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Inheritance tax and law
Hello, if I understand correctly, the Inheritance law in Belgium, is levied at progressive rates and varies according to the degree of kinship, region where the inheritance is opened and to the share inherited by each of the heirs. For example, for Brussels region, for a tax base of €250,000 - €500,000 the tax rate is 24%. In my opinion this is preposterous. Is there a way I can give to my children what I have to give them, without paying such massive amounts to the government? I have, as everyone else owing property in Belgium, paid a lot in notaire fees, regional and property taxes, throughout the years. Why something I have paid with a lot of sacrifices, and now I want to give to my kids, needs to be taxed AGAIN?
You need to talk to a notaris to get a definitive answer.
However, having done just that, I now give money to my kids each year. There is an amount which you can give without question and higher amounts which become tax free after a number of years. There are also specific instances where you can give additional sums without question - grandchild getting married, for example.
I've no idea whether every exclusion applies in all 3 regions of the country.
BTW, the guy who sets the rates doesn't like the idea of having to pay any more than you do!
BTW again, the inheritance tax rate in UK STARTS at 40%!
You DEFINITELY need to see a notaire, as you're almost certainly non-Belgian, and can therefore apply the inheritance law of your own country, if you write a will correctly. This will have fairly radical consequences on the tax implication of death as well, so you must get professional help.
Aleida,
please read carefully first this and than contact a notaire.
https://e-justice.europa.eu/content_succession-166-en.do?init=true
As J wrote the new EU legislation has consequences on your inheritance law applicable (you don't say where you are from), but it does not have consequences regarding the inherit taxes of Belgium. These are still 2 different shoes!
Good luck - we had to make in August 2015 a new will to make the best out of the new EU legislation.
Go and speak to a notaire. Yes the marginal tax rate on the final tranche above 250,000 is
Go and speak to a notaire. Yes the marginal tax rate on the final tranche above 250,000 is 24%, but no one actually pays that.
On a theoretical €300,000 in the Brussels region, your tax would actually be around 37,000, an effective rate of 12%. And that's before any other perfectly legal ways to avoid the tax such as lifetime gifts, and if you have more than one child, the inheritance will be divided and each inheritance taxed at lower effective rates.
Although the headline rates may seem high, virtually no one in Belgium pays large amounts of inheritance tax.
J is very keen on promoting the new(-ish) right for citizens of other countries to have the inheritance laws of their home country, rather than of Belgium where they are domiciled, applied in the unfortunate event of their death.
That right certainly has its uses, it means, for example, that those on just a tour of duty in Belgium don't need to rewrite their existing wills, and it also means that if you are, say, British you can disinherit your children (which isn't permitted under Belgian law).
However, and it is a big however, Belgian inheritance TAX laws will still apply if you are domiciled in Belgium, and making use of this new right CAN increase your total Belgian inheritance tax bill. A simple example is that where a home is owned equally by a husband and wife with children, if one dies and Belgian law applies, the relevant half-ownership of the home will pass direct to the children (instead of passing to the surviving spouse as typically happens in the UK) although the surviving spouse will acquire usufruit (effectively the right to benefit from the home while they survive). Inheritance tax would be payable by the inheriting children. If UK law is applied, the surviving spouse can inherit but becomes liable to pay inheritance tax. When the surviving spouse dies and the home passes in totality to the children, they would become liable for inheritance tax on the formerly surviving spouses half of the value under Belgian law but on the whole value if UK law has been applied.
The situation isn't simple and you need to go through the whole thing with a notaire/notaris.
Could someone clarify the recent EU law from which the UK, Ireland and Denmark opted out? If I understand correctly, we as Brits resident in Belgium can opt for English law to apply to our wills on the understanding that Belgian inheritance tax laws apply and that tax is paid to the Belgian government.
I would just clarify to Becasse that Scots law is Napoleonic as in Belgium so that under Scots law the wife and children may not be disinherited. Under English law, a person can disinherit their family, and leave their estate to anyone or to any organisation.
Would appreciate clarification before going to a notaire. Many thanks.
