Cross BorderEstate Planning

Marc Quaghebeur

Inheritance Rules Inheritance Tax

◦Who Inherits?◦ Asset protection◦ Forced heirshipyou cannot disinherit

◦ How much tax?◦ Play less tax?

1. Who inherits?Inheritance Rules Inheritance Tax

\───>   3% – 30%/

───> 20% – 65%───> 25% – 70%───> 30% – 80%

◦ Children◦ Spouse◦ Parents

◦ Children◦ Spouse/partner◦ Parents◦ Brothers/sisters◦ Nieces/nephews◦ Others

2. Where is my domicile?

Domicile in Belgium 

Does it matter?

Domicile in Belgium Inheritance Rules Inheritance Tax◦ your entire estate

◦ not real propertyoutside Belgium

◦ your entire estate

◦ including realproperty outsideBelgium

Domicile outside Belgium Inheritance Rules Inheritance Tax

◦ only for Belgianreal property

◦ only for Belgianreal property

EU OfficialsInheritance Rules Inheritance Tax

◦ only for Belgianreal property

◦ your entire estate

◦ not real propertyoutside Belgium

Tax Expats

Life Insurance

3. What is in my estate? Inheritance Rules Inheritance Tax◦ All you own◦ Usufruct◦ Life insurance◦ Joint tenancy◦ Claw back

◦ All you own◦ Usufruct◦ Life insurance◦ Everything you owned in the last three years

4. Which marriage contract?

• Do I have a marriage contract?

4. Which marriage contract?

•

4. Which marriage contract?

4. Which marriage contract?

Default regime in Belgium

4. Which marriage contract?

We are not Belgian

‐ First marital residence‐ Married before 1 October 2004?

5. The Forced Heirship Rules?

forced share disposable1 child  1/2 1/2

2 children 2/3 1/33 children 3/4 1/44 or more 3/4 1/4

Spouse usufruct 1/2 bare ownership 1/2full ownership 1/2

Partner nothing all

5. The Forced Heirship Rules?

forced share disposable

5. The Forced Heirship Rules?

forced share disposable1 Parent 1/4 3/42 Parents 2/4 2/4

5. The Forced Heirship Rules?

You cannot give more• In your will• By donation

Claw backLife insurance

Only forced heirs

6. Who needs to get more? 

6. Who needs to get more? 

Spouse◦Marriage contract◦ In your will◦ By donation◦ Life insurance

6. Who needs to get more? 

Partner◦ In your will◦ By donation◦ Life insurance

6. Who needs to get more? 

Children◦ In your will◦ By donation◦ Life insurance

7. If you donate …

Tax efficientNo Inheritance tax if◦ Gift Taxor◦ 3 yearsbut …

7. If you donate …do you need the income?

◦ Usufruct◦ Annuity

7. If you donate …do you want control?

8. Double Taxation? 

◦ You inherit from non resident

◦ Domicile◦ Nationality◦ Tax exiles◦ Property outside Belgium◦ Heirs pay tax when they inherit

9. Can We Mitigate Double Taxation? 

Belgium gives a tax credit for the tax paid abroad on the estate of thedeceased

9. Can We Mitigate Double Taxation? 

Domicile v. Domicile◦ two domiciles◦ domicile of origin

Domicile v. Nationality◦ U.S.A.

9. Can We Mitigate Double Taxation? 

Tax exiles◦ Netherlands ◦ France?

Property abroad

9. Can We Mitigate Double Taxation? 

Heirs pay inheritance tax on what they inherit◦ France◦ Germany◦ Spain◦ Poland

10. Shall I leave Belgium? 

Tax paradises in E.U.◦ Austria◦ Cyprus◦ Estonia◦ Latvia◦Malta◦ Portugal◦ Slovak Republic◦ Sweden

10. Shall I leave Belgium? 

No tax for spouses◦ Bulgaria◦ Czech Republic◦ Estonia◦ Ireland◦ Slovenia◦ United Kingdom

10. Shall I leave Belgium? 

Low rates or large exemptions◦ Bulgaria◦ Czech Republic◦ Estonia◦ Italy◦ Portugal◦ Romania