BELGIUM Law and Practice Contributed by: Alain Van Geel and Emilie Van Goidsenhoven, Tiberghien
businesses), the transfer of wealth is generally done while living, rather than upon death. For that reason, a wide range of structures are used in Belgium to transfer wealth transfer, in order to maintain a certain degree of control and to benefit from the transferred assets at the level of the donor. Gifts with the retaining of usufruct are used very often in Belgium. 2.2 International Planning The vast majority of families now have at least one member living abroad. New generations often estab - lish their residence in several countries before settling permanently. With Belgium being a very small country, in the centre of Europe, many Belgian residents trans - ferring wealth need to take foreign taxation regimes into account because of: • family members living abroad; • taxes applying in relation to a previous residency; or • assets held abroad. Belgium has only signed two double taxation agree - ments on inheritance tax: one with France and one with Sweden. In cases where no double tax treaty applies, Belgian inheritances tax provides for a tax credit system. However, such tax credits are not foreseen for gift taxes, in which case double taxation might occur. If the wealth planning involves the use of a trust, a for - eign foundation or low-taxed foreign companies, the impact of the so-called Cayman tax needs to be taken into consideration, which provides for some compli - ance obligations, look-through taxation and taxation Belgium has a well-defined legal framework for inher - itance, which includes a forced heirship system that ensures children and spouses receive a portion of the estate. Children are entitled (together and regard - less of their number) to (at least) 50% of the counter - value of the estate (leaving a portion of 50% which the deceased can dispose of freely). The spouse’s reserved portion is 50% of the estate in usufruct. This can complicate succession planning, especially if the family wishes to leave control of a business to a spe - on the occasion of distributions. 2.3 Forced Heirship Laws
cific heir or divide it in a way that does not align with the legal requirements. Of course, heirs are not forced to invoke the forced heirship rules, but they do have the right to do so. Based on the European regulation on succession, a Belgian resident who is a citizen of another country can opt for the inheritance rules of the country where they are a citizen. If gifts have been made that would trigger the forced heirship rules, an inheritance pact can be undersigned by the donor and their heirs in order to waive forced heirship rules in relation to that gift, providing some strict formalities are respected. 2.4 Marital Property In Belgium, future spouses can sign a marriage con - tract, which needs to be formalised in a notarial deed. There are three permitted and recognised matrimonial property regimes. • In the full community property regime, all assets acquired during the marriage are part of the com - munity of property. • The regime of separation of assets combined with a limited community of assets acquired during marriage is the default system under Belgian law, and applies if spouses do not choose another regime expressis verbis. This regime entails a sep - aration between the joint assets and the personal assets of each spouse. The joint assets include earned income, which is essential to this regime. Assets that were acquired prior to the marriage or donations/bequests made in favour of one spouse are personal assets of the spouse. • Under the regime of separation of property, each spouse remains entitled to their own personal assets (including earned income). There are no joint assets; at most, there are undivided assets held by each spouse for an equal part. Correction mechanisms are possible under the separation of property regime. Within the legal regime, one spouse cannot unilater - ally dispose of or alienate common assets; such deci - sions must be made jointly by both spouses. However,
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