Giving to others is always fun. As soon as this is more than just a minor gift, legal and tax aspects can come into play. For example, it is often a good idea to give during your lifetime (legal term: ‘donation inter vivos’) considering the tax advantages, both for giving to family members or donating to charities.
We can help you to implement a one-time gift in a responsible manner or to draw up a gift plan. In doing so, we shall of course consider the consequences for your financial position, any gift or inheritance tax owed and income tax.
In a gift plan you can outline your wishes and possibilities on the long term, but you have complete freedom on whether or not you want to implement the plan. Of course if a plan has been drawn up, it can always be changed, for example if the circumstances change.
Giving an annuity
If you want to donate money to charity, you can give the donation in the form of an annuity, committing yourself for 5 years. The instalments can, under conditions, be deducted from income tax.
Each year parents can give their children €5,363.= free of taxes (in 2018). If you give no more than this amount, you do not have to declare this for taxes.
If your child is between the ages of 18 and 35, you can give your child in 1 year no more than €25,731.= (in 2018) free of taxes. You can only use this one-off increased exemption once. This arrangement also applies to children that are older than 35 but have a partner younger than 35. If you use this one-off increased exemption you have to declare this with the tax authorities, noting the appeal to the exemption.
Gifts on paper
Whether you have to pay taxes on a gift depends on the value of the gift and your relationship to the giver. This part helps you determine whether there is something special about the gift. You can also give something without actually involving cash. A notarial deed can then state that there is debt to the receiver. This is also called a ‘paper gift’. The claim that the receiver has on the giver can be claimed, for example on decease of the giver.
Gifts in Belgium
A Dutch notarial deed can record manual gifts (money, or mostly shares in a company) without Belgian or Dutch gift tax being levied.
An advantage if such a notarial deed is that time at which and the conditions under which the gift is made are clearly recorded. The giver often retains the right of usufruct. This means he is still entitled to the income of the donated assets.
If the gift were made under a Belgian notarial deed, the gift would be charged with Belgian gift tax.
Dutch people who have lived in The Netherlands and have emigrated from The Netherlands to Belgium, can use this possibility after expiry of ten years after their emigration.