Asset transfer

Yes, with a gift, you can insert several clauses so you can maintain control and/or income.

Optionally, establishing a control vehicle (partnership or foundation) may be desirable. In this case, you retain control, and the children only become full owners after your death.

When donating real estate, a notarized deed is always required.

For movable property, a hand or bank donation can be made. In this case no gift tax is due, but the donor must remain alive for 3 (Brussels) or 5 (Flanders or Wallonia) years after the gift. Some procedural rules must be followed correctly.

Inheritance tax is determined based on where you have lived the longest in the last five years. Thus, moving has no immediate effect on inheritance tax.

This depends on whether or not the gift was registered;

• With an unregistered donation (not a notarized donation), in principle no gift tax is due. However, the donor must remain alive for five years (Flanders or Wallonia) after the donation, otherwise you must pay inheritance tax.
• If the donation is made through a notarial deed or you register an indirect donation through the Flemish Tax Administration, you will have to pay 3% gift tax in the case of a gift in direct line or between partners. The advantage of this is that the five-year term (Flanders or Wallonia) expires and you therefore do not risk a high inheritance tax.

When donating a family company or sole proprietorship, a favorable 0% gift tax rate applies in Flanders under certain conditions:

• At least 50% of the voting rights must be held by one family (or 30% and together with another family 70%, or 30% and together with 2 other families 90%).
• For 3 years after the gift, certain conditions must be met.

Yes, there are several ways to donate while retaining income.

In a gift subject to usufruct, for example, you donate an income property (such as an apartment or investment portfolio), but retain the usufruct. That means you may continue to use the property or collect the income (such as rent or dividends) for as long as you live. In this case, the donee receives bare property.

Another possibility is to impose a burden with the gift. For example, this could be an obligation on the donee to pay you a lifetime interest or assume certain expenses (such as health care costs). You can also attach conditions to the gift, such as the right to continue living in the property.

However, these charges or conditions must be clearly stated in the gift deed.

In Flanders, gift tax rates are significantly lower than inheritance tax rates, which can be as high as 27%.

By transferring part of your assets now, you also support your children or family members when they really need it, for example, when buying their first home or starting a business.