Recent developments

Recent changes

Have there been any notable recent developments in the provision of private client and offshore services in your jurisdiction, including any regulatory changes or case law?

In late 2017 the Belgian corporate income tax regime was significantly reformed to provide, among other things, a lower tax rate (25% from 2020) and a 100% exemption for qualifying dividends and capital gains; however, conditions for capital gains were tightened. A new tax on securities accounts was introduced from 10 March 2018 and the scope of application of the so-called ‘Cayman tax’ was extended in 2018.

Since 1 September 2018, both inheritance law and matrimonial property law have been reformed. For inheritance law especially, it is the most important reform since the introduction of the Civil Code more than 200 years ago. The reforms significantly simplified and modernised the existing rules and their affects cannot be underestimated.

Ultimate beneficial owners of, among others, companies incorporated in Belgium must be registered (for the first time) in the Belgian ultimate beneficial owners register by 30 September 2019. Further, a new Companies Code will enter into force on 1 May 2019. The new code is a major modernisation of Belgian company law, bringing more flexibility and simplification.

Individual taxation

Residence and domicile

How is residence/domicile determined for tax liability purposes in your jurisdiction?

Inhabitants of Belgium (ie, persons whose domicile (or seat of wealth if not domiciled in Belgium) is located in Belgium) are subject to personal income tax. ‘Domicile’ refers to a factual situation characterised by the person’s habitual residence, which implies a certain continuity; ‘seat of wealth’ refers to the central place where a person’s assets are managed. In practice, an individual’s domicile and seat of wealth are usually the same.

Unless proven otherwise, all individuals listed in the National Register of Individuals are considered inhabitants of Belgium for income tax purposes. A taxpayer is liable to the additional income tax of the region (ie, Flemish region, Brussels capital region or Walloon region) in which their tax residence is located on 1 January of the tax year.

For Belgian inheritance and gift tax purposes, although the wording of the law differs, the criteria ‘domicile’ and ‘seat of wealth’ apply in the same way to determine someone’s residence. In the Flemish region – and despite the fact that inheritance tax law does not provide for this legal presumption – the Flemish tax authorities take the position that an individual was a resident of Belgium/the Flemish region for inheritance tax purposes if they were listed in the National Register of Individuals, unless their heirs prove otherwise.

Income

Describe the income tax regime in your jurisdiction (including tax base, rates, filing formalities and any exemptions, reliefs or deductions).

An individual’s taxable income is determined by four income categories:

  • real estate income;
  • income from movable property (including dividends, interests and royalties);
  • professional income (including employment income, business income and pensions); and
  • miscellaneous income (ie, income that does not fall under the other categories).

Each category has specific rules for calculating net income. In general, the net real estate income and net professional income is taxable at progressive rates from 25% up to 50% (the latter applies to income exceeding €40,480 for income year 2019).

Net real estate income is either the deemed income (‘cadastral income’) or net rental income.

Professional income consists of:

  • business income from commercial or industrial activities;
  • gains from professional services;
  • profits and gains from a former professional activity;
  • employment income; and
  • pension income.

In general, taxable professional income is calculated by reducing the gross income by any professional or business expenses and operating losses of the relevant year and losses of preceding years.

In principle, income from movable property is subject to withholding tax if paid in Belgium. Since 1 January 2017, a rate of 30% has applied to most dividends and interest. If no withholding tax is levied, the income must be declared in the annual tax return and a tax equal to the withholding tax will be levied.

Any income that is listed as miscellaneous is taxed separately without being added to the other types of income. The primary forms of miscellaneous income are:

  • capital gains on the sale of shares, except if realised as part of the normal management of private wealth (33% tax);
  • capital gains realised on the transfer of an important share participation in a Belgian company (more than 25%) to a non-EEA legal entity (16.5% tax);
  • capital gains on the sale of Belgian real estate (other than the family dwelling) within five or eight years after acquisition (33% tax for land within five years; 16.5% tax for built property within five years and for land in the sixth, seventh or eighth year); and
  • occasional (non-professional) profits and proceeds with speculative intent (33% tax).

