Iran Inheritance and Gift Tax Guide 2026

Overview — Inheritance and Gift Taxation in Iran

Iran's inheritance tax (مالیات بر ارث) was significantly revised in 2015 as part of broader tax reforms. The system categorises heirs into three groups based on their relationship to the deceased, with each category subject to different tax rates. The tax is levied on the value of inherited assets above an exemption threshold, with different rates applied to different categories of assets (movable vs. immovable). The gift tax (مالیات بر هبه) follows a similar relationship-based structure. Both taxes are governed by the Direct Tax Law (قانون مالیات‌های مستقیم) and are administered by the INTA.

Inheritance Tax — Categories and Rates

The inheritance tax rate depends on the heir's relationship to the deceased, categorised into three groups:

Category 1 — Direct Heirs (Spouse, Parents, Children, Grandchildren)

The most favourable rates apply to the closest relatives:

• Rate: 0% to 15% depending on the asset type and value
• Housing: The primary residence of the deceased is generally exempt from inheritance tax for Category 1 heirs (0% rate), provided the heirs are the spouse or children
• Movable assets (cash, securities, vehicles): Lower rate typically 0–5%
• Other immovable property (investment property, land): Higher rate within the category, up to 15%

Category 2 — Siblings, Grandparents, and Their Descendants

Intermediate rates apply to more distant relatives:

• Rate: 10% to 25% depending on the asset type
• Exemption: A basic exemption applies before tax is calculated
• No housing exemption: The primary residence exemption does not apply to Category 2 heirs

Category 3 — Other Heirs (Unrelated, Distant Relatives)

The highest rates apply to non-relatives and distant kin:

• Rate: 20% to 35% depending on the asset type
• Full taxation: No significant exemptions available

Inheritance Tax Exemptions

Key exemptions and allowances under the inheritance tax regime:

• Primary residence: Exempt for Category 1 heirs (spouse, parents, children) up to a specified value
• Personal effects: Clothing, household goods, and personal belongings of modest value are generally exempt
• Life insurance proceeds: Payments from life insurance policies to named beneficiaries are generally exempt from inheritance tax
• Basic exemption: A fixed amount designated to each heir (varying by category) is exempt before applying the tax rate
• Religious endowments (Waqf): Assets transferred to recognised religious or charitable endowments may be exempt

Gift Tax (مالیات بر هبه)

Gift tax in Iran applies to transfers of property made during the donor's lifetime without full consideration. The rates depend on the relationship between the donor and the recipient:

• Category 1 (spouse, parents, children): 0% to 5% — gifts between close family members are largely or fully exempt
• Category 2 (siblings, grandparents): 5% to 10%
• Category 3 (others, non-relatives): 10% to 15%

Key considerations for gift tax:

• The tax is payable by the recipient (donee)
• Gifts must be registered with the INTA to be valid for legal purposes (e.g., property transfer)
• Gifts of cash and movable assets below a certain threshold may be exempt from gift tax
• Gifts made for charitable purposes (to approved organisations) are generally exempt
• Gifts between spouses are fully exempt from gift tax

Procedural Requirements

Inheritance tax: Heirs must file an inheritance tax declaration (اظهارنامه مالیات بر ارث) with the INTA within six months of the deceased's death (or one year if the heir is outside Iran). The declaration must list all assets and liabilities of the deceased. The tax must be paid before the assets can be legally transferred to the heirs. A tax clearance certificate (گواهی پرداخت مالیات بر ارث) is required for property registration.

Gift tax: The recipient must file a gift tax declaration within 30 days of receiving the gift. For real estate gifts, the tax must be paid before the deed can be registered in the recipient's name. The gift tax return is filed electronically through the INTA portal.

Comparison: Inheritance Tax Before and After 2015 Reform

Prior to the 2015 reform, inheritance tax rates were higher and less differentiated. The 2015 reform (implemented under the Sixth Five-Year Development Plan) significantly reduced rates for direct heirs and simplified the category structure. Before 2015, rates for Category 1 heirs could reach up to 30%, compared to the current maximum of 15%. The reform also introduced the housing exemption and increased basic exemption thresholds.

Estate Planning Considerations

Given the progressive rate structure and relationship-based categories, estate planning in Iran often focuses on:

• Gifting during lifetime: Transferring assets to descendants during the donor's lifetime can reduce the inheritance tax burden, as gift tax rates may be lower than inheritance tax rates for certain categories
• Waqf (endowment): Placing assets in a religious or charitable endowment can provide tax benefits while preserving income for beneficiaries
• Life insurance: Using life insurance proceeds (exempt from inheritance tax) to provide liquidity for heirs
• Co-ownership structures: Holding property in joint names can reduce the taxable estate of each individual

FAQs

Is there a separate inheritance tax in Iran, or is it treated as income?

Iran has a separate inheritance tax (مالیات بر ارث) distinct from income tax. Heirs do not pay income tax on inherited assets. However, if heirs later sell inherited assets, capital gains are taxable as ordinary income at that point.

How is the value of inherited property determined?

The INTA uses official property appraisal values (قیمت منطقه‌ای) for immovable property and market values for movable assets (securities, vehicles). The official values are typically lower than market values, resulting in a lower effective tax rate.

What happens if inheritance tax is not paid?

Inheritance tax must be paid before assets can be legally transferred. Unpaid tax accrues penalties and interest. The INTA may also place liens on inherited assets and pursue enforcement action, including court proceedings.

Are gifts to charities taxable?

Gifts to approved charitable organisations (خیریه‌های مجاز) are generally exempt from gift tax. The donor may also qualify for an income tax deduction for charitable contributions.

Disclaimer

This guide provides general information about Iranian inheritance and gift tax for the 2026 tax year. Tax laws and rates may change. Always consult with a qualified Iranian tax advisor (مشاور مالیاتی) or the INTA directly for advice specific to your situation. InvestmentKit does not provide tax advice.