Belgian Inheritance and Gift Tax: Regional Rules Explained

Overview of Belgian Inheritance and Gift Tax

Unlike most other Belgian taxes, inheritance and gift taxes are administered at the regional level. This means that the rates, exemptions, and procedural rules differ significantly depending on whether the deceased or donor was resident in Flanders, Wallonia, or the Brussels-Capital Region.

Inheritance tax (erfbelasting / droits de succession) is levied on the transfer of assets upon death, while gift tax (schenkbelasting / droits de donation) applies to lifetime transfers of property. Both taxes are calculated on the value of the assets transferred and are subject to progressive rate schedules.

Regional Competence and Applicable Law

Which region’s rules apply depends on the location of the deceased’s or donor’s fiscal residence at the time of death or gift. For real estate, the tax is determined by the location of the property itself, not the residence of the parties.

This regional structure creates planning opportunities but also complexities, particularly for families with assets in multiple regions or cross-border estates. Understanding which rules apply is the critical first step in any estate or gift planning exercise.

Inheritance Tax: How It Works

When someone dies, their estate is subject to inheritance tax before assets are distributed to heirs. The tax is calculated on the net value of the estate (after deducting debts and funeral expenses) and is typically the responsibility of the heirs to pay.

The rate applied depends on two key factors: the relationship between the deceased and the heir, and the value of the inheritance received. Close family members (such as spouses, children, and sometimes parents) generally benefit from lower rates and higher exemptions than distant relatives or unrelated beneficiaries.

Each region applies its own progressive rate schedule. For example, inheritances between spouses or direct descendants are often subject to more favorable treatment than inheritances to siblings, nieces, nephews, or unrelated parties.

Gift Tax: Lifetime Transfers

Gift tax applies to the voluntary transfer of assets during the donor’s lifetime. In some regions, certain types of gifts (particularly those made via a notarial deed) are subject to lower rates than inheritance tax, creating an incentive for lifetime planning.

However, not all gifts are taxed. Some regions provide exemptions for small gifts, gifts of cash up to certain amounts, and gifts made under specific conditions. The tax treatment of gifts also varies depending on whether the gift is made by notarial deed (registered gift) or by hand (manual gift).

Manual gifts, such as cash transfers or the transfer of movable property without formal documentation, may escape immediate taxation but can be brought into the estate for tax purposes if the donor dies within a certain period.

Exemptions and Reliefs

Each region offers exemptions and reliefs designed to reduce the tax burden on certain types of transfers. Common exemptions include:

• Spouse and partner exemptions: In most regions, transfers to a surviving spouse or legal cohabitant benefit from substantial exemptions or reduced rates.
• Family home exemptions: Inheritance of the family home may qualify for reduced rates or exemptions if the heir continues to reside in the property.
• Business succession reliefs: Special provisions may apply to the transfer of family businesses or agricultural assets to encourage continuity.

The specific thresholds, conditions, and available reliefs vary by region and are subject to frequent legislative updates.

Valuation of Assets

Inheritance and gift tax are calculated based on the fair market value of the assets transferred. Real estate is typically valued according to cadastral values or recent sale prices, while movable assets (such as shares, bank accounts, and personal property) are valued at their market value at the time of transfer.

Valuation disputes can arise, particularly for unlisted shares, art, or unique assets. In such cases, taxpayers may need to provide independent appraisals or accept valuations proposed by the tax authorities.

Filing and Payment

Heirs or donees are typically required to file a declaration with the regional tax authorities within a specified period after the death or gift. The tax must be paid within a set deadline, though payment plans may be available in cases of hardship or where the estate consists primarily of illiquid assets.

Failure to file or pay on time can result in penalties and interest. In inheritance cases, the notary handling the estate usually assists with the filing process.

Estate Planning Strategies

Given the progressive nature of inheritance and gift taxes, careful planning can significantly reduce the overall tax burden on a family’s wealth transfer. Common strategies include:

• Making lifetime gifts to take advantage of lower gift tax rates or exemptions
• Structuring ownership of assets (such as placing real estate in specific regions or using holding companies)
• Using tax-efficient vehicles like family foundations or trusts, where permitted
• Planning the timing of gifts to benefit from regional differences or legislative changes

Estate planning should always be undertaken with professional advice, as the rules are complex and the tax consequences of missteps can be severe.

How Auryth Helps

Navigating the regional patchwork of inheritance and gift tax rules requires access to current, reliable information on rates, exemptions, and procedural requirements. Auryth provides estate planners, notaries, and families with comprehensive, region-specific guidance on Belgian succession taxation.

Whether you’re planning an estate, advising on a cross-border succession, or filing an inheritance tax return, Auryth ensures you have the authoritative resources you need to achieve compliant, tax-efficient outcomes.

This guide is for informational purposes only and does not constitute legal or tax advice. Always consult a qualified tax advisor for matters specific to your situation.