Several exemptions and reductions apply such as child allowances and reductions for qualifying gifts or for energy saving expenditures. The tax amount is increased with communal tax (7% on average).

The tax year is the same as the calendar year.

The annual personal income tax return can be filed on paper or electronically via www.taxonweb.be. In practice, the paper version of the tax return must generally be filed by the end of June, while taxpayers that file their return electronically are generally granted an extension of some weeks. Tax advisers and accountants that file clients’ tax returns are generally granted an extension of some months. Special terms apply in case (for example) a taxpayer emigrates during the year.

Tax must be paid within two months of receiving a tax bill.

Capital gains

Describe the capital gains tax regime in your jurisdiction (including tax base, rates, filing formalities and any exemptions, reliefs or deductions).

Capital gains realised outside professional activities on the sale of shares are taxable at a rate of 33%, except if realised as part of the normal management of a person’s private wealth, in which case they are exempted. However, capital gains realised outside professional activity on the transfer of an important share participation (more than 25%) in a Belgian company to a non-EEA legal entity are taxed at 16.5%. In both cases, the taxable net capital gain must be declared in the annual income tax return and corresponds to the difference between the sales price and the acquisition cost.

Capital gains on the sale of Belgian real estate (other than the family dwelling) within five or eight years after acquisition are taxed at 16.5% or 33% (33% tax for land within five years; 16.5% tax for built property within five years and for land in the sixth, seventh or eighth year). The taxable net capital gain must be declared in the annual income tax return and corresponds to the difference between the sales price and the adjusted acquisition price, which is raised with at least 25%.

Inheritance and lifetime gifts

Describe the inheritance and gift tax regime in your jurisdiction (including tax base, rates, filing formalities and any exemptions, reliefs or deductions).

Competence of the regionsGift and inheritance tax fall under the competence of the three regions:

  • the Flemish region;
  • the Brussels capital region; and
  • the Walloon region.

Therefore, different gift and inheritance tax rules apply in the three regions. The most relevant differences relate to the categories of gift and inheritance tax rates and the criteria to be considered as partners (eg, spouses and cohabiting persons).

In each region the categories of gift and inheritance tax rates depend on the degree of kinship between the donor or deceased and the beneficiary, the value of the gift or inheritance and the nature of the donated or inherited goods.

Relevant factorsThe relevant factor that causes Belgian gift tax to apply is the registration of the donation with the Belgian tax authorities. Such registration is mandatory for each donation that is done before a Belgian notary. The registration of a donation of tangible movable property is not mandatory if not done before a Belgian notary; such donation is not subject to gift tax unless it is voluntarily registered with the Belgian tax authorities.

Belgian inheritance tax is due if the deceased was a resident of Belgium (ie, if they had their domicile or seat of wealth in Belgium).

For Belgian residents, the region where the donor or deceased has their place of residence will in principle determine which rules will apply (ie, Flemish, Brussels or Walloon).

For non-residents, gift and inheritance tax is due on the donation or inheritance of Belgian immovable property, according to the rules that apply in the region where the immovable property is located. Gift tax on movable property is only due if the donation is registered with the tax authorities. Upon the death of a non-resident, no inheritance tax is due on their Belgian movable property.

Inheritance taxWhen a Belgian resident passes away, inheritance tax is due on the net value of their worldwide estate. Subject to certain conditions and within certain limits, foreign inheritance tax on foreign immovable property can be offset against the Belgian inheritance tax on the foreign immovable property.

For non-residents, inheritance tax is only due on their Belgian immovable property. If the deceased was a resident of the European Economic Area, inheritance tax is due on the net value, while for non-EEA residents, inheritance tax is due on the gross value.

An inheritance tax return must be filed within four, five or six months from the deceased’s death, depending on the physical location where the deceased was at the time they passed away (ie, in Belgium or within or outside the European Economic Area, respectively). In the Flemish region, the tax is due within two months of receiving the tax bill. In the Brussels and Walloon regions, tax is due within two months of the last day of the filing period.

