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Setting up a trust fund for grandchildren in Belgium

Question

Hi, my parents (based in UK) want to set up a trust fund for my kids (here in Belgium). I'm not sure that the same concept exists here. I said I would investigate the options for them. Does anyone one know a good way to go about this?

Answer
J Nov 14, 2017 10:28 Marked as helpful by the topicstarter

Talk to a Belgian lawyer about how you might do this. You should find most speak good English.

I don't think that the concept of a trust fund exists in Belgium, and you're going to have to look into the issues surrounding inheritance tax very carefully.

Answer
bill Nov 14, 2017 12:58

thanks for the advice - I'll setup a meeting.

Answer
anon Nov 14, 2017 13:35

As J notes above, you can't set up a "trust fund" in Belgium, as there isn't a concept of a "trust" in Belgian law.

However, your parents can set up a trust fund in the UK for their grandchildren which will be recognized in Belgium.

As well as speaking to a Belgian notaire, you may want to speak with a British solicitor. Exactly what structure you use, and how it is set up (in Belgium, or the UK) will depend on four factors;

1) the amount of money involved,
2) the reason they want to give the money away,
3) what the eventual use of the money will be and
4) whether they're giving all the money in one go, or in installments over the years.

i.e. if they are fortunate enough to have a lot of money, and want to avoid UK inheritance taxes, a UK trust set up for your children may be a good idea.

However if they just want to give your children a bit of money every year to save up (for example) for university fees / expenses, or something like an eventual deposit on a house, then just giving them the money into a bank account here annually , may be the best course of action. (and has no cost compared to setting up a "trust fund", which could be anything between several hundred to several thousand pounds in set up fees and annual costs)

Clearly depending on the amount of money involved, there are tax consequences for both your parents and your children (and potentially you), and you should take professional advice.

Answer
CC_R Nov 15, 2017 10:11

Tell them to talk to experts over there maybe a way to go is to buy premium bonds for your children. It’s very complex setting up bank or saving accounts in the UK for children full stop and almost impossible if you’re not resident plus very hard to do for grand children money laundering regulations to thanks for that. Plus Belgian tax laws mean any inheritance is subject to tax as far as I understand it certainly life insurance pay out are. They will need someone who understand tax rules but of course who knows what brexit will bring

Answer
anon Nov 15, 2017 16:25

The reason you want professional advice is that you often get bad advice on the internet.

1) premium bonds on their own are unlikely to be suitable for any long term childrens savings account.

2) Setting up a savings account for a non-resident child in the U.K. is actually very easy. A colleague of mine (who lives here in Belgium) just set one up last week for one of his grandchildren who has never lived in the U.K. and who's parents have lived out of the country for 30 years. All he required was a copy of the birth certificate and passport.

3) Also, Belgium will NOT tax an inheritance if it is held "in trust" in a legally constituted trust. That's the whole point of a trust. Belgium doesn't tax it, as technically the person who is the beneficiary of the trust has not inherited anything. They may have to declare and be taxed on the income derived from the trust, but not the inheritance itself, as it belongs to the trust, not the child.

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