BELGIUM Law and Practice Contributed by: Alain Van Geel and Emilie Van Goidsenhoven, Tiberghien
2. Residency and Domicile for Purposes of Wealth and Estate Planning 2.1 Determining Domicile
localisation of his/her assets in Belgium is a rebuttable presumption for this test. Patrimonial interests as well as general economic interests are relevant for this test. The notion of “citizenship” has no tax consequences in Belgium (aside from under the last criterion of the tie-breaker rules of double tax treaties in relation to residency). 3. Intestacy and Forced Heirship Laws 3.1 Intestate Succession In the absence of a will, Belgian succession law applies a statutory order of succession based on family proximity. Descendants rank first and inherit in equal shares. In such case, the surviving spouse is entitled to the usufruct over the entire estate, while the descendants receive the bare ownership. The surviv- ing spouse is also entitled to the usufruct over assets that were donated by the deceased during his or her lifetime with a reservation of usufruct, provided that the spouses were already married at the time of the gift and that the deceased retained the usufruct until death. Where there are no descendants, but there are ascend- ants or collateral relatives up to the fourth degree, the surviving spouse inherits the deceased spouse’s share in the matrimonial community, and their share in any property held in indivision exclusively between the spouses, in full ownership. They also benefit from the usufruct over the remainder of the estate. If there are no descendants, ascendants or collateral relatives up to the fourth degree, the surviving spouse inherits the entire estate in full ownership. Ascendants and collateral relatives (up to the fourth degree) inherit only in the absence of descendants, and their rights are subordinate to those of the surviving spouse. Where a will exists, freedom of testation is neverthe- less limited by the reserved portion (see 3.2 Forced Heirship ). Any testamentary dispositions or lifetime transfers that infringe upon the reserved portion are subject to reduction at the request of the protected heirs.
“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 – ie, the place where his/her family is housed, and where he or she stays permanently, maintains his/her relationships, etc. Residency in Belgium triggers inheritance tax on worldwide assets. By contrast, for estate taxation pur- poses, the overriding factor is the location of immov- able property in Belgium. As an exception, gifts of movable assets are taxable in Belgium by way of the donor’s residence. For civil law purposes (right to make a will, submission to Belgian jurisdiction for claims), the notion of resi- dence is similar. In an international context, most mat- ters are harmonised by European regulations, which refer to the concept of habitual residence. Habitual residence is characterised by a certain degree of per- manence or continuity and corresponds to the place Belgian residents are taxed on their worldwide income. As stated in the foregoing, tax residency is a factual notion. However, for income tax purposes, two presumptions apply to determine one’s residency in Belgium. First, there is a rebuttable presumption that a person registered in the Belgian national register is deemed a Belgian resident for personal income tax purposes. The second presumption is irrefutable and qualifies a person as resident if his/her family is living in Belgium. where a person lives and works. 2.2 Income Tax Residency The “seat of fortune” is also relevant for personal income purposes, and only applies in the absence of a Belgian residence. The “seat of fortune” is located in Belgium, at the place where a private individual is managing or controlling his/her assets from Belgium – even if the assets are not located in Belgium. The
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