Resident individuals are subject to Belgian personal income tax (PIT) on their worldwide income, while non-residents are generally only subject to (non-resident) PIT on their Belgian-sourced income. In both cases, Belgian taxation is subject to the provisions of the applicable double tax treaties.

Tax Residence

Individuals are considered Belgian residents for PIT purposes if their “domicile” or “seat of wealth” is established in Belgium.

“Domicile” refers to the place where one is mainly and permanently established. Factual circumstances will determine where individuals have the centre of their personal, economic and professional interests. No black and white test, such as day-counting, is available. Listing in the National Register of Individuals creates a (rebuttable) legal presumption regarding residency, and a married person is irrefutably presumed to reside with their family. “Seat of wealth” refers to the place from which individuals administer their wealth, regardless of its location.

Taxation

An individual’s taxable income is determined by four categories, each of which has specific rules for the calculation of the net income:

• real estate income;
• investment income;
• professional income; and
• other income.

The net amount of real estate and professional income is generally taxed at progressive rates, ranging from 25% up to 50%. Tax-free thresholds apply, and several deductions and exemptions may also apply (eg, for the deemed rental income of the family home, child support payments and charitable gifts). The tax amount is increased with a municipal tax (ranging from 0% to 9%).

With regard to real estate income, it is important to note that the taxable base is generally much lower than the actual rental value, unless the property is rented out for professional use. Moreover, capital gains on Belgian immovable property are not taxable as real estate income but can, in some cases, be taxable as other income at flat rates (eg, if the property is sold within five years of the acquisition) or as professional income at progressive tax rates. A similar regime applies for non-residents that derive income from real estate located in Belgium. Additionally, if the real estate income of a non-resident is lower than EUR2,500 and is the only Belgian-source income of the non-resident, no income tax will be levied and the non-resident will not need to file a non-resident income tax return.

Investment income (dividends including liquidation proceeds, interests and royalties) is generally subject to a flat tax rate of 30% (unless progressive taxation would be more beneficial) and is withheld at source by the Belgian paying agent, in which case the income must not be reported in the annual PIT return. If no withholding tax is levied (eg, foreign paying agent), the income must be declared in the annual PIT return, and a tax equal to the withholding tax will be levied. Investment income can also be qualified as professional income and will then be subject to the progressive tax rates. The qualification will depend on the factual circumstances (eg, the frequency of the transactions).

Several exceptions to the 30% tax rate may apply.

For example, dividends from qualifying small- or medium-sized companies can benefit under certain conditions from a reduced tax rate of 20% or even 15%. Upon payment of a 10% tax, small- or medium-sized companies can also annually allocate their profits to a so-called “liquidation reserve”, which can be distributed tax-free upon liquidation or with an additional 5% tax as a dividend if certain conditions are met (such as a waiting period of five years).

For certain investment insurance products, a tax-exempt yield can be realised in both type 21 (capital and yield guaranteed) and type 23 products (no guarantee as to capital or yield). Individual life insurance contracts taken out with non-Belgian insurance companies must be notified in the PIT return. A premium tax of 2% is due.

Unless taxable as other income or professional income, capital gains realised on movable assets do not generally constitute taxable investment income. The qualification as other income or professional income will depend on the factual circumstances. If the capital gain is realised by a normal management of assets, the income should be tax-free. However, capital gains on shares or units of capitalising collective investment funds may be taxed as interest at 30% if more than 10% of the assets are invested in debt securities. The same regime applies to share redemptions or liquidations by such investment companies.

Other income is taxed separately at flat tax rates. The most important types of other income are:

• capital gains realised on the transfer of a substantial shareholding in a Belgian company (more than 25%) to a non-EEA legal entity (16.5%);
• capital gains on the sale of Belgian real estate (other than the family dwelling) within eight or five years of acquisition (16.5% or 33%); and
• occasional and speculative (non-professional) profits and proceeds, including capital gains on shares realised as a result of an abnormal management of private wealth (33%).

Cayman Tax

In 2013, Belgium introduced reporting rules with respect to so-called “legal arrangements”, including – but not limited to – trusts and private foundations.

In 2015, these reporting rules were complemented with specific tax rules aimed at taxing Belgian residents involved in such legal arrangements (as “founders” or “third-party beneficiaries”), sometimes even on income they do not actually receive. This tax is commonly referred to as the Cayman tax.

