The highest band of 65% inheritance tax is also to be scrapped. The changes will come into force from 1 September.
The Flemish Government has found 139 million euro to finance a reduction in inheritance tax. This is 22 million euro more than had been muted. From 1 September the highest rate of 65% inheritance tax will be abolished.
From then, the highest rate will be 55% In addition to this a new 25% inheritance tax band will be introduced for the first 35,000 euro inherited from a brother or sister.
Currently, a surviving partner only enjoys inheritance tax exemption on the home they lived in with their deceased partner. Now they will also be exempt from inheritance tax on the first 50,000 euro of the rest of their partner’s estate.
Anyone that becomes an orphan before they reach the age of 21 will be given tax exemption on the first 75,000 euro of their inheritance. It will also become easier for grandparents to pass on their estate to their grandchildren.
At 25% the first tax band covers inheritances of between 0 and 35,000 euro. Those inheriting between 35,000 and 75,000 from their brother or sister will be taxed at 30%. This rises to 45% for inheritances from other family members and 55% for inheritances from others.