Inheritance tax
Caravaggio, Jesus and The tax collector ( afterwards Mattheus)
1. The inheritance tax, formerly the succession tax, is a tax on inheritance. This matter is no longer a federal competence but has been (fully) regulated at regional level by the regions since 01/01/2015. The tax is calculated on what each heir, legatee or donee obtains from the estate. They will declare this through the declaration of inheritance tax.
The inheritance tax can count on a lot of resistance from the population. It is also often the subject of political discussions and the topic of election manifestos.
Whatever one might think of it, sooner or later everyone will have to deal with it and then the following rules (for the time being) will apply:
- Declaration of inheritance tax
- Who has to declare?
2. The declaration can be made by all heirs together or by each heir individually .
The heir who rejects the estate is deemed never to have been an heir and will therefore not be liable to inheritance tax.
But also the general legatees and general beneficiaries, who have not rejected the estate, are obliged to make a declaration.
3. When?
To this end, an inheritance tax return must be submitted within 4 months of the death. You can download it on the following site :https://belastingen.vlaanderen.be/de-aangifte-van-nalat properties
If the testator died in another country of the European Economic Area, this period is 5 months. In the event of a death outside the EEA, the term is extended to 6 months.
If necessary, postponement of submission can be requested. Please note, despite the deferral permission, a tax increase will still be due.
Time of submission after expiry of the declaration period tax increase in % of the inheritance tax
From Until the last day of to be paid
- day 1 month 5 1
- month 6 month 11 5
- month 12 month 17 7,5
- month 18 10
However, it is still appropriate to request a postponement. The fact is that if filing late without permission for postponement, the tax increase that is due will amount to more.
Time of submission after expiry of the declaration period tax increase in % of the inheritance tax
From Until the last day of to be paid
- day 1 month 5 5
- month 6 month 11 10
- month 12 month 17 15
- month 18 20
4. What do you have to declare?
In the tax return, you will have to state all actives and passives that are in the estate (in the case of a joint declaration) or that you acquired following the death (individual declaration). The nature or location of the ( movable) goods is unimportant.
Certain actions taken by the testator during his lifetime may give rise to the payment of an inheritance tax. The most well-known is, of course, the donation of movable property by the testator within three years before his death (insofar as the donation was not subject to the proportional registration duty, ie hand donation, bank donation, indirect donations). Life insurance policies with a death benefit can also give rise to inheritance tax (especially when the insurance was used as an investment).
5. S ome presumptions regarding inheritance law and inheritance tax.
Some examples. What is stated in the estate declaration can be used as an extrajudicial confession in accordance with cassation case law.
A so-called sale can be seen as a donation in disguise, and may qualify for distribution.
For example, a sale of an asset on an annuity or subject to usufruct is regarded as a gift, unless the other heirs agree.
Then there are tax suspicions. Donation subject to usufruct, for example, leads to tax on the entire property.
The Flemish Tax Administration (Vlabel) also turned out to be stricter than the Belgian tax authorities. Fortunately, the Council of State (judgment no. 241,761 of 12 June 2018) has recently scaled back this strict “interpretation”. ((e.g. split purchases of goods (usufruct by the parent, bare ownership by the child) are accepted back if the bare owner previously had the financing (even when this was the result of a donation, even without registration)).
6. Estimation
You will not only have to declare the active and the passive, but you will also have to estimate them. It is important to do the valuation truthfully and to take into account the correct valuation point (date of death or subsequent event). If the value is too high, the heir will always pay too much inheritance tax, while if the value is too low, the heir runs the risk of having to pay a fine.
You can possibly call on a recognized estimator expert to determine the value. He then draws up an estimate report which is binding.
Regarding debts, one can choose to either include a lump sum or prove actual debts and funeral expenses. It is also possible to prove the debts of the deceased and only opt for the lump sum for the funeral expenses or vice versa. The actual costs must always be stated for specific real estate debts.
Year of death lump sum for debts Lump sum for community debts lump sum for funeral
Expenses
2015 1.500,00 EUR 3.000,00 EUR 6.000,00 EUR
2016 1.508,37 EUR 3.016,74 EUR 6.033,49EUR
2017 1.538,10 EUR 3.076,20 EUR 6.152,40 EUR
2018 1.570,80 EUR 3.141,60 EUR 6.283,20 EUR
7. Where is the declaration made?
The tax return is submitted to the office competent for the last tax residence of the deceased, if this tax residence was established in the same region for the past 5 years. If this is not the case, the declaration will be made to the office competent for the last tax residence in the region where the deceased's tax residence was longest established.
There are model documents that you can download from Vlabel : https://belastingen.vlaanderen.be/erfbelasting
8. Tariff
After the declaration, the assessment will follow.
When determining the inheritance tax due, a number of categories are distinguished, depending on the degree of relationship with the deceased. Different rates apply for each of these categories.
The applicable rate is that in effect on the day of death.
These rates were changed in September 2018, for the sake of completeness these new rates are already mentioned now (see the red heading).
Rate in a straight line and between partners :
Per tranche in EURO Rate in percentage
from up to and including
0,01 50.000 3/3
50.000,01 250.000 9/9
250.000,01 27/27
Rate between brothers and sisters en other persons:
Per tranche in EURO Rate in percentage
From Up to and including Between brothers Between other persons
and sisters
0,01 75.000 30/25 45/25
75.000,01 125.000 55/30 55/45
125.000,01 65/55 65/55
The tax authorities allow reductions in the following cases:
Reduced rate for legates to charities, governments, etc.;
Reduced rate for transfers of family businesses and companies;
Reduction for children under 21 years old;
Reduction for real estate abroad;
Reduction for consecutive transfers within the year.
And in certain cases an exemption can be obtained, it concerns the following situations or goods:
"Abatement" for disabled persons;
Exemption for forests;
Exemption for the family home;
Exemption from social rights in companies established for the realization and / or financing of investment programs for service flats;