Trusts and low-taxed foreign legal entities (including foundations and – according to the tax authorities – family-owned investment companies) are considered legal arrangements. Oft-cited examples include the Luxembourg Société de Gestion de Patrimoine Familial (SPF) and the Liechtenstein Stiftung or Anstalt.

Under the Cayman tax, the income of legal arrangements is attributed to the Belgian resident who qualifies as their “founder” (the look-through approach). The founder concept is a broad concept defined by law. The qualification of founder can pass on to heirs.

Under the look-through approach, the income of legal arrangements is taxed in the hands of their founder as if they had directly received the income (unless this income was distributed to someone else before the end of the relevant year).

The Cayman tax rules are complex (eg, for multi-layer structures) and draconian. To complicate matters further, these rules are prone to constant changes, often with a retroactive effect. The scope of the Cayman tax was significantly broadened at the end of 2018, with a retroactive entry into force as from 1 January 2018.

As part of their pre-entry planning, foreign individuals considering migrating to Belgium should check thoroughly whether they could be struck by the Cayman tax.

General Anti-Abuse Rule

A general anti-abuse rule (GAAR) aims to counter tax abuse by allowing the tax authorities to ignore a (series of) legal act(s) and levy taxes accordingly. Tax abuse requires that the purpose of a tax provision is frustrated, and that it was the taxpayer’s intent to do so only for tax reasons. If a presumption of tax abuse exists, the taxpayer can rebut this presumption by evidencing sufficient legitimate non-tax motives.

Inheritance Tax

Inheritance tax is a regional tax, so the rules differ in the Flemish, Brussels and Walloon regions.

Upon the death of a Belgian resident, inheritance tax is due from the heirs on the net value of the deceased’s worldwide assets.

Whether a person is resident in Belgium for inheritance tax purposes is determined according to (factual) criteria similar to those applicable for Belgian income tax purposes. The nationality or citizenship of the deceased and the residence and nationality or citizenship of the heirs are irrelevant for inheritance tax purposes.

Whether the deceased is a Flemish, Brussels or Walloon resident for inheritance tax purposes will be determined by analysing in which region the deceased lived the longest in the five years prior to their death.

Subject to conditions and within certain limits, foreign inheritance tax on immovable property can be offset against Belgian inheritance tax. In the Flemish region, this also applies to movable property. Belgium has only concluded bilateral inheritance tax agreements with Sweden and France. Since Sweden has abolished inheritance tax, only the agreement with France may have an impact on cross-border inheritance taxation issues between France and Belgium.

For non-residents, inheritance tax is only due on their Belgian real estate. For EEA residents, inheritance tax is due on the net value; for non-EEA residents, inheritance tax is due on the gross value of the Belgian real estate.

The heirs must file a tax return, generally within four months of the death, and pay the tax bill, generally within two months after receipt.

As inheritance tax is regional, the tax rates, tax computation and exemptions vary for the three regions. Except when flat rates apply, rates are double progressive and depend upon the kinship between the deceased and the heir, and upon the value of the assets. Direct line heirs and spouses (and cohabitant partners, under certain conditions) are taxed at rates of up to 27% (Flemish region) or 30% (Brussels capital region or Walloon region). The highest rates (for non-related beneficiaries) go up to 55% in the Flemish region, or 80% in the Brussels capital region or Walloon region.

When bequeathed to the surviving spouse or cohabitant partner, family homes and family businesses can benefit from favourable tax rates in all three regions, although the conditions differ from region to region.

The following reduced flat tax rates apply to public bodies and charitable institutions (including private and public foundations), among others:

• 0% or 8.5% (Flemish region);
• 7% or 25% (Brussels capital region); and
• 5.5% or 7% (Walloon region).

Inheritance tax legislation provides for so-called “fictitious legacies” increasing the taxable base, as well as an anti-abuse provision to counter illegitimate tax avoidance.

Gift Tax

Belgian gift tax is only due upon the “registration” of a document or deed in Belgium. Such registration is compulsory for notarial deeds (such as gifts, transfers of Belgian real estate, etc).

Cashless funds and other tangible movable assets (classic cars, art, etc) can be gifted without intervention by a Belgian notary, and thus avoid registration. Under certain conditions, such gifts can also avoid the levying of gift tax, but this will generally require that the donor survives the gift for at least three years in order to also avoid the levying of inheritance tax.

