Private Client news
Greenille by Laga Newsflashes
Overview of the latest Private Client news
Legislator closes Cayman Tax Loopholes
11 December 2017
The Cayman Tax, introduced in 2015, is essentially a look-through tax applicable to Belgian Personal Income Tax (“PIT”) and Belgian Legal Entities Tax (“LET”). It targets income generated by qualifying legal arrangements, by attributing it to and taxing it in the hands of the founder or third-party beneficiary of such an arrangement, as if the latter had received this income directly. Next to this transparent approach, the Cayman Tax also aims at taxing liquidations of legal arrangements and certain transfers of (part of) the assets (for legal arrangements with legal personality, so-called ‘Type 2 arrangements’, as opposed to the Type 1 legal arrangements lacking legal personality). Apart from the effective taxation, there is (since 2013) also an obligation for founders and third-party beneficiaries of legal arrangements to report the existence of the legal arrangement in their annual tax return. The Cayman Tax was amended for the first time at the end of 2015 (see previous newsflash coverage).
Inheritance tax: flat tax regime would be much fairer
6 December 2017
Greenille by Laga Partner Alain Laurent Verbeke has written an opinion, published by De Tijd, regarding the inheritance tax regime.
In his published opinion, Alain Laurent argues that a flat tax does not force people to donate (for fiscal purposes), rewards transparency and allows society to gain its fair share without subjecting spouses and children to stifling taxation after inheritance.
Be prepared for the new inheritance law
29 November 2017
A new heritage guide (Erfenisgids/Guide Successions) was published as a supplement to the De Tijd and L'Echo issue of 25 November 2017. Alain Laurent Verbeke and Hélène Casman contributed to the guide regarding donations under the scope of the new law. Alain Laurent and Hélène were part of the expert group that helped Minister Koen Geens draft the new inheritance law.
The new inheritance law: 3 questions
23 November 2017
The De Tijd newspaper asked Greenille by Laga Partner Alain Laurent Verbeke three key questions around the new inheritance law. Alain Laurent was part of the expert group set up by Minister Koen Geens in drafting the new law. The questions focus on the reduced forced heirship share and the introduction in Belgium of ‘pactes successoraux’.
ECJ issues very first decision on the European Succession Regulation (Kubicka case, C-218/16)
16 November 2017
The European Court of Justice ruled that a ‘vindicationslegaat’ should be accepted and executed in Germany without further formalities. Germany cannot convert the ‘vindicationslegaat’ into a ‘damnationslegaat’.
Inheritance tax on participation clauses
13 October 2017
The participation clause is a very common clause in marital contracts of property distribution. It allows participation in the assets regardless of the assets' principal separation. A new pre-draft law by the Flemish Government introduces inheritance tax on these clauses. In Greenille by Laga's opinion, the Flemish Government introduces a discrimination against spouses married under the default regime.
Read more of Greenille by Laga's view.
Belgium implements the fourth anti-money laundering Directive - including UBO-register
10 October 2017
On 6 October 2017, a new law on anti-money laundering, counter terrorism financing and the use of cash was published in the Official Journal. The law transposes the fourth Directive on anti-money laundering (‘AML 4’) and the updated recommendations of the Financial Action Group into national law, while replacing the previous law of 1993 on anti-money laundering.
The most important change is the creation of a national Ultimate Beneficial Owner register (‘UBO-register’). Belgian companies and other legal entities must collect the necessary information on their beneficial owner(s), which is recorded in the UBO-register.
New inheritance law from 1 September 2018: Should you make a declaration to maintain the old rules?
12 September 2017
The new inheritance law is effective September 2018 and also applies to donations before the law's entry into force. However one can opt for the old rules within the year. This choice has to be made before September 2018. Should one opt out or not?
End of double taxation on French-source dividends for private investors
9 August 2017
During recent years, the Belgian government has been increasing taxes on private investments and the income they generate. The default tax rate for dividend income has increased from 25 to 30%. The scope of the stock exchange tax has been broadened, the rates and maximum amounts of the stock exchange tax were increased several times. More recently, the government announced the introduction of a new tax on securities accounts of individuals residing in Belgium (see the newsflash on the Budget 2018 agreement).
Budget Agreement 2018 – Impact for High Net Worth Individuals and Families
3 August 2017
As you may have read in the press, the so-called Summer Agreement reached by the Federal Government last week, includes a number of tax measures potentially impacting high net worth individuals and families. Please find below an overview of these measures. For the measures put forward by the Corporate Tax Reform Agreement, reference is made to Deloitte’s Tax Reforms Hub.
New position of the Flemish Tax Administration regarding civil partnerships
15 May 2017
On 26 April 2017, the Flemish Tax Administration (Vlabel) published its new (additional) position regarding civil partnerships and the issue of split-registrations (usufruct – bare ownership). This position will enter into force on 1 June 2017 and applies to situations where parts in a civil partnership - in which securities and cash investments are held - are donated with reservation of usufruct (for example to the children).
Before 1 June 2017, the income of the civil partnership (i.e. dividends and interest) that is not distributed to the usufruct holder but is instead incorporated in the capital or reserved, is regarded as a gift. If no gift tax is paid, this income is taxable under Belgian inheritance tax if the usufruct holder passes away within 3 years after the donation.
As of 1 June 2017, Belgian inheritance tax is also due after this 3 year period if no Belgian gift tax was paid upon the split-registration.
There are however certain options to avoid this new Vlabel-position.
Ruling Commission’s Board temporarily not operational
5 May 2017
As covered by the press on the morning of 5 May 2017, the Ruling Commission’s Board is not operational until further notice.
This is due to a decision by the Council of State dd. 28 April 2017 annulling the appointment of the three French-speaking Board members, Matthieu Bataille, Serge Riga and Véronique Tai. This decision was triggered by an appeal introduced by José Vilain, a former member of the Board. This decision does not affect the appointment of the 3 Dutch-speaking Board members, Steven Vanden Berghe, Guy Giroulle and Luc Saliën.
Flemish Tax Administration targets donation of bare property
14 April 2016
Recently, the Flemish tax administration has published a new position based on which Flemish inheritance tax will apply to all tax free donations of securities or cash investments made with reservation of usufruct since 1 September 2013.