You are getting older for a day and you want, for example, to benefit your children financially.
A bank donation is by far the most simple and tax-efficient way to do this, but it is not without its pitfalls.
Below you will find an overview of some points for attention.
- Neutral character of an indirect donation
First of all, you should know that a donation in principle requires a notarial deed to be valid (cf. art. 931 old Dutch Civil Code).
One of the exceptions that is not bound by this legal formal requirement is an indirect donation, such as a bank gift in which the donor transfers a sum of money to the bank account of the donee.
There can only be an indirect donation if the donation is made through a neutral legal act. This means that it must not be apparent from the legal act whether the transfer of ownership takes place out of generosity or for consideration. In principle, a transfer fulfills this condition: it can be made out of generosity, but also to settle a debt or by way of loan.
Many feel it is necessary to clarify that the transfer is a donation and add the statement 'gift' or 'donation' to the transfer. In this way, however, they remove the neutral character of the transfer, so that a valid indirect donation suddenly becomes an invalid direct donation due to violation of the legal formal requirement (notarial deed).
- Pacte adjoint
Every donation always requires 1) the handing over of the thing to the donee 2) the intention of the giver to donate (animus donandi) and 3) the acceptance of the donation by the donee. Once one of the three conditions is not met, there will be no valid donation and will be subject to destruction.
In order to limit the difficulties of proof with regard to 'the intention to donate', it is recommended that the donor and the donee have a supporting document or a so-called 'pact adjoint' draw up.
The reason that the pacte adjoint can only be drawn up after the donation lies again in the preservation of the neutral character of the transfer. The pacte adjoint merely serves as proof of a previously made donation and does not include the donation in itself.
This chronology must also be taken into account when drawing up the pacte adjoint. For example, the pacte adjoint will always be drawn up in the past tense.
- Risk period
There is no registration for a bank donationobligation. In case of registration, 3% or 7% gift tax will automatically be due, depending on the degree of relationship between the donor and the donee. If the donation is not presented for registration, a risk period of 3 years starts (this period is determined by the tax residence of the donor and applies to the Flemish and Brussels-Capital Regions, in the Walloon Region applies from 1 January 2022 a risk term of 5 years for gifts since the aforementioned date), within which the gift could be subject to inheritance tax (instead of the lower gift tax).
If the donor dies within the risk periodie within 3 years after the donation, the Flemish Tax Authorities (Vlabel) will consider the unregistered donation (on which no gift tax was therefore paid) as a bequest and inheritance tax will be due on it.
In order to prove to Vlabel in that case that the donation took place more than 3 years before the death, a fixed date is necessary. Unlike a notarial deed, a private deed (such as the pacte adjoint) does not have this.
However, Vlabel recognizes that a semi-fixed date is sufficient. On the basis of the account statements, the donee can prove that the donation was made outside the risk period.
If the health of the donor suddenly deteriorates sharply, it can be decided until shortly before the death to register the gift at the legal certainty office and to pay gift tax in order to avoid the higher rates of inheritance tax from being applicable. Both the donor and the donee can have the donation registered, but the gift tax will always be owed by the donee.
Feel free to contact us for more information about the conditions and modalities that can be linked to the bank donation or for legal assistance with the editors and (possible) registration of the pacte adjoint.
