The impact of capital gains tax on partnerships: question and answer

As of Jan. 1, 2026, a new capital gains tax on financial assets will apply in Belgium. For those who have placed their assets in a partnership, this raises numerous questions.

The finance minister has now provided more clarity. The rules are complex, so it is important that you stay well informed. In this article, we list the main points of interest.

Recap: what is capital gains tax?

Also read: Agreement on capital gains tax: an overview of the new ground rules

From Jan. 1, 2026, a general capital gains tax will be introduced on capital gains which are realized at the sale of financial assets. Until 2025, such capital gains could still be realized tax-free.

The capital gains tax is a personal income tax and applies only to natural persons. Also, legal structures with tax transparency, such as the civil partnership, fall under this tax.

The fee in most cases is 10% on realized capital gains, with a annual exemption from €10,000 per person.

Is my partnership also subject to capital gains tax?

Yes. A partnership has no legal personality and is fiscally transparent. This means that all income generated by a partnership from a tax perspective is allocated to the underlying partners in proportion to their share in the partnership.

What if the partnership sells shares or securities?

Does a partnership hold securities and upon their sale realize a added value, then that capital gain will be allocated to the underlying partners be allocated. This can be advantageous, especially in function of utilizing the €10,000 exempt tranche.

Example:

• Jan and Nancy have a portfolio in a partnership and have gifted the partnership shares to their three children.
• If the partnership makes transactions during the year that result in a total capital gain of €45,000, that capital gain is allocated to each of the children for €15,000.
• Each child can use its €10,000 exempt bracket, leaving €5,000 taxable with each.

Are partnership shares themselves financial assets?

Yes, even if the partnership owns only non-financial assets, the shares are considered financial assets, according to the minister.

This is an important but little-known and, above all, highly debatable point: even if a partnership holds only art or other non-financial assets, the shares of the partnership itself considered financial assets.

Thus, a sale of those shares is always subject to capital gains tax. There is at this point NO fiscal transparency, despite the fact that a partnership is an unincorporated corporation and is, by definition, tax transparent.

In our opinion, a number of fundamental principles trampled on. We hope that this will still be corrected.

What when forming or contributing to a partnership?

The contribution of shares to an unincorporated partnership is exempt provided there is no transfer for consideration at that time. No capital gains tax will therefore be payable at the time of the contribution of the shares. However, the original acquisition value of the shares will be retained.

Please note that when contributing other financial assets (such as bonds), a taxable moment may indeed arise because the contribution can be considered a partial disposition.

What at the dissolution of the partnership?

The dissolution itself falls not under capital gains tax, as long as the assets are allocated to the partners in undivided proportion to their units.

But after that, it becomes watchful: the distribution of those assets between the partners does fall under capital gains tax. This applies even if no de facto (economic-financial) capital gain is realized.

Example:

• Child 1 and Child 2 jointly own a €1,000 investment portfolio.
• The moment the portfolio is distributed and Child 1 receives €500 of the portfolio and Child 2 also receives €500, this is considered a distribution that gives rise to capital gains tax.
• While this may be a legal-technical distribution, economically and financially no capital gain is realized, so the question arises as to the fairness of taxing this ‘capital gain.

The same logic is followed for an out-of-division retirement (see below).

What if a partner leaves the partnership?

An associate's exit is treated for tax purposes as equivalent to a EXCEPTION, which is taxable.

Moreover, there is the threat of a double taxation:

When the partnership sells investments to free up liquidity to finance the exit, all partners pay capital gains tax through tax transparency. Subsequently, the exiting partner exits and capital gains tax is again payable on their behalf. Double charge is thus not out of the question.

This is a concrete risk about which it is best to seek advice in advance.

What in the case of a gift with encumbrance?

As in gift and inheritance tax, an excessive burden, such as an obligation to pay an interest or a fixed amount, can cause the transfer to be no longer qualifies as a gift. If it becomes a transaction ‘for consideration,’ then capital gains tax may apply.

So be careful for gifts where conditions are attached to the transfer. The line between a gift and an encumbering transfer can potentially be crossed here.

What does this mean for my estate planning?

The new capital gains tax has concrete consequences for those who manage or plan to transfer their assets through a partnership. Some points of interest:

• Stepping out of disunity (outside of divorce or inheritance) is taxable. Also, an ordinary split of a donated portfolio between children.
• The dissolution of a partnership itself is not taxable, but the distribution after it is.
• Exit of an associate may lead to double taxation.
• Gifts with charges may be reclassified as onerous operations.