Courtesy of Mish.
The inheritance tax in France is 45%, in Belgium it’s 3%. France has a wealth tax, Belgium doesn’t.
Wealthy French have known and used these loopholes for quite some time, but appeal of such schemes is on the rise following massive tax hikes of president Francois Hollande.
Please consider Wealthy French eye Belgian tax perks.
For decades, Thierry Afschrift’s boutique tax law practice was among the best-kept secrets of Belgium’s wealthy elite, his name passed discreetly between the landed gentry and industrialists in Brussels’ leafy suburbs seeking shelter from the kingdom’s Byzantine tax laws.
But in the past five months, Mr Afschrift’s phones have been ringing off the hook from another clientele altogether – wealthy Frenchmen seeking to set up private foundations in Belgium to protect their family fortunes from onerous taxes imposed by President François Hollande.
“We have loads of people coming every day asking us questions about setting up foundations,” Mr Afschrift said from his office on Brussels’ upmarket Avenue Louise. Other Belgian tax lawyers say they have been receiving around 10 calls a day from France inquiring about private family foundations.
The key to Belgian foundation law is that it permits the patron to hand over all assets to children as a gift, taxed at only 3 per cent instead of France’s 45 per cent inheritance tax. It also avoids France’s annual wealth tax, a levy that does not exist in Belgium. To top it off, the foundation’s benefactor retains full control of the assets while alive and can set disbursement terms for after their death.
“It is a very good tool to transfer assets gradually and assure the children don’t squander that family’s accumulated wealth,” says Manoël Dekeyser, one of Belgium’s most prominent tax attorneys.
“If the children want the money to play at the casino, the foundation’s manager can block them from doing so, if he has been instructed to do so by the parents.”
Said one lawyer, who asked not to be named to protect his firm: “Unfortunately, Arnault brought greater attention to the foundations system than we would have hoped.
“I would have preferred to keep it very discreet. Rich people know how to find us. They don’t need to read it in the Financial Times.”
Arnault Effect
Bernard Arnault is the owner of fashion and champagne house LVMH and reputedly Europe’s richest man….
