Estate planning: recent developments

Over the last few months, we have regularly reported on the important changes in estate planning and inheritance planning. Below is an update of some of those changes.  

The care proxy: secure your estate for later
The classic example is a person who, due to a physical or mental limitation (e.g. coma, dementia), is – temporarily or permanently – unable to manage their assets properly. The question then arises who is authorised to manage that person’s estate – the spouse or partner, children, a trusted representative? In the past, one required the intervention of a justice of the peace who would then appoint an administrator to manage the estate of the incapacitated person.

A law introduced some years ago created the possibility of making legally enforceable arrangements that enter into force the moment one loses the ability to manage one’s own estate properly. In principle, court intervention can thus be avoided. The related arrangements are included in an agent contract (the care proxy) in which the future legally incompetent person (the mandator) appoints one or more future trusted representatives (agents).

The care proxy offers plenty of freedom when it comes to what it can contain. For instance, it may cover both movable and immovable goods. The mandator then decides whether or not the agent is authorised to perform acts of disposition, such as selling property or – very important – making donations. Furthermore, in choosing an agent, the mandator is not restricted to their own (close) relatives, but instead may appoint third parties also. Appointing agents and, specifically, the (limitations of) their authorities is tailored to specific needs and conditions; the succession of the agents must also be established accurately. 

A care proxy is a very useful instrument for estate management. It allows the mandator to remain in control, yet arrange at an early stage by whom and how their assets will be managed if ever they should lose decisional competence. In addition, the care proxy offers interesting opportunities for (further) estate and inheritance planning, in particular thanks to the option of donations. Since no court intervention is required, it guarantees the desired discretion as well as the certainty that the estate is managed in accordance with the wishes of the incapable person.

Consequences of the annulment of the position of the Flemish Tax Authorities regarding split acquisition/split registration of bare ownership and usufruct
As we reported earlier, the Council of State recently quashed the position of VLABEL (the Flemish Tax Authorities) on split acquisitions, which was later broadened to include split registration of bare ownership and usufruct. VLABEL’s position necessitated families to adjust their planning if they had contributed a securities or shares portfolio into a civil-law partnership, the shares of which had been donated under reservation of usufruct. An often-used technique was to exchange the usufruct against an (either or not optional) annuity. That way, the recipient of the donation acquired full ownership of the shares, while respecting the annuity for the benefit of the donor at the latter’s request.

The technique was usually applied for practical reasons, without truly confirming the underlying wishes and objectives of the parties. The judgement of the Council of State now offers the option to review this planning technique. Through private deed the usufruct may be reacquired by the donor, thus eliminating the need to hold on to the (either or not optional) annuity.

If you are in a situation where the usufruct of donated shares has been converted in the past, please don’t hesitate to contact us to help you undo the exchange and restore the initial situation.

The new rules for VAT processing of vouchers
The wonderful world of VAT and vouchers
Vouchers are a very popular marketing tool. There are various types of vouchers: discount vouchers issued by a manufacturer, redeemable at any sales outlet in Belgium, discount coupons issued free of charge by retailers, vouchers where you can get a newly launched article free of charge, gift vouchers that can be redeemed for a whole range of products or services, electronic vouchers, etc. Are yo
A showpiece, or rather a sticking plaster for a broken arm?
The Belgian fiscal consolidation regime
The general intention with the introduction of a fiscal consolidation regime was clear, namely to put the Belgian tax system back in a positive light. After all, many of our neighbouring countries have had a system of fiscal consolidation in place for many years, and Belgium consequently scored badly on this point when international groups were looking to choose an investment location. The ques
The long-term lease revival
Superficies as stealth usufruct?
A noteworthy judgement was recently handed down by the Court of Appeal of Brussels regarding the taxation of overly cheap accession in the case of superficies (23 January 2019). In the past, a number of rulings had already been made on this subject (see, inter alia, Court in Ghent of 31 October 2017). The tax authorities are clearly keen to see the end of the right of superficies, and the two judg
'Paulian claim' to the rescue
Thwarting the taxman by rejecting an inheritance: is it possible?
In inheritance law, multiple heirs can have a statutory inheritance claim. As such, they are entitled to a minimum share of the inheritance. Since the new inheritance law, it is possible to freely dispose of half of one's assets. This is called the available part. If the available part is exceeded by donations, the statutory heirs may request the reduction. Through the reduction, the statutory hei
Appointing a Belgian fiscal representative is necessary
BREXIT: Important VAT news for UK companies with a Belgian VAT number
The Belgian VAT authorities confirmed that UK companies with a direct Belgian VAT registration need to appoint a Belgian fiscal representative for VAT purposes before 30/03/2019. This is in case of a no-deal Brexit on that date. The VAT administration will allow these UK companies to maintain their current Belgian VAT number, also after appointing a fiscal representative for VAT purposes. 
Legally most correct solution
Successive usufruct: The Flemish Tax Office (Vlabel) confirms the method of levying the registration duties
On 10 December 2018, a remarkable position was published on the Vlabel website (Position no 18083 of 26 November 2018). The real estate tax system is becoming more and more sophisticated with more (tax) advantages. The question must therefore be asked whether the well-known "simple" usufruct will not be partially replaced by transactions with a double or successive usufruct. In the area of registr
From 1 January 2019
New Flemish Lease Decree
On 24 October 2018, the Flemish Parliament approved the new Flemish Lease Decree. In our newsletter of 26 October 2017, we already hinted at the changes that this new decree will bring about. One of the most important changes remains the decree's broad scope. On the one hand, extensive regulations are provided for the rental of a house intended as a main residence. What is new here is that the ter
Confirmed in writing to our office
Confirmed: both usufructuary and bare owner are to be included in the UBO register
The Belgian Ultimate Beneficial Owner (UBO) register went live on 31 October 2018. On the basis of the legal texts and the explanatory notes, as ultimate beneficiary/ies of companies, the natural person(s) who directly or indirectly hold(s) a sufficient percentage of the voting rights or of the ownership interest in this company must first be notified. A holding of at least 25% is an indication of
The advantage is a taxable benefit
Fiches and withholding tax on benefits granted by foreign companies
Should payments received from a foreign company be subject to withholding tax and should this be declared on a fiche? At the moment, the answer to this question is negative in most situations, but this is set to change. A new draft law dated 18 December 2018 provides for the introduction of a tax fiction that requires the (Belgian) employer of the beneficiary employee not only to withhold withh
The requirement to register gets a broader scope
More entrepreneurs must register with the Crossroads Bank for Enterprises (CBE)
Under the aim of creating a more attractive business climate, changes were made to the existing company law. In that context, the legislator has done away with the ‘trader’ concept, replacing it with the umbrella term ‘enterprise. Besides forming the basis for the rules of the Code of Economic Law, the Judicial Code and the Civil Code, the new enterprise concept also has consequences for reg

Subscribe to our newsletter