In recent months, a lot has appeared in the media about donating before a foreign notary, a privilege that the 'happy few' would have to transfer their wealth to the next generation tax-free. Now what is this right?
A gift for a foreign notary is a common practice that has been used for years to combine two important aspects: a notarial deed of gift and opting for a risk term in the inheritance tax, instead of immediately paying the gift tax.
A notarial deed of gift is mandatory for certain donations, for example for shares in a company or for the inclusion of certain modalities such as a reservation of usufruct, a residual donation or a suspensive condition.
If this deed is executed before a Belgian notary, this deed must be registered and a gift tax is automatically due. Paying the gift tax relieves the inheritance tax.
However, the law does not require a Belgian notarial deed for this. It is also possible to opt to donate the goods to a foreign notary, and there is currently no compulsory registration requirement in Belgium (with the exception of immovable property). In this way, one has the advantage of a notarial deed and avoids the immediate claimability of the gift tax in Belgium.
In order to prevent everyone from going to a foreign notary, the legislator has introduced a risk term for these donations: if the donor dies within three years after the donation (seven years for a family company) and the donation is not available before his death. registration, then inheritance tax is still due on the donated goods. So the donee takes a risk.
To put an end to this practice, a bill was submitted on June 17, 2020 that would introduce a registration requirement for foreign notaries from 1 December 2020. With regard to bank donations and hand donations, the current arrangement would be maintained.
Following advice from the Council of State on 14 September 2020, this bill may be split up.
In the meantime, the objective of this bill, in particular the compulsory registration of foreign notarial deeds by Belgian residents, has been confirmed in the Coalition Agreement of the so-called Vivaldi government.
Until December 1, 2020, a Belgian resident can make a donation to a foreign notary, without compulsory registration. Depending on the approval of the bill and the effective date of entry into force, this may be possible until a later date.
Do not hesitate to contact us if you have any questions.
“More than ever, it is appropriate to optimize one's own family situation in function of the changing tax system and legislation. Based on a digital 'photo' of your personal situation, we can perfectly show what goes to whom and who pays what in the event of a (sudden) death.
Based on this, specific options for optimization can be proposed and implemented. This way you are prepared and you have peace of mind about your personal situation.
We are happy to assist you in that.”
Stefan De Plus
stefan.deplus@vsadvocaten.be
+32 (0)9 269 10 67