In the Flemish region, inheritance tax is due as follows:

  • In direct line and between partners: movable and immovable property are taxed separately at rates of 3% to 27% (27% above €250,000). The calculation is made on the net share per beneficiary.
  • Between brothers and sisters: no split between movable and immovable property. On 1 September 2018, tax rates were lowered and now range from 25% to 55% (55% above €75,000). The calculation is made on the net share per beneficiary.
  • Between all other beneficiaries: no split between movable and immovable property. On 1 September 2018, tax rates were lowered and now range from 25% to 55% (55% above €75,000). The calculation is made on the total net shares of these persons, then divided among them according to their share in the inheritance.

In the Brussels capital region, inheritance tax is due as follows:

  • In direct line and between partners: tax rates range from 3% to 30% (30% above €500,000). The calculation is made on the net share per beneficiary.
  • Between brothers and sisters: tax rates range from 20% to 65% (65% above €250,000). The calculation is made on the net share per beneficiary.
  • Between uncles or aunts and nephews or nieces: tax rates range from 35% to 70% (70% above €175,000). The calculation is made on the total net shares of these persons, then divided among them according to their share in the inheritance.
  • Between all other beneficiaries: tax rates range from 40% to 80% (80% above €175,000). The calculation is made on the total net shares of these persons, then divided among them according to their share in the inheritance.

In the Walloon region, inheritance tax is due as follows:

  • In direct line and between partners: tax rates range from 3% to 30% (30% above €500,000). The calculation is made on the net share per beneficiary.
  • Between brothers and sisters: tax rates range from 20% to 65% (65% above €175.000). The calculation is made on the net share per beneficiary.
  • Between uncles or aunts and nephews or nieces: tax rates range from 25% to 70% (70% above €175,000). The calculation is made on the net share per beneficiary.
  • Between all other beneficiaries: tax rates range from 30% to 80% (80% above €75,000). The calculation is made on the net share per beneficiary.

Gift taxA donation of movable property that is registered, will be taxed at flat rates:

  • Flemish region and Brussels capital region: 3% in direct line and between partners and 7% between all other persons; and
  • Walloon region: 3.3% in direct line and between partners and 5.5% between all other persons.

Immovable assets are taxed at progressive rates. Since 3 September 2018 they are the same in all three regions. The rates range from 3% to 27% in direct line and between partners (27% above €450,000). For other persons, the applicable rates are higher and range from 10% to 40% (above €450,000).

Exemptions and reliefsThe most important tax reliefs concern the family dwelling and the assets of family owned businesses or shares of family owned companies. In the Flemish region, as from 1 September 2018, a new inheritance tax exemption was introduced for the first €50,000 of movable assets that are inherited by the deceased’s partner.

Family dwellingIn all three regions, the part of the family dwelling that is inherited by the partner is exempt from inheritance tax. A ‘partner’ is defined as:

  • the deceased’s spouse;
  • the deceased’s legal cohabitant; or
  • in the Flemish region only, the person that de facto cohabitated with the deceased provided they cohabitated for at least three years and shared a common household.

In the Walloon region, the exemption is subject to the supplementary condition that the family dwelling has served as the main residence of the couple for at least five years at the time of the deceased’s death.

Family owned businesses and companiesEach region has a specific regime for the donation or inheritance of assets invested in a family owned business or shares of a family owned company, subject to certain conditions. The conditions in the Flemish and Brussels capital regions are almost identical. In the Walloon region a reform of the current regime has been announced, which is expected to result in a similar regime to that of the current Flemish and Brussels regime.

In all three regions, a donation of those assets or shares is tax exempt if all conditions are met. In the current Walloon regime, the exemption can also apply to shareholder loans to the family owned company.

If inherited, these assets or shares are taxed at a flat inheritance tax rate of 3% or 7% in the Flemish and Brussels capital region. In the current Walloon regime, the conditions are more strict, but if met, an inheritance tax exemption applies to these assets or shares and even to shareholder loans to the family company.