Gift tax is a regional tax so the rates are different in the Flemish, Walloon and Brussels regions. All regions have different rates for gifts of immovable property and of movable assets. The latter can generally benefit from low flat rates, ranging from 3% to 7%. Notwithstanding important regional reductions over the last couple of years, immovable gifts are still more expensive, as tax rates are progressive and can go up to 27% for spouses and (grand)children, and up to 40% for non-related beneficiaries (Flemish, Brussels and Walloon regions).

Family businesses can benefit from a gift tax exemption in all three regions. Flat rates and/or exemptions are also available for charitable gifts (eg, to private or public foundations).

Wealth Tax

There is no general wealth tax in Belgium.

The Belgian legislature has introduced a New Tax on Securities Accounts (NTSA), which entered into force on 26 February 2021. The NTSA is due from resident individuals, legal persons and partnerships on securities accounts held via resident and foreign intermediaries. The NTSA is equally due from non-resident individuals, legal persons and partnerships to the extent they hold securities accounts via Belgian intermediaries (and provided the taxing power has been allocated to Belgium based on an available double tax treaty). The NTSA is due on securities accounts with an average value of EUR1 million, to be determined at certain fixed reference dates. The rate is set at 0.15%. It should be noted that it does not matter whether the securities accounts are held in full ownership, usufructs or bare ownership.

The scope of the Belgian stock exchange tax (known as the TOB) was extended on 1 January 2017 and now also covers transactions executed by Belgian residents (individuals and entities) through non-Belgian financial intermediaries. The TOB is currently charged as follows:

• 0.12% on bonds, capped at EUR1,300 per transaction;
• 0.35% on stocks, capped at EUR1,600 per transaction; and
• 1.32% on redemptions of capitalisation shares of collective investments vehicles, capped at EUR4,000 per transaction.

Belgian real estate is subject to an annual tax, which is calculated on its deemed rental income (“cadastral income”).

Non-profit associations (eg, private foundations) are subject to an annual tax of 0.17% on their gross assets.

Inheritance tax and gift tax are regional, so the rules differ in the Flemish, Brussels and Walloon regions. The most important exemption that exists in all three regions is the transfer of family businesses and corporations, although the conditions differ from region to region. The tax rate varies for inheritance from 0% in the Walloon region to 3% or 7% in the Flemish and Brussels regions. The rate is 0% for donations in all three regions.

When bequeathed to or inherited by the surviving spouse or cohabitant partner, family homes can also benefit from a complete tax exemption in all three regions, although the conditions differ from region to region.

In the Flemish region, the surviving spouse can also benefit from an inheritance tax exemption on movable assets up to a maximum amount of EUR50,000, and bequests or donations to public charitable institutions can be exempted from inheritance or gift taxes.

Opportunities for income tax planning depend on the type of income realised by the taxpayer (ie, real estate income, investment income, professional income and other income). For each of these types of income, working/investing via a (management) company may be considered in order to optimise the effective tax rate applied to the income. This should be determined on a case-by-case basis.

In addition, the effective taxation on professional income may be optimised by granting stock options. Under certain circumstances, these benefit from a beneficial tax regime in Belgium.

Qualifying non-residents can optimise the taxation on professional income by applying for the new expatriate regime, under which up to 30% of gross annual taxable income can be paid as a tax and social security-free expense reimbursement.

In the last couple of years, the Belgian tax authorities have been challenging planning tools that were used in the past for income tax optimisation on the basis of the general/specific anti-abuse rules. In this context, the Belgian legislature has also implemented new specific anti-abuse legislation, such as a law that counteracts a planning tool that was frequently used in the past to realise a step-up on shares.

Please see 1.1 Tax Regimes.

Changes regarding gift and inheritance tax mainly concern the Flemish region. The Flemish tax administration frequently takes controversial positions that affect “classic” estate planning strategies and create uncertainty.

All regions have already (partially) aligned or still have to align their gift and inheritance tax legislation with the (federal) succession and matrimonial property law rules that entered into force on 1 September 2018. Strangely enough, the Flemish region already neutralised the tax benefits of marital agreements with participation clauses, while this type of clause is promoted by the federal legislature in the new matrimonial property legislation.

As of 1 July 2021, a commonly used technique combining charity and inheritance tax optimisation in a so-called “duo-bequest” has been abolished in the Flemish region.

Besides the introduction of the tax on securities accounts and the changes to the Cayman tax (see 1.1 Tax Regimes), other important developments concern increased reporting obligations.

