When you receive a donation from someone living in the Netherlands, you owe gift tax on it. This is only different if the donation remains within the gift tax exemption. Partly because no gift tax is levied in Belgium on a so-called hand gift, many Dutch people have started living in Belgium in recent years, the so-called Nederbelbelgen.
But the Dutch tax authorities do not give in easily.
This is because the Dutch Succession Act has a residence fiction. This ensures that gifts made by a Dutch citizen within ten years of emigration are taxed in the Netherlands. This regulation does not apply if one does not or no longer has the Dutch nationality. For non-Dutch nationals, only a one-year period applies. Becoming Belgian can be fiscally interesting in that respect.
For Dutch nationals living in Belgium for more than ten years, they no longer fall under the scope of the Dutch Succession Act. From that moment on, therefore, there is no tax liability on gifts in the Netherlands.
However, like the Netherlands, Belgium has inheritance tax and gift tax, which should be taken into account. However, no gift tax (in Belgium it is called registration duty) is due in case of a so-called hand gift. In the past, the gift really had to go from hand to hand. Nowadays, the term hand gift covers much more.
The advantage of the hand gift is clear. However, the disadvantage of a hand gift is that if the donor dies within three years of making the gift, inheritance tax must be paid on the gift. It is therefore important to be able to properly prove when the gift took place. One can also choose to register the gift or opt to pay registration duty anyway.
If there is no hand gift, the donation is taxed at a fixed amount. Such a donation must be made by notarial deed in Belgium.
The preparation of written hand gift documents can therefore still be important from a tax point of view, namely if it can prove that the hand gift took place more than three years before the death. If this deed of gift is signed at the Dutch notary, it will not be registered with the Belgian tax authorities, ergo: no Belgian gift tax/registration duty will be due. If the donor remains alive for three years after the establishment of the gift, no inheritance tax is due in Belgium either.
If a gift is made by parents living in Belgium to their children living in the Netherlands, the parents can declare a so-called two-step making applicable. This can ensure that upon the children's death, the donated property will go to the grandchildren without levying inheritance tax.
For more information on making donations and additional savings opportunities in Lower Belgian relations, please contact us. We will be happy to advise you.
pkooijman@kooijmanautar.nl
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