A well-considered wealth planning process consists of three successive stages:

(i) a thorough determination of the wishes and objectives of the individual concerned,

(ii) the legal description (and thereby definition) of these intentions,

(iii) the fiscal classification of the transactions and the structure.

This sequence must be strictly respected, and any backtracking—where the legal or fiscal considerations begin to influence the personal desires—is almost always a movement to be avoided. “Live first, then… think about taxes.”

In establishing the wishes and objectives of a wealthy individual, somewhat surprisingly, the role of the legal advisor is of great importance. Experience shows that there are several typical scenarios against which nearly all individual cases can be assessed, and that thoughtful people, with some nuances, tend to have remarkably similar patterns of wishes for each of these typical scenarios. The deep aspirations of well-thinking people are, after all, always… human. Guidance in this phase therefore primarily focuses on offering suggestions and ideas—not to take the planning out of the hands of the individual, but to allow them to benefit from insights developed over many generations within numerous wealthy families. Furthermore, it remains important to critically question particularly unusual wishes of the individual. For example, if an individual desires a binding structure that irrevocably ties future generations to one another, to an asset or a business, even if that later generation would be well-informed and unanimously wish to exit, then the current planner is likely heading in the wrong direction. While it may sometimes be desirable within the framework of succession planning for the individual to retain some control and under certain conditions ensure that a known organizational pattern after death cannot simply be overturned, the installation of a “dead hand” is rarely the real intention or a fitting purpose.[1]

Wealth planning is, par excellence, the domain of descriptive legal practice. The legal advisor applies his knowledge of legal constructs purely to legally frame and clarify the outcome of the prior personal planning. Or, as a “scriba,” the lawyer records the wishes and aspirations of the wealth planner and notes the conditions, reservations, and nuances provided. In a second phase, reclining somewhat in the legal chair, one assesses which legal act or even structure has been established through this recording. The law does not obstruct; it enables, guarantees, and enforces. The law does not create; it describes, defines, and completes where the recording does not allow completion. In other words, the lawyer does not present a civil partnership, a donation with conditions versus usufruct reservation, etc. He records and then establishes, for example, that the planner’s wish to have the next generation manage jointly, under supervision, with income partly on a common account and partly immediately individually available, with controlled withdrawal rights, etc., effectively leads to the creation of some form of civil partnership. It is the wishes of the individual that will determine whether this partnership is closer to an “organized joint ownership” type or rather resembles a form of fiduciary ownership with silent partners in a structure where ownership is held by one or a few persons.

Naturally, the fiscal dimension of every wealth plan remains. A proper understanding requires realizing that avoiding (the 27% rate on) inheritance tax will likely already be included in phase 1, as one of the personal wishes of the future testator. To the extent that taxes are an economic externality that can result in little wealth remaining for further planning, the avoidance of this levy will be one of the first objectives of the wealth planner, especially in the context of a simple family situation with complete and good understanding.

Regarding the fiscal environment of wealth planning, there is currently a very particular distinction between the taxation of wealth transfer (inheritance/gift tax) and the taxation of wealth organization (income taxes).

In terms of wealth transfer, we know the mainly regionalized levies that have evolved from strongly penalizing levels 20 years ago to a more reasonable and affordable level for transfers in a direct line. About 20 years ago, many compatriots felt “forced” to misuse the anonymity of their wealth to allow unofficial transfers. This led to extensive tax fraud in inheritance law, with all the resulting consequences such as: inability to reinvest undeclared wealth into the business, actual unavailability of the assets for many years (statute of limitations), blackmail possibilities for third parties or family branches without inheritance, etc. Today, the transfer of large fortunes is possible at 3% (for business assets and shares of family companies, gifts can be at 0%), and the transfer of residual elements at 9% (if spread over time) can be organized quite straightforwardly, with all additional protective elements for the future testator. The basic building blocks are known: gifts of movable property before a Belgian notary at 3% without any uncertainty period (the possibility to gift without gift tax before a foreign notary was removed as of December 15, 2020), or by manual gift or bank gift (or other forms of “indirect gift”) with a 5-year uncertainty period[2], whether or not covered by the beneficiary’s payment of a temporary life insurance premium; the special 0% rate for gifts of family companies; the separate application of rates on movable and immovable elements so as to avoid quickly reaching the 27% bracket for direct line inheritance (only in Flanders); or various (albeit somewhat broader) constructions for transferring significant immovable and movable wealth components (with the very important basic rule that these approaches must be considered and applied in good time).

On the income tax side, and possible taxation on holding wealth, the trend is currently toward a significant increase in taxation. This is inevitable: budgetary requirements and aging force the federal government in that direction. First, one must note that the federal government has failed in recent better years to build a buffer in view of the ongoing aging of the population. On the contrary, several different levies related to environment, luxury consumption, and energy were already tested and applied to some extent in 2003-2005. It is precisely these kinds of levies that are best reserved for a balanced redesign of taxation in a society with an aging average population. With a declining activity rate (proportionate to the total population), levies must be sought that do not again disproportionately impact the relatively shrinking group of professionally active citizens but rather target that part of the no-longer-active population that shows the necessary fiscal capacity. Lifestyle and spending patterns can be the measures for this. This is a potentially important idea for aging taxation, which should, however, be applied with moderation. By shopping online or simply driving to Lille or Breda, one can possibly escape this form of taxation, unless it is targeted at the (in practice uncontrollable) criterion of owning certain assets.

The necessary reorganization of fiscal powers between regional and federal government currently taking place, and which really should continue (unless strong policy changes occur in Wallonia), also threatens to become a catalyst for increasing federal levies on wealth and wealth income. The regions (mainly the Flemish government) wish to exercise their powers regarding economic policy and employment (and to some extent also housing, culture, and even education) not only through subsidies. Income tax is (alongside subsidy policy) the second and essential economic policy instrument, and the logic dictates that this instrument be sufficiently in the hands of the government that has economic policy competence.

What will probably remain federal, besides a sufficient share in corporate tax and tax on professional income, is precisely the (income) taxation related to wealth taxation. The federal government will therefore deepen this part of taxation, also because it causes fewer problems regarding intra-European fiscal competition (which is undeniably a fact). The increase of the withholding tax to 30%, the introduction of a currently constitutional tax on securities accounts, the tightening of the “Cayman tax,” and the substantial increase of the “patrimony tax” on the assets of non-profit entities are telling examples.

The general tax of 10% on realized private capital gains on financial assets, coming into effect January 1, 2026, is obviously the most recent expression of the above. The introduction of this levy is critically received and clearly leads to many questions—especially regarding the determination of the “exit value” for calculating future capital gains, i.e., the actual value of assets on January 1, 2026 (to avoid taxing past gains). Also regarding the fulfillment of all formalities and obligations for banks, the combination with the “Reynders tax” on bond funds, etc. In reality, there are already many more questions today than newspaper articles or even quality press suggest. It seems to me that introducing this tax was the necessary “sacrificial offering” to make politically and socially feasible very important other socio-economic legislative changes, such as pension reform, limitation of unemployment contributions over time, etc.

At the Flemish level, a double trend has recently emerged. On the one hand, there appears to be no intention to diminish existing possibilities for organizing succession. Favorable techniques for organizing a generational leap (“generation skipping”), where due to changed life expectancy wealth increasingly passes from grandparents to grandchildren, are an example.

On the other hand, there is increasing strictness aimed at excluding overly artificial planning. Examples are found not only in Vlabel policy but also in the Flemish decree adapting the extension of the 3-year term for gifts without gift tax payment to 5 years, stricter formal conditions for the effectiveness of a “duo legacy,” etc.