Real estate

What taxes apply to individuals’ acquisition and disposal of real estate in your jurisdiction?

On the acquisition of real estate, transfer tax (registration duties) is due on ‘old’ properties, while 21% value added tax (VAT) is due on ‘new’ properties. Real property is considered ‘new’ until 31 December of the second year following the year in which the real property was first occupied or taken into possession. In principle, the buyer must pay transfer tax or VAT.

The taxable base for transfer tax purposes is the highest of the acquisition price and the market value of the real property. The transfer tax rate depends on the region in which the real property is located:

In the Flemish region, transfer tax is in principle 10%. Since 1 June 2018, subject to conditions, a reduced rate of 7% applies for the acquisition by a private individual of their first main residence. For home prices up to €200,000, an extra tax discount of €5,600 is granted.

In the Brussel Capital Region, transfer tax is in principle 12.5%. For homes up to €500,000, the taxable base can be reduced by €175,000 if all conditions are met.

In the Walloon region, transfer tax is in principle 12.5%. Subject to conditions, a reduced rate of 5% or 6% can apply, or the taxable base can be reduced by €20,000.

Non-real estate assets

Do any taxes apply to the acquisition and disposal of other assets apart from real estate?

In principle, VAT applies on the acquisition of assets (other than real estate) if sold by someone whose business activity is subject to VAT. The standard tax rate is 21%.

Other applicable tax regimes

Are any other direct or indirect tax regimes relevant to individuals?

Expatriate tax regimeForeign executives, specialised foreign staff or foreign research staff that are appointed to work temporarily in Belgium can apply for a special expatriate tax regime. Eligible persons must prove that they perform activities that require a special knowledge and responsibility (ie, executive functions). If approved, they are treated as non-residents and are therefore only taxable on their Belgian source income. The benefits are two-fold:

  • certain expatriate allowances or reimbursements of expenses; and
  • the so-called 'foreign business travel exclusion' are excluded from the taxable basis.

Tax on securities accountsThere is no general wealth tax in Belgium. However, real estate is subject to an annual tax which is calculated on its deemed income (‘cadastral income’). From 10 March 2018 a new annual tax of 0.15% is levied on the total value of in-scope securities that are held by:

  • Belgian resident individuals on their Belgian or non-Belgian securities accounts; and
  • non-resident individuals on their Belgian securities accounts, if the average annual value of those securities equals or exceeds €500,000.

This threshold is considered per account holder and irrespective of the number of financial institutions involved.

Cayman taxFor income tax purposes, Belgian resident founders (which is a broadly defined concept) of a ‘legal construction’ must report its existence in their annual income tax return. Trusts and low-taxed foreign legal entities (including foundations) are, among other things, considered as such legal constructions. In addition to this reporting obligation, a look-through approach (commonly referred to as the ‘Cayman tax’) was introduced in 2015 for these legal constructions: their founders are taxed on any income that has not been paid out or distributed by these legal constructions as if they had directly received that income. Any subsequent payment or distribution by a qualifying legal construction is taxed as a dividend (in principle at a rate of 30%) in the hands of the receiver, unless it can be proven that this payment or distribution makes the capital of the legal construction fall below the capital that was contributed by its founder(s) or that the payment or distribution was taxed before under the look-through approach.

Planning considerations

Are there any special tax planning considerations for individuals with a link to your jurisdiction?

In recent years, wealthy individuals and families residing in Belgium have been confronted with a considerable increase of their tax burden, especially on investment income. Some have looked into more complex yet favourable tax regimes (eg, for investments in private equity investment funds). Others examine the structuring of investments through a normally taxed company, since the Belgian corporate income tax regime has recently been reformed quite substantially, providing, among other things, for lower tax rates (base rate of 25% as from 2020) and – subject to certain conditions – a full exemption for qualifying dividends and capital gains.

