In a short period of time COVID-19 has significantly changed everyone’s life. Given the scale of the current crisis, both the federal and regional governments have already taken numerous measures. Undoubtedly, questions will raise about the impact on inheritance and donation tax during these unprecedented times. We have aligned a few of these governmental measures as well as possible alternatives.
As long as the corona measures apply (for now until 3 May 2020) only urgent appointments with the Notary can continue. Whether an appointment can be deemed urgent, will have to be evaluated case by case by the Notary.
Depending on the particular situation a notarial donation can be deemed urgent. E.g. if the donor is in poor health, it can be deemed urgent that the donations are made through a notarial deed. However, since the Notary has the power to decide on the urgent nature, we strongly advise you to contact your notary first in this respect.
Although in the Netherlands it is not required that the notarial deed is of an urgent nature, another obstruction arises: the Belgian borders are closed for non-essential travel abroad. Making a donation through a notarial deed will - in our opinion – hardly qualify as essential cross-border travel. A signature by proxy also seems to offer little solace: the donor will still need the intervention of a Belgian Notary in order to notarize the proxy. It is after all questionable whether a notarial proxy can be deemed urgent.
Donations do not necessarily require the intervention of a Notary, e.g. a bank gift or a simple manual gift. It also remains possible to add certain terms and conditions to the donation. In principle, no donation or inheritance tax is due, unless the donor passes away within the period of three years after making the donation. Usually a contract is drawn up, a so called “pacte adjoint”, so that it remains possible to register the donation “in extremis” (within the three-year period) and pay the donation tax due (in order to avoid a higher inheritance tax).
The Flemish Tax authorities (hereafter: VLABEL) granted a general extension of the filing deadline of two months after the period of application of the corona measures, which means that an extension is granted (for now) until 3 July 2020. More specifically, declarations of inheritance for which the filing deadline is due to expire as from 13 March 2020 will automatically be granted an extension until 3 July 2020, without any tax increases being due. The same measures apply with regards to the deed that must be submitted for registration
Although there is an extension of the filing deadline of the declaration of inheritance, no automatic postponement is granted regarding the payment of the inheritance or registration taxes due. On the other hand, taking into account certain circumstances, VLABEL could apply a flexible approach in granting a payment arrangement. Whoever experiences financial problems due to the corona crisis, can address his/her request for a payment arrangement to VLABEL, either by means of the contact form on their website or by post.
So far VLABEL has not officially confirmed that no interests on late payments will be due. Although VLABEL can grant an exemption on interests on late payments, it is not yet certain that VLABEL will grant such an exemption in case of financial problems due to the current corona crisis.
Even in these unprecedented times, the Private Client Services team of Grant Thornton is happy to support you. Please do not hesitate to contact us in case you have any questions regarding the numerous corona measures and the impact on your personal situation.