DAC6 (the Directive on Administrative Co-operation) was approved on 25 May 2018 and focuses on the reporting of aggressive tax planning. It charges qualified intermediaries (lawyers, accountants, tax consultants, trustees, banks, etc) and ultimately even the taxpayer to report certain “cross-border arrangements” to the local tax authorities. Reported information is stored in a secure database and is exchanged between Member States.

On 18 September 2017, Belgium implemented Directive 2015/849 of 20 May 2015 (the anti-money laundering directive – the 4th AMLD), which provided for the creation of a central register of ultimate beneficial owners of corporate and other legal entities (UBO register). In the meantime, the 5th AMLD has already been published in the Official Journal of the European Union (Directive 2018/843 – the 5th AMLD), and shows that the EU considers the UBO register to be an important tool in the fight against money laundering.

The role of and access to this UBO register was strengthened in the 5th AMLD, which the Belgian legislature was supposed to transpose into Belgian domestic law by 10 January 2020. The draft legislation transposing this Directive was ultimately submitted before the Belgian Parliament on 8 June 2020 and adopted on 16 July 2020. As the UBO register was open to the general public, wealthy individuals across Europe viewed this UBO register as an important infringement of their privacy and as a possible threat to their safety. In a landmark judgement of 22 November 2022, the European Court of Justice ruled that access to information on UBOs in all cases and for all members of the public, as provided by the 5th AMLD, is invalid. As of 17 February 2023, Belgian domestic law restricted the public access to the UBO register by introducing a list of categories of persons and authorities with access to certain data from the UBO register, including any natural or legal person who can demonstrate a “legitimate interest”. This means that the applicant has to prove that they carry out an activity related to the fight against money laundering, terrorist financing and related underlying criminal activities.

Since its conception in 2015, the Cayman tax (see 1.1 Tax Regimes) has already been amended on a number of occasions, sometimes with (limited) retroactive effect. This was done to close perceived loopholes (eg, originally the treatment of trusts was more beneficial than that of foundations) signalled in the legal doctrine and the press at large. This trend threatens legal certainty and is largely due to what some experts consider to be the extremely poor quality of recent Belgian tax legislation.

A major reform of succession law has taken place, with the new rules entering into force on 1 September 2018.

The legislature aimed to align succession law rules with the current social reality of an increasing number of cohabitant (non-married) partners and blended families. Although the legislature intended to respond to the desire for more liberty to dispose of one’s estate, discussions revealed a resolute adherence to forced heirship rules.

Finally, the new succession law rules aim to minimise estate disputes, including by allowing family pacts.

In the slipstream of the new Belgian succession law and with effect as of the same date, matrimonial property law has also undergone an important facelift.

For many years, Belgium has welcomed numerous wealthy individuals. Dutch and French citizens in particular enjoyed the vicinity of their home countries and the Belgian tax climate, with no capital gains taxation, low tax rates on investment income, no wealth tax and opportunities to transfer movable assets without gift or inheritance tax definitely being Belgium’s trump cards.

However, due to many legislative initiatives over the last few years, the overall tax burden for wealthy individuals has increased substantially and Belgium appears to no longer be as attractive as it once was. As a result, and as the mobility of people (especially young people) has increased, more people are leaving Belgium and migrating to countries such as the UK, Switzerland and the USA.

Belgium has strict forced heirship rules, limiting the freedom to dispose by gifts or wills. These rules only apply if Belgian succession law applies (in accordance with the European Succession Regulation) – ie, when the deceased had their established residence in Belgium and did not choose the law of their nationality.

Forced heirship rules protect the deceased’s children and surviving spouse by entitling them to a “reserved portion” of the so-called “fictitious hereditary mass”. This mass is composed of the assets of the deceased upon death as well as all lifetime gifts made by the deceased, regardless of when or to whom these gifts were made.

Under the new succession law rules, applicable from 1 September 2018, gifts are valued at the time of the gift (except when the donee does not have free disposition of the gifted assets, in which case valuation occurs at the time when the donee acquires the right of free disposal of the gifted assets, being generally at the time of the donor's death), and this value increases every year in accordance with the consumption index. Debts upon death are deducted from the assets of the deceased.

The portion reserved for descendants amounts to half of the fictitious hereditary mass, regardless of the number of children. In the presence of a surviving spouse, the entitlement of the children can be limited to the bare ownership.