Especially before migrating to Belgium, persons should also be aware of the so-called ‘Cayman tax’: a look-through approach for legal constructions such as trusts and low-taxed foreign legal entities (including foundations). Such legal constructions must not only be reported, but their founders (which is a broadly defined concept) are also taxed on any income that has not been paid out or distributed by these legal constructions, as if they had directly received that income. Subsequent distributions are taxed as a dividend (in principle at a rate of 30%) unless it can be proven (for example) that the payment has been taxed before under the look-through approach.

Trusts, foundations and charities

Trusts

Are trusts legally recognised in your jurisdiction? If so, what types are available and most commonly used?

Although Belgium does not have its own trust law, foreign trusts are recognised. Trusts will be governed by the law of choice of the settlor. When no choice of law is made or if that choice is invalid, the trust will be governed by the law of the state where the trustee has or had their habitual residence at the time that it was created.

What rules and procedures govern the establishment and maintenance of trusts?

N/A.

How are trusts taxed in your jurisdiction?

Tax inspectors sometimes struggle with the tax treatment of trusts, especially in the field of inheritance taxes. Although some take the position that any distribution by a trust upon or even after the death of the settlor should be taxed with inheritance tax, the opposite can be argued for certain types of trusts.

Trusts and low-taxed foreign legal entities (including foundations) are, among other things, considered as ‘legal constructions’ for income tax purposes. Belgian resident founders (which is a broadly defined concept) of such a legal construction must report its existence in their annual income tax return.

In addition to this reporting obligation, a look-through approach (commonly referred to as the ‘Cayman tax’) has been introduced in 2015 for these legal constructions: their founders are taxed on any income that has not been paid out or distributed by these legal constructions as if they had directly received that income. Any subsequent payment or distribution by a qualifying legal construction is taxed as a dividend (in principle at a rate of 30%) in the hands of the receiver, unless it can be proven that this payment or distribution makes the capital of the legal construction fall below the capital that was contributed by its founder(s) or that the payment or distribution was taxed before under the look through approach.

Foundations and charities

Are foundations and charities legally recognised in your jurisdiction? If so, what forms can they take?

Unlike trust law, Belgium does have its own legislation regarding foundations. A foreign foundation will be recognised in Belgium and will be governed by the law of the state in which its main establishment is located.

Charities can be organised in the form of a foundation or a not-for-profit association. They must not provide any ‘material benefit’ to their founders or directors, nor to any other person except for the latter if this is precisely (part of) the foundation’s purpose.

What rules and procedures govern the establishment and maintenance of foundations and charities?

Private foundations and international not-for-profit associations must be established through a notarial deed. Belgian not-for-profit associations can be established through a notarial deed or a private agreement. None of these legal entities requires a certain minimum capital.

Current law requires private foundations to have at least three directors. However, this minimum will be abolished as from 1 May 2019 and it will be possible for a private foundation to have only one director.

Belgian not-for-profit associations must have at least three directors, unless there are only two members of the association in which case it can be established and function with only two directors.

How are foundations and charities taxed?

Private foundations and not-for-profit associations are normally subject to legal entities tax on certain categories of their income, such as real estate income and certain capital gains on Belgian real estate, and investment income such as dividends and interests.

Besides this tax, they are also subject to an annual wealth tax of 0.17% on the value of their assets, although some assets are excluded from the tax base.

Compliance issues

Anti-avoidance and anti-abuse provisions

What anti-avoidance and anti-abuse tax provisions apply in the context of private client wealth management?

A general anti-abuse provision aims at countering tax abuse by allowing tax authorities to ignore a (series of) legal acts – and levy taxes accordingly – if the purpose of a tax provision is frustrated and 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 demonstrating sufficient legitimate non-tax motives.

In the field of inheritance tax, attention should also be paid to certain specific anti-abuse ‘fictions’ that can lead to taxation.

Anti-money laundering provisions

What anti-money laundering provisions apply in the context of private client wealth management (eg, beneficial ownership registers)?

