Transcript Main presentation title

Can you trust (in) Belgium ?
Expatriates Financial Affairs
Christopher Thubron / Jacques Pieters
Brussels, 22 March 2013
www.moorestephensbrussels.com
PRECISE. PROVEN. PERFORMANCE.
Trusts: Generalities
•
Definition:
An obligation binding the Trustee to deal with the Trust
Property for the benefit of persons entitled to enforce the
obligation
•
Parties:
-
Settlor/Founder
-
Trustee
-
Beneficiaries
-
Protector (optional)
Trusts: Generalities
•
Revocable or Irrevocable
•
Types
• Fixed Interest Trusts
• Discretionary Trusts
• Accumulation Trusts
Trusts: Generalities
• Reasons to set up a trust:
•
•
•
•
anonimity
asset protection
wealth accumulation
trust issues
• Estate planning and inheritance taxes?
Trusts: non anglo-saxon countries
• Liechtenstein (Stiftung and Anstalt)
• Dutch Stichting Administratiekantoor
• Fiduciary contracts (France, Belgium…)
- Same effect as (UK) Trusts?
- Same problems too….
Trust (in) Belgium: legal recognition
•
One can always Trust in Belgium
• Belgium is no party to the Hague Convention of
July 1, 1985 on Trusts and their recognition;
• BUT : the Courts have given many favourable decisions
on trusts (de facto applying the convention);
• STILL : always a test if compatible with Belgian
(International) Public Order: inheritance laws, protection
of minors, protection of creditors
Trust in Belgium: legal recognition
• Trusts recognized by the Private International Law Code
of July 16, 2004 (right to set up a trust, choice of law,
etc…)
• « Issues » remain: Belgian (International) Public Order,
taxes…..
Trust (in) Belgium: death and taxes
• No specific rules (either income taxes or inheritance taxes)
• Who gets taxed?
– Trust itself;
– Settlor;
– Trustee;
– Beneficiaries.
• Two schools: economical beneficiary vs legal beneficiary
Trust (in) Belgium today: death and taxes
• Current situation unclear
• If a fixed right exists: often taxation of the Beneficiary (Fixed
Interest Trusts);
• Either for personal tax purposes: withholding taxes/mobile
income;
• Or for inheritance tax: art. 8 of the Belgian inheritance tax code;
• Discretionary trusts: decision of the Ruling Commission of
07.06.2012 (also applicable to trusts? Contra earlier guidances
on Trusts and inheritance taxes).
Trust (in) Belgium: too much trust will
kill you?
• Your Trust can move with you to Belgium !
• Do you want it to (tax situation unclear) ?
Belgian alternative: Fondation Privée
• Law of May 2002
• Full legal entity with full capacities: for example manage a
(family) estate
• No members, no owners, only a Founder and a Board that
manage the assets for Beneficiaries.
• Board bound by by-laws, under control of the Courts (possibility
for the Beneficiaries to have recourse to the Court)
Tax overview: set up
Fiscaliteit (Vlaanderen)
Act
Gifts
Endowment
(deed)
Legacy
(will)
Monies/values
(shares,
deeds, etc…)
Shares of
private
companies
Belgian Real
estate
Foreign Real
Estate
0
0
-
-
7%
7%
7%
7%
8,8%
8,8%
8,8%
8,8%
7%
7%
7%
7%
0
0
10%
25 Euro
Incorporation
Sale
Tax Overview: going concern
Fiscaliteit (Vlaanderen) 2
Taxes
Applicable ?
Corporate tax
NO
If no commercial activities
Tax on legal entities
YES
Only WHT, Real Estate Tax, VAT
(sometimes)
Inheritance tax
NO
Only tax of 0.17% / year
The Belgian Trust: use
•
Legal entity recognized Europe wide;
•
No inheritance taxes (in most countries) since the
legal entity doesn’t die;
•
Exceptions: Netherlands (in some cases), France
(avoidance possible);
•
Good in case of:
-
Assets/beneficiaries in multiple jurisdictions
-
Minors and (re)composed families
Example: Spanish expat case
- Private Foundation: Per Eos
- Controversy
- Goals achieved
Belgian Trust: it is good to Trust in
Belgium
• Conclusion on Private Foundation
-
(Tax) efficient
stable yet flexible
multiple use
open but discreet
reasonable cost
To reach us
• Christopher Thubron
• Tel. 02 – 639 45 45
• Email: [email protected]
• Jacques Pieters
• Tel. 02 – 639 69 41
• Email: [email protected]
Questions?