Donations before a foreign notary public no longer exempt from tax

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In Belgium, donation tax is only payable on donations of movable goods that are registered in Belgium. For instance, donations of shares or an investment portfolio before a Dutch notary public are not subject to donation tax. One condition is that the donor lives for three years – seven years in case of shares of a family-owned company – as from the date of the donation.  However, a recent bill puts a stop to this well-known possibility to make donations exempt from tax.  

 

 

Current system

 

The reason why a donation before a Dutch notary public is not subject to donation tax is that a deed executed before a notary public in the Netherlands is not subject to any registration obligation. Such a deed must not be presented to a registry office, neither in Belgium nor in the Netherlands, to that no donation tax is payable at the time of the donation.  

 

Unless the donors die within three years following the donation, the goods donated are not subject to inheritance tax, either, and it is therefore possible to pass on property to the next generation entirely exempt from tax.  

 

This type of donation is only possible for movable property like shares and investments portfolios and not for immovable property, as deeds relating to the donation of immovable property must be registered. 

 

 

Bill

 

The purpose of the bill is to impose the obligation for registration also on all deeds relating to the donation of movable property in the future.  This registration obligation is intended to apply to all deed relating to donations, regardless of whether the donation relates to the full ownership or to the usufruct only and irrespective of the country in which the donation takes place.  This means that a manual of bank donation is still possible, as a notarial deed is not required for this type of donation. 

 

Donations of shares and investment portfolios, however, always require a notarial deed, so they would no longer be exempt from tax. 

 

We have to point out that for the time being, this is only a bill that has not yet been adopted and that this obligation is therefore not yet provided for by law.  Nevertheless, it is advisable not to take any chances and, if you intend to make a donation before a Dutch notary public, not to wait too long and make an appointment for the execution of the deed now.  We will closely monitor the further evolution and will keep you informed. 

 

Our expert in the field of government aid is also at your service for any questions you may have about this aid. ou can contact us by phone at 051 26 82 68  or by sending an e-mail to info@titeca.be.