Following the implementation of the Fourth EU Anti-money Laundering Directive, Belgium has created a ultimate beneficial owner register in which, among other things, companies that were incorporated in Belgium and Belgian foundations must be registered. The first ultimate beneficial owner registration deadline is 30 September 2019.

Besides this recent development, tax transparency measures based on the Common Reporting Standard and the Foreign Account Tax Compliance Act have been implemented in Belgium. The EU DAC6 Directive will require EU intermediaries – including lawyers, accountants, tax consultants, trustees and banks – to report cross-border arrangements to the local tax authorities. Where no intermediary is required to make a filing, the taxpayer may need to disclose instead. Reporting under DAC6 will be compulsory from 1 July 2020, with a retroactive effect for reportable arrangements since 25 June 2018.

Wills and probate

Succession rules

What rules and restrictions (if any) govern the disposition of and succession to an individual’s property and assets in your jurisdiction?

Subject to some restrictions (eg, with regard to the family dwelling), a person is in principle free to dispose of all or part of their assets during their lifetime or in a last will. However, Belgian inheritance law contains forced heirship rules that need to be considered.

Children and surviving spouses are legally entitled to a minimum share of the estate (the so-called ‘reserved portion’). If these forced heirs do not receive their reserved portion, they can make a claim for reduction.

The reserved portion is calculated as a fraction of the so-called ‘fictitious mass’, being the sum of all net assets of the deceased on the day of their death and all of the gifts that they made during their lifetime. Since 1 September 2018, in case of a successful claim for reduction, forced heirs receive in principle a compensation in value and can no longer claim to receive (part of) the assets themselves, although a donee can offer to pay with (part of) the assets.

Since 1 September 2018, the total reserved portion of all children is half of the fictitious mass. The other half is the ‘disposable share’, of which the testator can dispose freely.

The surviving spouse is entitled to the usufruct on half of the fictitious mass, with as an absolute minimum the usufruct on the family dwelling and its furniture.

Since 1 September 2018, ascendants are no longer forced heirs that can claim a part of the estate. Instead, and only if they are needy at the time of death of the deceased, they can now claim a monthly annuity or an equivalent lump sum that cannot exceed one quarter of the fictitious mass per ascending bloodline.

Legal cohabitants can disinherit each other completely; the surviving legal cohabitant is not a forced heir.

Intestacy

What rules and procedures govern intestacy?

Belgian inheritance law is based on blood relationship and partnership. According to Belgian law, there are four categories of heirs:

  • descendants;
  • parents and brothers and sisters and their descendants;
  • ascendants, including the parents if there are no brothers or sisters; and
  • collaterals, other than brothers and sisters, and their descendants.

Heirs from a closer category exclude the heirs from further categories. Within a category, the persons closest to the deceased exclude the others. In case of a predeceased heir, their descendants will jointly take up their position in the inheritance of the deceased.

If the deceased leaves both descendants and a surviving spouse, the latter inherits the usufruct on the entire estate whilst the descendants inherit the bare ownership. Since 1 September 2018, if there are no descendants but the deceased leaves one or more ascendants, brothers, sisters or descendants of brothers or sisters, then the surviving spouse inherits full ownership of the deceased’s part in any undivided property that was exclusively held by the couple (unless agreed otherwise in a marital contract) and can be entitled to a greater share than the usufruct of any other part of the deceased’s estate depending on the matrimonial regime that applied to the couple. If the deceased only leaves collaterals (other than brothers or sisters and their descendants) or if there are no heirs, the surviving spouse receives the full ownership of the entire estate.

A surviving legally cohabiting partner only inherits the usufruct on the family dwelling and its furniture, so a much more limited right than a surviving spouse.

Since 1 September 2018, the in-principle prohibition to make inheritance agreements on a future succession has been attenuated. Now, but still to a limited extent, it is possible to make such inheritance agreements.

Governing law

What rules and restrictions (if any) apply to the governing law of a will?

According to the EU Succession Regulation (650/2012 of 4 July 2012), by which Belgium is bound, the law applicable to an individual’s succession as a whole is the law of the state in which the deceased had their habitual residence at the time of their death. In a last will, a person may choose for the law of their nationality to govern their succession as a whole, provided that they possess that nationality when they issue the will or at the time of their death.

