BELGIUM Law and Practice Contributed by: Alain Van Geel and Emilie Van Goidsenhoven, Tiberghien
These methods need to be analysed and adapted on a case-by-case basis to suit different family situations. 4.2 Succession Planning In Belgium, whether the family business is an inde - pendent activity carried out as a private individual or a company, both legal forms offer the possibility of exemption from gift tax or a 0% rate. Specific rules apply in this respect in the Flemish Region, the Wal - loon Region and the Brussels-Capital Region. It is also possible to obtain a reduced rate of inherit - ance tax (3% or 7% in the Flemish Region and the Brussels-Capital Region, and 0% in the Walloon Region), provided certain conditions are met. 4.3 Transfer of Partial Interest Where assets are transferred by donation or inher - itance, the parties are responsible for valuing them. The market value of the assets transferred must be determined. Certain adjustments and discounts may be applied, and it is in the event of an audit by the authorities that the correctness of the values adopted must be demonstrated. For this reason, it is advisable to document the valuation of the assets properly at the time of transfer – for example, by using the services of an expert or an auditor. A minority stake will be valued with a discount for lack of control and/or illiquidity. Disputes regarding estates are mostly driven by non- compliance with the forced heirship rules by (one of) the children or the surviving spouse. Mediation is possible and is being used more and more, with the help of a professional mediator, a notary or a lawyer. If mediation has not succeeded, the disputes take the form of court proceedings. The courts will initially appoint a notary in order to rule on the dispute. 5.2 Mechanism for Compensation In Belgium, there are legal protection mechanisms for specific family members heirs; forced heirs (see 2.3 Force Heirship Laws ) are able to claim their reserved portion of the deceased’s estate. The reserved por - tion is the minimum share of the inheritance that an 5. Wealth Disputes 5.1 Trends Driving Disputes
heir is obliged to receive regardless of the deceased’s will. The free available portion corresponds to the remaining part of the inheritance – ie, the share that the deceased can leave to whomever they wish by bequest. If the testator has not respected the forced heir - ship rules, a forced heir can (but has no obligation to) claim their reserved portion of the estate. What the deceased bequeathed will then be “reduced” to the amount of the reserved portion. This protection mechanism is known as “reduction”. There is a second mechanism for ensuring equality between heirs: the so called “rapport”, which is a mechanism that allows gifts made during the lifetime of the deceased to be taken into account in the estate, in order to re-establish equality between the heirs (in descending line only). 6. Roles and Responsibilities of Fiduciaries 6.1 Prevalence of Corporate Fiduciaries The use of corporate fiduciaries is not prevalent in Belgium. 6.2 Fiduciary Liabilities This is not applicable in Belgium. 6.3 Fiduciary Regulation This is not applicable in Belgium. 6.4 Fiduciary Investment This is not applicable in Belgium. 7. Citizenship and Residency 7.1 Requirements for Domicile, Residency and Citizenship “Residency” has a factual meaning under Belgian law. It is characterised by a certain permanence or continuity, independent from the (Belgian concept of) “domicile” or nationality of a person. It concerns the place where a person lives and works; it is the place where their family is housed, the place where a person
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