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Donation rights in Wallonia: what will change - Finance

Donation rights in Wallonia: what will change – Finance

The draft tax decree for “a fairer tax” has been sent to the Walloon Parliament for adoption and will come into force on January 1, 2022. It modifies the donation regime in the south of the country.

1. Wallonia will modify its donation rights. What will change?

Gregory Homans: The draft tax decree for “a fairer tax” has been sent to the Walloon Parliament for adoption and will come into force on January 1, 2022. When donating movable property (money, listed securities, works of art, etc.), the parties can legally decide either to register it with the tax authorities for a registration fee of 3.3% in direct line or 5.5% in other cases, or not to register it. In the latter case, no tax will be due if the donor does not die within three years of the donation. In the event of the donor’s death during this interval, the recipient will be liable for inheritance tax of up to 30% in the direct line and 80% in other cases. To encourage individuals to register donations, the Walloon government has extended this period from three to five years. It will therefore now be necessary to remain alive for five years to prevent the person rewarded from being taxed on the assets received.

2. Are old donations affected?

The extension of the taxable period from three to five years concerns all unregistered movable donations from 2019, and not only those made from January 1, 2022. More concretely, this means, for example, that a taxpayer who would have made a donation in 2020 and which was counting on the three-year period to benefit from an inheritance exemption, will now have to wait until 2025. This could be felt by some Walloon residents as unfair and again alter their confidence in the Belgian tax system .

Grégory Homans, tax lawyer (Dekeyser & Associés) © PG/VIDEO EVENT

3. What advice would you give to those who want to rest easy?

There is no point in making donations hastily before the end of the year. For people who do not wish to run the tax risk linked to the possible death of the donor within five years of the donation, there are two options. First option: register the donation spontaneously. This registration does not necessarily require the intervention of a notary and can take place at any time before the death of the donor (in the event of health concerns). Second possibility: take out a specific insurance product covering this tax risk. People who have already taken out such a policy should make sure to adjust it to extend the period covered to two additional years. More broadly, this decree brings its share of surprises to Walloon residents who will inevitably have to adapt their heritage strategy with regard to these new developments.

1. Wallonia will modify its donation rights. What will change? Grégory Homans: The draft tax decree for “a fairer tax” has been sent to the Walloon Parliament for adoption and will come into force on January 1, 2022. When donating movable property (money, listed securities, works of art, etc. ), the parties can legally decide either to register it with the tax authorities for a registration fee of 3.3% in direct line or 5.5% in other cases, or not to register it. to register. In the latter case, no tax will be due if the donor does not die within three years of the donation. In the event of the donor’s death during this interval, the recipient will be liable for inheritance tax of up to 30% in the direct line and 80% in other cases. To encourage individuals to register donations, the Walloon government has extended this period from three to five years. It will therefore now be necessary to remain alive for five years to prevent the person rewarded from being taxed on the assets received.2. Are old donations affected? The extension of the taxable period from three to five years concerns all unregistered movable donations from 2019, and not only those made from January 1, 2022. More concretely, this means, for example, that a taxpayer who would have made a donation in 2020 and which was counting on the three-year period to benefit from an inheritance exemption, will now have to wait until 2025. This could be felt by some Walloon residents as unfair and again alter their confidence in the Belgian tax system . 3. What advice would you give to those who want to rest easy? There is no point in making donations hastily before the end of the year. For people who do not wish to run the tax risk linked to the possible death of the donor within five years of the donation, there are two options. First option: register the donation spontaneously. This registration does not necessarily require the intervention of a notary and can take place at any time before the death of the donor (in the event of health concerns). Second possibility: take out a specific insurance product covering this tax risk. People who have already taken out such a policy should make sure to adjust it to extend the period covered to two additional years. More broadly, this decree brings its share of surprises to Walloon residents who will inevitably have to adapt their heritage strategy with regard to these new developments.

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