Private Client news
Greenille by Laga Newsflashes
Overview of the latest Private Client news
Exit participation clause in the Flanders region (bis)
8 August 2019
In the Flanders Region, a participation clause (in a marital contract of assets separation) has been subject to inheritance since 24 December 2017. In its decision of 10 July 2019, the Constitutional Court upholds the constitutional validity of the inheritance tax consequences of a final participation clause in the Flemish Region.
Belgian UBO register: ‘Foundation administration office’ FAQ published
24 July 2019
The treasury recently published a brand new FAQ (NL – FR) regarding UBO register procedures when a Foundation administration office (‘Stichting Administratiekantoor’ | ‘Fondation bureau d'administration’) is involved. The FAQ offers answers to practical questions, details how to determine the ultimate beneficiary owners (UBOs), and addresses privacy concerns. With this FAQ, the treasury finds a balance between the international call for transparency on the one hand and the requests from families to respect certain private aspects of their planning on the other hand. At the same time, the Treasury applies the current Anti Money Laundering Directive, its Belgian legal implementation and respects the (sometimes difficult) differences in the application of these rules to companies, other entities, and companies held through other entities.
The family council
17 July 2019
Enterprising families struggle to keep every member aligned regarding day-to-day affairs, as well as major strategic decisions concerning the private, business and wealth spheres. A family council could be the platform to keep everyone on the same page. However, how do you design, implement and maintain a family council that meets the specific needs of every family member? In this article, Greenille by Laga provides a blueprint for enterprising families and their advisors to make the family council work for them.
EU Succession Regulation and habitual residence
20 June 2019
The Regulation employs the notion of “habitual residence” of the deceased at time of death as a general connecting factor to determine both jurisdiction and applicable law. On 29 May 2019, the French “Cour de Cassation” ruled on the notion of “habitual residence” in a succession with cross-border implications.
The time has come for enterprising families to embrace the notion of ‘sustainable shareholdership’, especially in times of succession
24 May 2019
Enterprising families too often end up conflicted in times of succession. This can often be explained by the fact that succession is defined too narrowly, focusing solely on ‘who gets to be the new CEO of the family business’. In order to deal with succession in a smooth way, Greenille by Laga offers enterprising families a unique matrix to plot family roles to open up the scope of succession and embrace diversity in talent and ambition.
What can sushi teach us about family business succession?
8 April 2019
‘Jiro Dreams of Sushi’—a documentary that aired in 2011—portrays the life of the 85-year old sushi master Jiro Ono and his two sons.
Below the surface of the only sushi restaurant in the world awarded with three Michelin stars, one finds more universal challenges that every family business faces.
In this article we use valuable insights from ‘Jiro Dreams of Sushi’ to formulate questions for family business owners and advisors towards a more unified perspective on ‘sustainable shareholdership’
Belgium’s UBO register: updated FAQ published
5 April 2019
The long awaited update to the UBO FAQ is available on the Treasury’s website since 2 April 2019 (Dutch | French). In addition to the FAQ, the user manual for legal representatives of non-profit associations and foundations has also been updated.
This update also provides some details on more complex issues, which remained unaddressed in earlier versions of the FAQ. What follows is a selection of the most important clarifications from a private client’s perspective.
New legislation in the Flanders Region for inheritance tax proceedings
28 March 2019
A decree of 21 December 2018 provides that the Flemish Tax Authority will be obliged to give notice within two years after expiration of the delay to file an inheritance tax declaration if it challenges the value of the declared assets. A similar rule was introduced for gifts, or transfers of real estate. The new rule should contribute to more legal certainty.
UBO-registration deadline postponed until 30 September 2019
14 February 2019
It has been confirmed that the deadline for the registration of UBOs in the Registry has been postponed again, this time until 30 September 2019. The UBO-registration was initially foreseen for 30 November 2018 but was immediately postponed until 30 March 2019.
Application of the European Regulations on Matrimonial Property Regimes and the Property consequences of Registered Partnerships
12 February 2019
On 29 January 2019, the European Regulations on Matrimonial Property Regimes and the Property consequences of Registered Partnerships became applicable. The Regulations harmonise in the area of jurisdiction, applicable law and the recognition and enforcement of decisions in matters of matrimonial property regime and in matters of the property consequences of registered partnerships.
Cayman Tax amended once more
5 February 2019
On 31 January 2019, the Belgian federal parliament approved a law on fiscal, anti-fraud, financial and miscellaneous provisions (“the Law”).
The Law extends the tax audit period for income tax fraud (illegal tax evasion) from 7 years to 10 years, provided such fraud involved the use of a legal arrangement (as defined under the Cayman Tax Legislation).
Real subrogation: Flemish Tax Authority imposes condition
22 January 2019
Real subrogation has both civil and tax relevance, but one has to document everything properly when replacing one good with another. With this article, Greenille by Laga aims to underline the importance of providing proper documentation when claiming real subrogation, because the tax authorities do pay close attention to this.
Occupation rent in divorce cases
17 January 2019
Unfortunately, divorce cases easily end up in long-winded proceedings. Not only should child arrangements be made, but also property arrangements. The preparation of the latter, i.e. division of matrimonial property and assets, involves a lot of paperwork. With this article, Greenille by Laga aims to underline and clarify the importance of good administration and more specifically what impact this can have in terms of occupation rent.
Belgian tax on securities accounts: action required?
18 December 2018
A few appeals before the Constitutional Court were submitted against the annual tax on securities accounts. In order to safeguard your rights in light of a possible annulment by the Constitutional Court, it may be useful to submit a reasoned request for restitution. The deadline to submit this request is 31 December 2019, but the request should preferably be submitted before the Constitutional Court’s final decision (probably fall of 2019).
New family property law as of 1 September 2018
20 July 2018
On 19 July 2018 the federal Parliament approved a new matrimonial property law.
The law also provides some reparatory changes to the new inheritance law, which was approved last year.
Both laws (new matrimonial property law and new inheritance law) will apply as of 1 September 2018.
The misleading simplicity of the tax on securities accounts
21 February 2018
The Belgian Parliament recently adopted a new tax on securities accounts. In an article published in TFR 2018, n°535 by Larcier, Greenille by Laga's Patrizia Macaluso looks at the extent to which this tax can affect family planning.
How to deal with intense family conflicts and disputes
9 February 2018
Conflicts and disputes between family members are often highly intense and emotionally charged. Even more so than during a divorce or when a joint venture goes down the drain, getting a conflict between family members out of a destructive spiral is very challenging. This is partly due to the fact that inheritance law provides mechanisms that enhance the intensity of conflict.
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.