A New Tax Landscape for Belgian Investors
Belgium has introduced a new capital gains tax on financial assets, approved in early April 2026 and effective from 1 January 2026. This represents a significant development for affluent Belgian investors and their advisers, raising new questions around portfolio structuring, tax efficiency and long-term planning.
While the broader Belgian tax framework remains in place, the addition of a 10% capital gains tax increases complexity, particularly for portfolios held directly via securities accounts. By adding the new capital gains regime to the already existing taxes, investors must now navigate an additional layer of taxation alongside existing rules, including withholding taxes, transaction taxes (TOB) and the annual tax on securities accounts (ATSA) which applies to portfolios above €1,000,000 and doubles to 0.30% from 2026.
Why Life Insurance Structures Are in Focus
Life insurance solutions, and in particular Branch 23 (multi-support) contracts, have long been used by Belgian resident long-term investors. The introduction of capital gains tax further strengthens their relevance.
For discretionary managed portfolios, these structures provide an alternative tax framework that differs fundamentally from direct holdings. The appeal lies in a simpler and more flexible approach to taxation: a one-off premium tax on entry, followed by deferred taxation. During the investment period, the underlying portfolio is generally exempt from Belgian taxes (with some exceptions) with capital gains taxed only on withdrawal. This supports more efficient portfolio management over time.
Control of Taxation and Simplified Administration
The ability to defer taxation until withdrawals are made creates planning opportunities. Policyholders can exercise a degree of control over when gains are realised, helping to align tax outcomes with broader financial objectives.
The structure also offers operational advantages. Tax is applied at the level of the contract rather than on each transaction within the portfolio, reducing administrative burdens and simplifying reporting. In addition, costs are deducted within the portfolio, which can reduce the taxable base for capital gains tax purposes.
Moreover, gains and losses within the underlying portfolio can be effectively offset over time, including across different calendar years. This is not possible for directly held portfolios, where losses cannot be carried forward.
Inheritance Planning Considerations
The introduction of capital gains tax also adds complexity to existing wealth planning structures. Life insurance remains a key estate planning tool and should be considered alongside other arrangements.
Importantly, life insurance contracts can offer an additional planning benefit. On death of the policyholder or last life assured, the capital gain realised within the contract and which will be distributed, can be rebased from a tax perspective. This creates a step-up for capital gains tax purposes, removing the risk of subsequent taxation on gains realised during the policyholder’s lifetime.
In a landscape where investment taxation is becoming more complex and visible, these features reinforce the role of life insurance in wealth structuring for Belgian clients.