Inheritance Taxes in Belgium

Find out about inheritance tax implications for a foreigner and their family resident in Belgium...

Belgian inheritance tax rules follow the inheritance rules. Inheritance tax is due on everything one inherits by law or by will from the estate of the deceased.

Inheritance tax is due on the value of the entire estate of a deceased person who was domiciled in Belgium. If the deceased was not domiciled in Belgium at the time of his death, inheritance tax still applies, but only to the real estate the person owned in Belgium. The criterion of domicile is the same as for the application of the Belgian inheritance rules.

However, officials of the European Communities, the European Investment Bank, NATO, the Western European Union, etc. who live in Belgium to carry out their duties are exempt from Belgian inheritance tax (except for their Belgian real property) as they are considered to die while on duty.

The value of the estate

Inheritance tax is levied on the net value of the estate of the deceased. However, the tax is paid by each of the heirs separately for his or her share.

There are some (anti-avoidance) rules that increase the value of the estate:

  • Certain assets and rights, which are acquired as a consequence of the death of the deceased, must be included in the value of the estate, and the beneficiary is taxed on these
  • Gifts in the marriage contract that grant the surviving spouse more than half the community property are liable to inheritance tax for everything over that half
  • Lifetime gifts made less than three years before the time of death are subject to inheritance tax, unless they have been subject to gift tax in the past
  • Any rights granted to a third party under a life insurance contract are liable to inheritance tax, except for statutory insurance schemes or group insurance schemes (employee pension schemes) are taxable
  • Any scheme under which a third party had full property rights on an asset, but in which the deceased had a life interest are considered to be a gift in disguise, and are added to the value of the estate, unless the beneficiary proves that it was not a disguised gift

Rates of inheritance tax

Within Belgium, the inheritance tax is paid to the regions - Brussels, Flanders and Wallonia. The regions set their own rates and the rates that apply depend on the region where the deceased was a tax resident for most of the last five years before death. Different rates apply depending on the heir's relationship with the deceased, such as relative, spouse or other.

Information on current inheritance tax rates for the different regions can be found on the following websites:

Transfers of family businesses and companies

These follow different rules, depending on the region where the deceased person was domiciled. Points to note are:

  • In Flanders, the shares of a company or family business (or the assets of such a family business) located in the European Union may be exempt from Flemish gift tax if:
    • the deceased held at least 50% of the shares with his direct family
    • the company has a real economic activity and is not just a holding company or a company that holds assets
  • If the shares are inherited by descendants or a spouse or registered partner, inheritance tax is due at a fixed rate of 3 % (7 % for anyone else)
  • Brussels has a flat inheritance tax rate of 3% on any transfers of the assets of a family business or the shares of a family company, if the company meets certain conditions of employment, investment and minimum share-holding
  • Wallonia has 0% and 3% inheritance tax rates for the transfer of a family business

Double taxation

Because Belgian inheritance law applies to all the assets of a deceased person domiciled in Belgium, double taxation can be an issue. As a rule Belgium does not grant any relief for double taxation, except for inheritance tax paid abroad for overseas real estate property. This inheritance tax can be offset against the inheritance tax due in Belgium. Any other capital taxes paid abroad can only be offset against the net value of the assets as a liability of the estate.

Belgium has signed double taxation treaties relating to inheritance tax with France and Sweden. Other double taxation treaties that Belgium has signed with most European countries relate only to income tax and not inheritance tax.

Inheritance tax return

When a person dies in Belgium, all heirs must file an inheritance tax return (aangifte van nalatenschap/d├ęclaration de succession) which gives an account of all details to do with the succession. The heirs may make the declaration themselves but, as it is often complex, they can ask a specialist such as a notary to help. They may each make individual declarations or make one joint declaration.

They should make the declaration at the relevant registry office (registratiekantoor/bureau de l'enregistrement) at the municipality in which the person lived or, if he lived outside Belgium, where his Belgian real estate was.

An heir who has rejected the estate has no obligation to file an inheritance tax return but has to make a formal request to the relevant registry office not to file the return. In effect this is still an inheritance tax return.

The time limits for filing the inheritance tax return are:

  • If the person died in Belgium - four months from the date of death
  • If the person died in another country in Europe - five months from the date of death
  • If the person died outside Europe - six months from the date of death

An extension is possible in certain circumstances. Once the time limit has passed, the heirs cannot change the valuation of the assets or debts of the estate, except in legally defined circumstances. Within the time limit, a supplementary declaration is allowed, for property not mentioned in the main declaration.

Further Information

Prepared by Marc Quaghebeur, International Tax Lawyer, De Broeck Van Laere & Partners, Rue Jules Besme 124, 1081 Brussels Tel: 02 423 00 42, Fax: 02 423 00 32 Author of the book "Rest in Peace. A Guide to Wills and Inheritance Tax in Belgium".