate.
Succession tax planning is extremely important if you want to ensure your beneficiaries get to keep as much of their inheritance as possible. Professional advice and careful planning can often make a significant difference to the amount of tax payable.You should always ensure that you get proper specialist advice in relation to your individual circumstances. Your lawyer can discuss inheritance tax planning with you as part of the preparation of your will.