Formalities

What are the formal and procedural requirements to make a will? Are wills and other estate documents publicly available?

There are three types of will:

  • Public wills are drawn up by one notary in the presence of two witnesses, or by two notaries, and are subject to formal requirements. The testator must dictate the will, which is then fully read by the notary to the testator before it is signed by the testator.
  • International wills are drafted according to the rules set out in the Convention providing a uniform law on the form of an international will (Washington, 26 October 1973). It is less formalistic and consists of both a private document, which the testator declares to be their last will, and a notarial deed. Neither the notary nor the two witnesses know the content of the will.
  • Holographic wills are the least formal. They must be handwritten, dated and signed by the testator.

The existence of a public will or an international will is registered by the notary in a Central Register of Last Wills. A holographic will is registered in this Central Register only if it is voluntarily deposited with a notary. Only the existence of the will is registered, not its content. During their lifetime, only the testator and the notary that made the registration have access to the registered data. After death, anyone can ask the Central Register to confirm whether the deceased had a last will.

Validity and amendment

How can the validity of a will be challenged? Can the will be amended after the decedent’s death?

Challenging the validity of a public will or an international will is extremely difficult since it assumes that the dishonesty or even complicity of the intervening notary should be demonstrated in a court procedure. Challenging a holographic will might seem easier: it can be done by questioning the handwriting or signature of the deceased or by challenging their mental state of mind at the time the will was drawn up.

A will cannot be amended after the decedent’s death.

How is the validity of a will established in your jurisdiction?

There are three types of will:

  • Public wills are drawn up by one notary in the presence of two witnesses, or by two notaries, and are subject to formal requirements. The testator must dictate the will, which is then fully read by the notary to the testator before it is signed by the testator.
  • International wills are drafted according to the rules set out in the Convention providing a uniform law on the form of an international will (Washington, 26 October 1973). It is less formalistic and consists of both a private document, which the testator declares to be their last will, and a notarial deed. Neither the notary nor the two witnesses know the content of the will.
  • Holographic wills are the least formal. They must be handwritten, dated and signed by the testator. 

To what extent are foreign wills recognised? Do any special rules and procedures apply to establishing their validity in your jurisdiction?

Since Belgium is a party to the Hague Convention on the Conflicts of Laws Relating to the Form of Testamentary Dispositions, a valid choice as to the applicable law of an individual’s succession will also sort effect as to the form of the last will, hence should be recognised in Belgium (see Article 75 Section 1 of the EU Inheritance Regulation).

In a European context, a European certificate of succession (based on the European Inheritance Regulation) might be useful to execute a foreign will in Belgium.

Estate administration What rules and procedures govern:

(a) The appointment of estate administrators?

The heirs automatically obtain possession of all assets, rights and claims of the deceased, subject to the obligation to pay all debts of the estate (so-called ‘saisine’). Transmission of the estate is therefore not subject to an administrative procedure (no probate).

If a testamentary executor is appointed in a will, they must ensure that the wishes of the deceased are executed. However, their rights are limited; in principle, they do not have saisine and can neither liquidate nor divide the estate.

(b) Consolidation and administration of the estate?

The heirs automatically obtain possession of all assets, rights and claims of the deceased, subject to the obligation to pay all debts of the estate (so-called ‘saisine’). Transmission of the estate is therefore not subject to an administrative procedure (no probate).

If a testamentary executor is appointed in a will, they must ensure that the wishes of the deceased are executed. However, their rights are limited; in principle, they do not have saisine and can neither liquidate nor divide the estate.

(c) Distribution of the estate to heirs?

The heirs automatically obtain possession of all assets, rights and claims of the deceased, subject to the obligation to pay all debts of the estate (so-called ‘saisine’). Transmission of the estate is therefore not subject to an administrative procedure (no probate).

(d) Settlement of the decedent’s debts and payment of any taxes and fees?

