Optimizing Tax Efficiency: Understanding Movable Donations and Tax Obligations

2023-10-25 17:39:00

The system targets only two types of movable donations – manual (a sum of money in cash, for example) and indirect (a bank transfer without communication) – because these are not subject to the registration obligation. , which allows donees to avoid paying gift tax, the rate of which is 3%. Other donations, in particular real estate, are already subject to registration and therefore to taxation or taken into account by a notary.

Concretely, in terms of movable donations, the current Brussels tax regime imposes a period of at least three years between the death of the donor and their donation so that the latter is exempt from both gift tax and inheritance tax. Below this deadline, the donation is subject to inheritance tax which is much higher (rate of 30% from 500,000 euros). The Vervoort government intends to extend this so-called “suspicious” period from three to five years to be able to benefit from this advantageous taxation – as in Wallonia since 2022.

The goal: “to push people to register and contribute to more tax revenue,” explains Julien Limet, lawyer specializing in tax law at the Tetralaw firm. “An unregistered movable gift is an asset which, if it is not caught up at the inheritance level, ends up not being taxed at any point in the transmission chain, which is detrimental to the Regions with regard to their tax revenue. “Extending the suspect period from three to five years puts more pressure on donors and recipients. This is a measure that clearly aims to tax assets more.”

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Competition between Regions

Why not make all donations compulsorily registrable in this case? “Allowing a more favorable transmission is justified to the extent that inheritance taxes are still very high in Belgium. The rate of 30% from 500,000 euros was set in 1919 and this amount has never been indexed since . Not subjecting all donations to taxation is a compensation for the system. This encourages the skipping of generation of assets.”


This is a measure which clearly aims to tax heritage more.

Flanders still applies a suspicious period of three years. “To my knowledge, this is not something that is planned to change in the Flemish Region, which is still quite favorable in terms of gift and inheritance taxes compared to Wallonia and Brussels Capital. All the Regions have been competing with each other for tax purposes since the regionalization of these tax rights, each one making its own internal arrangements according to its needs.”

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5 million in tax revenue

If the reform is approved, Julien Limet believes that we can expect an increase in unregistered movable donations until its application. “If the new measure were to come into force from January 1, 2024, and not be retroactive with regard to previous donations as was the case in Wallonia, all donations made before will still be subject to the deadline of three years. It is therefore better to make a donation on December 31, 2023 rather than January 1, 2024.”


We already have very heavy taxation on assets. This is not a measure that advances tax justice.

The lawyer finds this new measure unfortunate. “We already have very heavy taxation on assets, Belgium is one of the countries where inheritance rates are quite prohibitive, while we are already heavily taxed on our income. Moreover, it is not a measure that goes in the direction of tax justice because it will affect everyone, both the person who will give 100,000 euros and the person who will give 100. For me, it is a purely budgetary rule which aims to fill holes and find money where it can be found.” The measure should bring 5 million euros in tax revenue to the Region.

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