Inheritance tax: How much will your heirs have to pay?
Inheritance tax: How much will your heirs have to pay?
Inheritance involves the transfer of the deceased’s assets to the heirs. Inheritance taxes are the taxes that the heirs pay on this transfer. This is also referred to as estate tax. The amount of this tax depends on the value of the estate, but the region where the deceased lived and the heirs’ relationship to the deceased also play a role.
What is the difference between inheritance tax and estate tax?
In the Flemish Region, the term "inheritance tax" is used, while in the Brussels and Walloon Regions, the term "succession tax" is used. In any case, you pay tax on what you inherit. In short: inheritance tax and succession tax are essentially the same thing.
Who is required to pay inheritance tax?
Every legatee or heir is required to pay inheritance tax on the portion they receive.
When do I have to pay inheritance tax?
You must do this within two months of the date on which the filing deadline for the estate tax return expired. After this deadline has passed, late payment interest will be charged.
What about heirs?
The estate is distributed in accordance with the law. Generally speaking, the closer the relationship to the deceased, the lower the inheritance tax you pay. This applies to children, grandchildren, parents, and partners. If you are married, the same rates apply everywhere. If you are not married but are living together legally or de facto, the inheritance taxes vary by region. Stepchildren do not automatically inherit; this must be specified in a will.
How is inheritance tax calculated?
The final amount you pay is calculated based on the estate tax return:
A rate that increases in increments based on the amount of income;
A rate that varies depending on the degree of kinship between the heirs and the deceased.
Inheritance tax rates
The amount of inheritance tax varies depending on whether you live in the Flemish, Brussels, or Walloon Region.
Flemish Region
The tax rate for spouses ranges from 3 to 27 percent. For siblings, the inheritance tax rate ranges from 25 to 55 percent. This also applies to all other family relationships.
Brussels-Capital Region
In Brussels, the flat rate ranges from 3 to 30 percent. For all other rates, please contact the Brussels government.
Wallonia
The same applies to the Walloon Region as to the Brussels-Capital Region.
Can I get a payment deferral?
In the Flemish Region, you cannot obtain a deferral of payment, but you can apply for a payment plan. In the Brussels-Capital Region and the Walloon Region, a deferral of payment is possible for up to 5 years after the date of death. To do so, you must submit a written request to the tax collector at the Legal Security Office where you filed the estate declaration.
Are there any preferential rates for inheritance tax?
There is a special scheme for family homes, and this varies by Region. In the Flemish Region, there is also a special system for family businesses.
What if you donate all or part of your inheritance to a charity?
Associations or foundations are eligible for a special discounted rate.
How can I avoid estate taxes?
There are several ways to avoid inheritance tax:
Consider making a gift. In that case, you’ll pay the lower gift tax rate instead of the estate tax rate.
Register the gift with a notary.
Parents can gift real estate to their children while retaining the right to use it themselves.
An option clause in the prenuptial agreement offers more flexibility.
Avoid paying inheritance taxes by taking out inheritance insurance.