Inheritance tax has been called inheritance tax since 2010. The law, which came into effect in 1956, had so many difficulties and very outdated rules that it has been adjusted and, above all, simplified. This makes it much clearer and more organized. The amount you have to pay in inheritance tax depends on the amount of the inheritance and the type of relationship you had with the deceased. You must report this to the tax authorities within eight months:
The name inheritance tax also has the old name inheritance tax, as it was introduced in 1956. Until 2010 this was still called inheritance tax, but since 2010 it has been called inheritance tax. So both mean the same. In Belgium it is called inheritance law. Inheritance tax is the tax that one pays after receiving an inheritance.
Why pay taxes
Why tax has to be paid on an inheritance is simply because the state wants to fill its coffers. And takes every opportunity to do this. So wherever tax can be introduced, it will be done. In fact, inheritance tax is a double tax. After all, whoever first owned the money has already paid taxes on this amount. Someone else then inherits the money and has to pay tax on it again. A lot of people obviously find this unfair. However, the tax authorities will not make any difference at all. This says that the heir receives the money for the first time and therefore must pay tax. If he or she eventually dies and the money goes to the next heir, he or she will have to pay inheritance tax again. This way the tax authorities collect a lot of extra money. Why make it difficult when it can be easy? The heir must file a tax return with the tax authorities within eight months after death.
Most and least tax
Not everyone pays the same amount of tax. Of course, it depends first of all on the amount of the inheritance. That actually makes sense. Another factor is the extent to which you are related to the deceased person. Furthermore, certain amounts are also exempt from tax: this means that you do not have to pay inheritance tax on this amount.
Partners do not have to pay inheritance tax on the first 600,000 euros. After that, the rate is 10 percent on the first 118,000 euros. Above that, the rate is 20 percent. So for an inheritance of 1 million euros, the inheritance tax is:
- first 600,000 euros: 0 euros inheritance tax
- next 118,000 euros: 10 percent = 11,800 euros inheritance tax
- next remaining amount = (282,000 euros) : 20 percent = 56,400 euros inheritance tax
- total: 68,200 euros inheritance tax
Children and sick and disabled children
No inheritance tax has to be paid on the first 19,000 euros. Then 10 percent on the first 118,000 euros. Above that, the rate is 20 percent. For disabled and sick children, no inheritance tax has to be paid on the first 57,000 euros. The other rates are the same as for children.
The following applies to grandchildren: no inheritance tax has to be paid on the first 19,000 euros. Then 18 percent on the first 118,000 euros. Above that, a rate of 36 percent applies.
The parents of the deceased who are heirs do not have to pay inheritance tax on the first 45,000 euros. Then a rate of 30 percent on the first 118,000 euros. Above that, the rate becomes 40 percent. Parents who inherit 300,000 euros therefore pay:
- First 45,000 euros: 0 euros inheritance tax
- next 118,000 euros: 30 percent = 35,400 euros inheritance tax
- next remaining amount = (137,000 euros) : 40 percent = 54,800 euros inheritance tax
- total: 90,200 euros inheritance tax
Other heirs include: brother, sister, nephew, niece, uncle, aunt and all others. An exemption of 2,000 euros applies for this. Thereafter, 30 percent inheritance tax is paid on the first 118,000 euros. Above that, a rate of 40 percent applies. If a brother were to inherit the same amount as the parent, namely 300,000 euros as in the example above, the parent would pay 54,800 euros in inheritance tax and the brother would pay 107,400 euros. This is more than 1/3 of the inheritance amount.