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Last Updated: Sep 07, 2007

Inheritance tax and law

Inheritance taxes are levied at progressive rates depending on the relationship between the deceased and the heir.

  • Category I: (first degree heirs) parents, spouse, children, grandchildren
  • Category II: (second degree heirs) grandparents, siblings, nieces, nephews
  • Category II (third degree heirs) uncles, aunts, children of uncles and aunts

The taxable inheritance is the gross estate. The whole estate of an Iranian is subject to inheritance tax, regardless of location. Non-Iranians are subject to inheritance tax only on property located in Iran.

A deduction allowance of IRR30 million (US$3,131) is extended to each first degree heir. First degree heirs who are below 20 years of age or are incapacitated are entitled to the maximum deduction allowance of IRR50 million (US$5,218).

The inheritance tax rates are as follows:

TAX RATES ON DIFFERENT CATEGORIES

TAX BASE, IRR (US$) I II III
Up to 50 million (US$5,218) 5% 15% 35%
50 million – 200 million (US$20,871) 15% 25% 45%
200 million – 500 million (US$52,178) 25% 35% 55%
Over 500 million (US$52,178+) 35% 45% 65%
Source: Global Property Guide

 

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