If one is married under the Belgian system of separation of property with a community of assets (the so-called 'statutory system'), there are three assets: the equity of each of the spouses and the common property.
Equity includes property that the spouses already owned before the marriage and that one of the spouses acquires free of charge during the marriage (by virtue of an inheritance or gift) (Article 1399 of the Civil Code). However, the fruits of these own goods (for example, interest, dividends, rental income) are shared (Article 1405, §1, 3 of the Dutch Civil Code), unless deviated from in the deed of gift or will.
This specific arrangement for the fruits of one's own property is an important point of attention: both during life and in death, due to the communal nature of the fruits, the initial property of one's own may also have become common. If the fruits of one's property were not split off, then the equity capital may have been 'mixed' with the common property, so that one might suspect that everything in total has become common. In this way, there is a presumption of community of property, unless the contrary is proved (Article 1405, §2 of the Civil Code)
In certain cases, this can have undesirable consequences, for example in the event of a divorce (since you will initially have to share your own property with your ex-partner) or in the event of death (since you will owe inheritance tax on the value of the usufruct that you acquire on half of these assets).
The Court of Cassation has ruled on this, and more specifically on the situation of the mixing of bank funds, in the context of drawing up compensation accounts between spouses. By judgment of 4 September 2020, the Court concluded that “the mere fact that during the marriage own funds have been deposited in a bank account, either in the name of both spouses or in the name of one of the spouses, to which the presumption of community of property applies, is not sufficient to speak of mixing”.
It follows from this judgment that the fact that own funds and communal funds end up in one account does not simply lead to the so-called 'mixing'. In practice, however, there is still a great deal of uncertainty about this, so that people often opt to take certain steps (such as, for example, a release from the marriage community) in order to still maintain the individual character of certain goods.
Any mixing can also have undesirable tax and inheritance consequences.
For example, in the event of the death of one of the spouses, the tax authorities will judge that all this has been mixed and must therefore be included in the declaration of the estate of the deceased spouse (taking into account position no. 15034 of 21.06.2017 of the Flemish tax authorities). If proof to the contrary cannot be provided by the surviving spouse (in particular that it concerns own funds, which are not mixed and can still be individualized, without ever having any intention of making them common), inheritance tax will be due on half of the (communal) capital involved.
In most cases, the joint accounts are not always divided and these remain in the name of the surviving spouse. This with the intention of perpetuating his standard of living, whereby the children (heirs) do not yet effectively receive the bare property (due to them under the law of inheritance). As a result, there is a risk that, at the time of the death of the surviving spouse, these liquidities will be taxed again and therefore in their entirety for a second time in the inheritance tax (to the detriment of the children, heirs).
Fortunately, the Flemish Tax Authorities have remedied this situation (although this also required a judgment of the Court of Appeal in Ghent dated 30.03.2021 and the entry into force of the new property law) through its position no. 21039 dated 07.06.2021. In the context of the declaration of the estate of the surviving spouse, it can be demonstrated that the assets in the joint accounts were not divided after the death of the first spouse, so that such a situation no longer has to give rise to double taxation. This proof (mainly on the basis of account statements) must be submitted together with the declaration of the estate.
If it appears that the assets have not been divided and can still be individualized at the second death, then half of those accounts will not be taxed again. The heirs thus have a 'commercial claim for restitution' (half of the bank balances that were there at the death of the first spouse may be deducted under the heading 'assets of the declaration of inheritance').
If the assets have not been divided but can no longer be individualized/traceable upon the second death, a distinction is made for deaths since 1 September 2021 between the situation that there is still sufficient liquidity available or not. If sufficient liquid assets are available and can therefore be traced, the heirs also have a 'commercial claim for recovery' of an equal amount, which may therefore be deducted from the assets of the estate (in accordance with Article 3.12 of the Dutch Civil Code). If sufficient liquidities are no longer available and in other words they are no longer traceable, the heirs have a personal claim against the estate that will be included under the liabilities of the estate.
Certain actions that you take (or just don't do) can therefore have a significant impact on both your civil and tax situation, or that of your heirs. For more information about your matrimonial property regime and its consequences, you can always contact us (stefan.deplus@vsadvocaten.be).
