From 1 December, it could become mandatory to register foreign notarised deeds used by Belgian residents to make gifts of movable goods. If passed, what impact would this proposed law have?
At the moment, it is possible under Belgian law to make gifts of movable goods (cash, securities, works of art, etc.) with or without the services of a notary. However, notarised deeds are mandatory for certain types of gift, including transfers of bare ownership and registered shares.
What are the advantages of making gifts before a foreign notary?
Many Belgians already used a foreign notary (often from the Netherlands) when making certain gifts. The advantage of doing it this way is that such gifts are exempt from gift duty/tax (unless registered voluntarily). However, it is important to bear in mind that inheritance duty/tax applies if the giver passes away within three years of making the gift (1).
Will the bill do away with the practice of making gifts before a Dutch notary?
If the proposed law were to be passed, that would mean the end of notarised deeds signed before a foreign notary.
Gift duty/tax in the three regions
A recent bill (55/1357), adopted at second reading by the Finance Commission within the Chamber, included a provision requiring the registration of all gifts of movable goods made before a foreign notary from 1 December 2020. This registration requirement would result in gift duty/tax being levied (notwithstanding specific exemptions) in all three regions. An opinion of the Council of State was requested at a plenary session held in the Chamber on 15 July 2020. As such, the vote on the adoption of the bill has been pushed back to 1 September 2020.
The following table shows the gift duty/tax in the three regions:
| Flanders | Brussels-Capital | Wallonia | |
|---|---|---|---|
| Between spouses/legal cohabitants (2) and in direct line | 3% | 3% | 3.3% |
| Between other people | 7% | 7% | 5.5% |
What types of gift could be affected? What about bank gifts and gifts by hand?
Only gifts made before a foreign notary will be subject to the new registration requirement. It follows that it will therefore still be possible to make indirect gifts by bank transfer or by hand without any gift duty/tax being levied. It is important to remember, though, that gifts are subject to inheritance duty/tax if the giver passes away within three years of making the gift.
What about gifts made before a foreign notary prior to 1 December 2020?
The text does not include any provisions for retroactive application. Gifts made in the past via a foreign notary would therefore not be subject to the registration requirement.
Why is an indirect gift or a gift by hand not necessarily an alternative?
Bare ownership or registered shares (including shares in a “société simple” (simple partnership) or family holding company (3)) can only be gifted by means of an “acte authentique” (notarised deed).
How to plan for gifts and bequests
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Information correct at the start of August 2020.
(1) Flanders wishes to increase this period of time to four years. It has already been set at seven years (where the giver is a resident of Flanders) when the gift involves shares in a family company.
(2) The same is true for those in de facto cohabitation “cohabitation de fait” in Flanders, subject to certain conditions.
(3) The 0% tax rate does not apply to gifts of shares in a family business.
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