Tuesday, 13 July 2021
In 2020, €434.4 million was bequeathed to charities from people living in Flanders, over €100 million more than in 2019, according to figures compiled by Flemish MP Katrien Schryvers (CD&V).
The highest donation made was one of almost €38 million.
These donations were made per the instructions of wills, by people who choose to bequeath some of their wealth to charitable institutions upon their death.
The number of wills that include a charitable contribution is increasing year after year.
Last year, there were 935 wills with charity declarations, with 1,410 declarations in total (more than one declaration can be made per will).
These sort of donations amounted to €434.4 million, or almost €1.2 million per day. A year earlier, that figure was just under €330 million.
As a possible cause of the increase, MP Schryvers points to the familiarity of the dual legacy: this allows a person to leave part of their inheritance to a good cause and part of it to other heirs, but with the charity paying the inheritance tax on both their part and the part of the other heirs, as well, leaving the other heirs to inherit a smaller portion, but bumping them into a lower tax rate bracket.
But the benefits of the lower tax bracket proved to be more of an incentive than any sort of charitable feeling.
“The choice to leave part of the inheritance to a charity in recent years was often motivated by the desire to give tax benefits to other heirs, rather than a desire to support the charity itself,” said Schryvers.
This fiscal advantage, however, changed as of 1 July this year, meaning there is no longer a tax advantage for wills with a dual legacy in Flanders, even if the will was made before that date.
Through the reform of the dual legacy option in wills, the Flemish government wants to strengthen the altruistic motives of donating to good causes.
There will be a zero rate for any legacies to charities, however, and the option to designate heirs that can benefit from reduced tax rates up to a maximum of €15,000, according to Schryvers.
The Brussels Times