The heirs automatically obtain possession of all assets, rights and claims of the deceased, subject to the obligation to pay all debts of the estate (so-called ‘saisine’). Transmission of the estate is therefore not subject to an administrative procedure (no probate).

Planning considerations

Are there any special considerations specific to your jurisdiction that individuals should bear in mind during succession planning?

In recent years, both the legislature and the tax authorities have shown an increased interest in the tax benefits to which a succession planning may lead. Several legal initiatives and positions have been taken to tackle tax benefits that were considered as exaggerated, leading to a stricter framework to exploit succession planning opportunities.

Capacity and power of attorney

Loss of capacity

What rules, restrictions and procedures govern the management of an individual’s affairs where he or she loses capacity and the grant of power of attorney in such cases?

In a so-called ‘living will’, individuals can anticipate potential legal incapacity by making extrajudicial protection arrangements. These arrangements can deal with personal matters (eg, health matters) or the administration of property. By giving a power of attorney while still capable, individuals can avoid a court-appointed administrator.

Minors

What rules, restrictions and procedures govern the holding and management of a minor’s assets until the minor reaches the age of capacity?

In principle, parents jointly exercise the parental authority over their minor children. In relation to third parties, it is assumed that each parent acts with the consent of the other parent when managing the minor’s assets. To some exceptions, the parents are also legally entitled to the usufruct of the minor’s assets, but any income of these assets must be used with priority for the minor child’s needs and education.

For important acts, such as the sale of a minor’s asset, parents need prior court approval.

Family links

Marriage and civil partnerships

What matrimonial property regimes are recognised in your jurisdiction?

In the absence of a marital contract, the statutory matrimonial property regime applies, which is a regime of separation of property with a community of marital gains. It implies that in principle all income and assets the spouses acquire during their marriage is common property. Only premarital assets, donations or bequests (even received during the marriage), strictly personal goods and some specific assets belong to the exclusive property of the spouses.

A new law on matrimonial property regimes entered into force on 1 September 2018 and has clarified and refined several provisions of the statutory matrimonial property regime with respect to, among other things, professional goods and individual life insurances.

In a marital contract, spouses can make other arrangements:

  • Spouses can adopt a regime of full separation of property, under which all income and assets belong to one spouse. Assets acquired by both spouses and assets that neither spouse can prove to be their own, will be joint property. From 1 September 2018 this regime has been upgraded in order to enhance matrimonial solidarity (eg, by offering the possibility to opt for a statutory regime on the division of assets acquired during marriage when one of the spouses passes away or in case of divorce).
  • Spouses can adopt a regime of full community property, under which all income and assets (including premarital assets) of the spouses belong to the community property. In this case, spouses do not have exclusive property.

When a married person passes away, the matrimonial property regime is settled and distributed in order to determine the composition of the estate. The estate is composed of the deceased’s exclusive property (if any) and in principle half of the community or joint property (if any).

Legal cohabitants do not have a community property. Assets acquired by both cohabitants and assets that neither of them can prove to be their own are considered joint property.

Are same-sex marriages and/or civil partnerships recognised in your jurisdiction?

Yes. Belgium has among the most progressive lesbian, gay, bisexual and transgender (LGBT) rights in the world. Same-sex marriages were legalised in 2003 and parenthood was opened up for LGBT individuals in 2006.

Children

Is there a legal distinction between legitimate and illegitimate children in terms of estate and succession planning?

No.

Is there a legal distinction between natural and adopted children in terms of estate and succession planning?

There are two types of adoption under Belgian law:

  • the ‘simple’ adoption of a minor or a person who has come of age; and
  • the ‘full’ adoption of a minor child.

A fully adopted child inherits from its entire adoption family like a natural child. It can no longer inherit in its biological family.

In case of a simple adoption, the adopted child inherits from its adoption parents like a natural child that is born within the marriage, but it has no inheritance rights towards other adoption family members. However, it does not lose its inheritance rights in its biological family, so it can inherit in both families.