The surviving spouse can claim the usufruct on the family home (including the household effects) or usufruct on half of the fictitious hereditary mass. In the presence of heirs entitled to a reserved portion, the surviving spouse’s reserved portion will burden the disposable portion.

Forced heirship rules are mandatory. In principle, it is not possible to waive such rights during the life of the testator, except for a future spouse if one of the spouses has children from a previous relationship. Such waiver must be done in a marital agreement and cannot deprive the surviving spouse of the use of the family dwelling (including the household effects) for a period of six months from the day the other spouse has deceased. As of 1 September 2018, it is also possible for heirs entitled to a reserved portion to explicitly waive their forced heirship right on the gifted assets by way of a punctual or global inheritance pact.

Both prenuptial and postnuptial marital agreements are quite common in Belgian law. Such agreements need to be executed before a civil law notary and are binding for both spouses and the court. Spouses cannot make arrangements regarding alimony payments in the marital agreement.

In the absence of a marital agreement, spouses are married under the default regime of community of gains, whereby all assets acquired during the marriage are considered community property, except for those acquired by a spouse gratuitously through gift or inheritance.

Upon the dissolution of the marriage, the community property, in principle, will be divided equally between the spouses. Spouses can choose to adjust the community property and exclude certain assets, or to use the “universal” community property system in which property acquired before the marriage is included as well as property acquired gratuitously during the marriage. Spouses can also agree to a separation of property regime.

As of 1 September 2018, the new matrimonial property law has introduced a legal framework for a separation of property regime with a participation clause for gains accrued during the marriage (comparable to the German Zugewinngemeinschaft): each spouse owns their own assets, regardless of whether they were acquired before or during the marriage. When liquidating the regime (upon death, divorce or a change of the matrimonial regime), gains accrued during the marriage are equalised via payment or claim.

Each of the spouses can dispose of their own assets, except for the family dwelling, which may never be sold or mortgaged by one of the spouses without the consent of the other spouse. Common property must be administered in the interest of the family. As a rule, both spouses can separately administer the common property. For important matters (eg, mortgage loan or gifts), both spouses must act jointly. In the absence of the consent of both spouses, the legal act can be declared invalid, although third parties’ rights are protected if they acted in good faith.

The new matrimonial property law rules allow courts to apply a fairness correction when spouses married under a separation of assets regime get divorced and unforeseeable circumstances lead to a clear injustice for one of the spouses (to be appreciated by the court). Application of the correction would result in a payment by the “rich(er)” spouse of a maximum of one-third of the gains accrued during the marriage. The correction can only be applied when it is explicitly provided for in the marital agreement. Civil law notaries must inform future spouses of the possibility to insert the fairness correction mechanism in the marital agreement.

In principle, a gratuitous transfer of assets (during life or at death) does not trigger a step up (nor capital gains taxation) for income tax purposes. The basis of the beneficiaries of the transfer in the property will be the same as the transferor’s (historical acquisition cost).

The transfer of assets to the next generation is generally realised through lifetime gifts. Such gifts are generally heavily modelled to the parents’ wishes and can be organised in a tax-free manner or at least at reduced tax rates (see 1. Tax).

For movable assets (eg, investment portfolios or collections of artworks or classic cars), a Belgian family partnership is often used. This company without legal personality is transparent for income tax purposes, and minimal legal provisions and formalities allow a customised and discrete set-up. Parents can retain control over the assets and their income via the by-laws of the company, in combination with the conditions and modalities stipulated in the gift deed.

However, recent changes to the Belgian Code on Economic Law qualify all family partnerships as an “enterprise”, making the registration in the UBO register obligatory, and subjecting them to Belgian accounting rules. If the revenue of the family partnership does not exceed EUR500,000, a simplified accounting obligation may apply.

Prior to lifetime gifts of family businesses, these businesses are often sheltered in a Dutch or Belgian private foundation used as a Stichting Administratiekantoor (see 4. Family Business Planning).

Belgian law does not provide for specific rules regarding the succession of digital assets, but several legal scholars are starting to pay particular attention to the “digital legacy” and the obstacles – often practical – resulting from the absence of specific legal rules.

Following the Bitcoin hype at the end of 2017, the Belgian tax authorities have expressed a particular interest in gains on cryptocurrencies. If they are speculative and realised outside the normal management of private wealth, such gains can be taxed as other income at 33% and, in some cases, even as professional income (at progressive rates of up to 50%).

In the future, tax authorities will most likely sharpen their interest in (the taxation of) transactions and the ownership of digital assets.

