Charitable bequests and donations: an update

Philippe Vyncke 10 October 2019


The new Flemish Government has announced some important changes in the field of bequests and donations. 

 

1.   Duo bequest (duo-legaat / duo-legs)

In case of a so called ‘duo bequest’, (part of) the estate is left to a charity organisation under the condition to pay out a certain amount of the bequest to a third party – beneficiary on the one hand and to pay the inheritance taxes due by this third party – beneficiary on the other hand. Due to the lower rate of inheritance taxes on bequests to charity organisations, this leads to a lower overall inheritance tax charge.

The new Flemish Government has announced its plan to “restrict” duo bequests. However, in the budget it is mentioned that the duo bequest will be fully abolished from 2020. As a countermeasure – in order to still encourage donations to charities – it was announced that the current rate of 8,5% applicable to bequests to charities will be lowered. 

 

2.   Donation to a charity via online platforms

Donations to a charity can under specific conditions qualify for a tax deduction in the personal income tax return of the donor. The donation must meet the following conditions to be tax deductible:

  •   the donation must be at least 40 euros, per calendar year and per organisation;
  •   the charity must be recognised by the Minister for Finance;
  •   the charity must issue a tax certificate for the donation(s);
  •   the donation must be made in cash.

If this donation meets these conditions, the donor receives a tax certificate from the charity. Thanks to this certificate, the donor can benefit from a tax advantage in the personal income tax return of 45% of the donationed amount. 

Recently, the administration also clarified that donations can also be made via modern payment methods (i.e. online payment platforms) as these are becoming the norm for recognised charities. 

If you would like to discuss this further into detail, please feel free to contact Stefan De Plus