Record number of family-owned businesses escape succession fees

A record number of businesses were passed on to new owners last year without the payment of succession rights, according to figures obtained from the government of Flanders by member of parliament Robrecht Bothuyne.

In 2012, the government introduced a regulation that allowed the owner of a business to sell it within the family before retiring without the new owners paying succession rights. The measure was intended to tackle the problem of small companies going out of business when the owner died. 

More than three in four businesses in Belgium as a whole are family-owned. They provide 45% of the employment in the country and 33% of the GDP. Succession duties on the death of a business owner amount to 3% of the value of the company if inherited by close relatives, including spouse and children, or 7% if inherited by others.

The regulation encourages owners to pass the business to descendants while still alive. At the same time, it also makes it more expensive to take over a family company after the owner’s death.

“This way, a great many family businesses and the jobs they represent in Flanders are assured of a future, which is very important for the local economy,” Bothuyne said. The measure protects not only jobs but the years of experience and knowhow the owner has accumulated.

Last year 1,600 businesses were passed to new family owners while the owner was still alive and active, compared to only 300 before the measure was introduced.

Photo by Frédéric Van Hoof