In a purely Belgian context, trusts are not (or no longer) used for tax and estate planning purposes. Tax authorities have always been suspicious towards trusts, convinced they were used to hide assets.

A Belgian private foundation can be used to pursue altruistic objectives (such as charitable giving or private art collections). Merely passing wealth to the next generation is likely not acceptable, although supporting family members across generations (eg, in their education) and making distributions to that purpose might be. Positive rulings have been given by the Belgian tax authorities in this respect.

Foreign private foundations are recognised in Belgium but can fall into the scope of the so-called Cayman tax (see 1.1 Tax Regimes).

One must also consider that forced heirship rules may apply on transfers to private foundations (see 2.3 Forced Heirship Laws).

The Belgian legal jurisdiction recognises trusts. With the codification of the existing case law in the Belgian Code on Private International Law in 2004, the Belgian legislature intended trusts to be recognised and take legal effect within the Belgian legal jurisdiction with more legal certainty and in a more predictable way.

The use of trusts is generally not recommended from a tax perspective, particularly in view of the Cayman tax (individual income tax – see 1.1 Tax Regimes) and the tax authorities’ position that distributions upon or after the death of a Belgian tax resident settlor may be subject to inheritance tax (at the tax rate applicable in accordance with the kinship between settlor and beneficiary).

For succession law purposes, one should bear in mind that Belgian forced heirship rules may apply on transfers (without consideration) to trusts (see 2.3 Forced Heirship Laws).

See 1.1 Tax Regimes, regarding the Cayman tax.

Suitable asset protection measures should be evaluated on a case-by-case basis.

In some cases, a marriage contract for the separation of assets – whether in combination with (at all times revocable) lifetime gifts from one spouse to another or not – can be useful for creditors’ protection purposes. The use of limited liability companies can also ringfence the shareholder’s other assets, and life insurance contracts can also offer some asset protection, to a certain extent.

Specific provisions against fraudulent conveyance may obstruct asset protection strategies.

As mentioned in 1. Tax, family businesses can benefit from favourable gift tax rates under certain conditions. As a result, the most popular planning strategy for family businesses is a lifetime gift of the shares.

In most cases, parents attach several conditions and modalities to such gifts. For example, they retain the usufruct, which entitles them to the dividends and the voting rights of the shares. Specific clauses can also reduce the rights of the children to transfer the gifted assets (eg, to their spouse), or can provide for a fideï-commissum de residuo, resulting in a gift of the remainder of the assets when a child-beneficiary dies (eg, to their siblings or children). Such clauses usually seek tax advantages as well as protection against the dissipation of the family wealth.

Prior and complementary to the gift, the family business is often “wrapped” via a controlling vehicle such as a Dutch or Belgian Stichting Administratiekantoor (STAK). The shares of the family business are first contributed to the STAK in exchange for depositary receipts (certificates), after which these depositary receipts are gifted. From a tax point of view, the certificates are assimilated to the shares and the STAK is tax transparent, provided certain conditions are met.

The STAK enables the implementation of family governance and a well-planned transition to the next generation. In some cases, the STAK rules are embedded in a family constitution or charter. A STAK can be a more sophisticated alternative to a shareholders’ agreement.

If a transfer of shares is subject to gift or inheritance tax, the taxable base equals the fair market value. This value can be influenced by a lack of marketability and/or control when a partial interest (minority stake) is transferred (eg, due to specific provisions in shareholder agreements or by-laws). As no guidelines exist with regard to applicable discounts and the tax authorities could thus seek to challenge such discounts, it is recommendable to have an objective valuation report.

Estate disputes are often related to forced heirship rules and (the valuation of) unequal or undisclosed lifetime gifts and/or assets.

As mentioned in 2. Succession, new succession law rules entered into force on 1 September 2018. One of the legislature’s major objectives was to minimise the number of conflicts after death.

The new rules enable families to sign off punctual inheritance agreements or global inheritance agreements (family pact), aiming for a fair and balanced treatment of all heirs.

The new rules also provide (in principle) for a valuation of gifts at the time of the gift (not upon the date of death of the donor), taking into account, however, the annual indexation as mentioned in 2.3 Forced Heirship Laws; they also allow for a settlement “in value” (and not “in kind”) of lifetime gifts that require compensation (eg, to the extent they violate forced heirship rights).

Furthermore, mediation and arbitration processes are more often promoted to avoid lengthy (and costly) court procedures.

