BELGIUM Law and Practice Contributed by: Alain Van Geel and Emilie Van Goidsenhoven, Tiberghien
sional associations, (international) non-profit organisations and private foundations; (iv) a reduction for a legatee who is the child of the deceased and younger than 21; (v) a reduction for “friends” (“inheritance between friends”); and (vi) a 50% reduction in the event of another transfer due to another death within one year following the first death. • Walloon region: (a) exemption for the first EUR12,500 – applica- ble to the inheritance of an heir who is a direct descendant (increased for surviving children who have not reached the age of 21 years) and is legally entitled to inherit, and to a spouse or statutory cohabitant; (b) partners inheriting the family home benefit from an inheritance tax exemption; (c) for family businesses, an exemption may be claimed (subject to conditions); (d) other rebates and reductions, including (i) a rate of 0% (exemption) for bequests made to, amongst others, the regions, the communities, the federal state, a member state of the EEA or one of its institutions and any entity created by any such institutions; (ii) a rate of 5.5% for bequests to, amongst others, the provinces, municipalities, publicly owned entities of the provinces and municipalities, inter-municipal organisations and autonomous municipal un- dertakings located in Belgium, and to analo- gous entities created in accordance with and subject to the legislation of another member state of the EEA; (iii) a rate of 7% for bequests made to (international) non-profit organisations, mutual undertakings or national associations of mutual undertakings, and private foundations and foundations of public interest; (iv) a reduc- tion for a legatee who is the child of the de- ceased and younger than 21 (subject to certain conditions); (v) a 50% reduction in the event of another transfer due to a further death within one year of the original death; (vi) exemption for immovable property located within a Natura 2000 site or a site for which an application for Natura 2000 status has been filed, and which is subject to the primary protection regime; (vii) exemption for the value of standing trees growing in woodland and forests, and for the
value of shares in forestry companies; and (viii) exemption for unbuilt immovable proper- ties located in the Walloon region on which a long-term agricultural lease or a quarry lease is established, under certain conditions; and (e) restitution of the inheritance tax levied on immovable property located in the Walloon region and totally or partially intended for housing, amounting to 25% of the expenses incurred in order to save energy in relation to that property, up to a maximum amount of EUR2,500 – provided that the heir establishes his or her main residence in the immovable property within the year following the filing of the inheritance tax return and maintains that residence for three consecutive years, and pro- vided that energy-saving works are carried out within three years of that same date. 6. Lifetime Succession Planning Mechanisms 6.1 Common Planning Techniques Belgian law allows for many different planning tech- niques and opportunities. Mechanisms often used in practice include: • reduced rates relating to registered gifts; • possibilities under civil law (usufruct, indirect gifts, etc); and • vehicles such as the private foundation or the so- called société simple . Usufruct and Bare Ownership Ownership split (usufruct/bare ownership) is fairly widespread in Belgium and makes it possible to trans- fer assets to young children while retaining control. Usufruct is a legal right that allows someone to use and enjoy the benefits (such as income or resources) of a property that belongs to another person, without owning it. The person with the usufruct, called the usufructuary, can live in the property, rent it out or use it in other ways, but they cannot sell or damage it. Bare property, on the other hand, refers to the owner- ship of a property without the right to use or enjoy its benefits. The bare owner holds the title to the property
24 CHAMBERS.COM
Powered by FlippingBook