See 5.1 Trends Driving Disputes.

As Belgian civil law has a numerus clausus of rights in rem, fiduciary contracts are not allowed. As a result, fiduciary powers cannot be organised under Belgian law.

See 6.1 Prevalence of Corporate Fiduciaries.

See 6.1 Prevalence of Corporate Fiduciaries.

See 6.1 Prevalence of Corporate Fiduciaries.

Entry into Belgium and long-term stay in Belgium are easier for citizens of the EU and the European Free Trade Association (EFTA) states (Iceland, Liechtenstein, Norway and Switzerland) than for citizens of other countries. No visas or working permits are required for EU and EFTA citizens, but proof of sufficient financial means and health insurance is required upon registration in the population register.

After five years of uninterrupted stay in Belgium, EU and EFTA citizens can automatically reside permanently in Belgium. Other citizens need visas and working permits but are also eligible for permanent residence after five years, albeit subject to stricter conditions and a case-by-case review.

Belgian nationality can be acquired on legal grounds (eg, by birth) or voluntarily, generally by applying for a “nationality declaration”. Applicants must be at least 18 years old and have had their legal residence in Belgium for at least for five years and must, in principle, evidence knowledge of one of the national languages (Dutch, French or German) and social integration and economic participation (or an active participation in the community if the applicant legally resides in Belgium for at least ten years).

In exceptional circumstances, Belgian nationality can be acquired by “naturalisation”, granted by Parliament in cases of “extraordinary merit” in the fields of science or sports, or in the socio-cultural area.

Belgian law does not provide for specific special planning mechanisms for minors or adults with disabilities, as such.

Belgian family law provides for protective measures when minors or adults with mental incapacities are involved in certain transactions (eg, a purchase of real estate or a sale of assets). These measures generally provide for a judge’s approval of these transactions, or for the (temporary or permanent) appointment of an administrator.

In 2002, the Belgian legislature explicitly referred to planning for mentally incapacitated persons when introducing the private foundation in Belgian law. A private foundation can be set up to financially support incapacitated family members – eg, by funding their medical or housing expenses. However, such planning requires particular attention, especially with regard to the destination of the remainder of the funds of the private foundation in case of the death of the incapacitated family member.

In principle, legal guardians are appointed by the court, but parents may appoint a preferred legal guardian (eg, in their last will). The court will generally validate such appointment.

Guardians have reporting obligations to the court, and require the court’s approval for specific transactions, such as the purchase of real estate, the sale of assets, entering into loan agreements and accepting or refusing gifts.

The cost of longevity challenges the Belgian legal social security system, which is still generally seen as being very comprehensive and efficient. The Belgian legal system covers healthcare, old age and invalidity pensions and long-term care insurance, among others. On an individual basis, it can be complemented with individual “extra-legal” arrangements, such as pension savings or medical insurance and retirement plans. Under certain conditions, such arrangements can benefit from tax reductions for individual income tax purposes.

An important recent trend is the use of a lasting power of attorney (often part of a so-called “living will”), whereby one can mandate one or more trusted representatives for situations where a lack of mental capacity would inhibit the making of decisions on personal matters (eg, health) and/or financial and property affairs. Court supervision can be avoided by giving a lasting power of attorney and providing for extrajudicial protection arrangements while still capable.

Children born out of wedlock and fully adopted children inherit from their parents in the same way as children born within a marriage. In the case of a simple adoption, the adopted children can also inherit from their original family.

LGBTQIA+ rights in Belgium are some of the most progressive in the world. Belgium was the second country to legalise same-sex marriage in 2003, while same-sex adoption was legalised in 2006 and does not differ from opposite-sex adoption.

Gifts to approved charitable institutions can benefit from a tax deduction for individual income tax purposes. Gifts must be made in cash or, under very strict conditions, with artworks. Only 45% of the amount is tax deductible (60% for gifts made in 2020), and the deduction is limited per taxable person to 10% of the progressively taxed net income (20% for gifts made in 2020) (ie, predominantly real estate and professional income) or EUR392,200 (for the income year of 2023).

As mentioned in 1. Tax, charitable institutions (including private foundations) can benefit from reduced flat gift and inheritance tax rates, under certain conditions.

Private foundations are regularly used as private charitable planning tools. A private foundation allows the founder to contribute (part of) their wealth to a specific charitable purpose, and to organise the governance of the foundation according to their wishes.