Investing for your child in Belgium: legal usufruct, gifting, and the step-up that does not exist

First: most guidance you will find is not Belgian

Search in English for investing for children and you land almost immediately on UK or US material. It is often well written, and it does not apply.

If you are a Belgian resident, none of the following exists for you:

• a Junior ISA, ISA allowance, or any tax-free wrapper of that kind;
• a 529 plan or education savings account;
• a UTMA/UGMA custodial account in the American sense;
• an annual gift-tax exclusion per child.

Belgium has no annual exempt amount for gifting to a child. What it has is something else: a low flat rate on a registered gift, or an unregistered gift with a waiting period. See below.

Two ways to start

An account in the child's name

Only a parent or legal representative can open an account in a minor's name. The cash and securities legally belong to the child, and you manage them as parent.

That is the cleanest form, and it has one consequence people rarely think through in advance: at eighteen the child disposes of it freely. You then have no say in what happens to the wealth you built.

Investing in your own name

The other route is holding the position in your own name intending to gift it later. You keep control, but you defer two things: the gifting question, and the latent capital-gains tax. See below why the second does not go away.

The trap that rarely gets mentioned: legal usufruct

This is where an account in the child's name behaves differently from what people assume.

Article 126, §4 of the Income Tax Code combines a child's income with that of the parents for as long as those parents hold the legal usufruct over it. In practice:

• The child's movable income — dividends, interest — is declared on the parents' return, not on a separate return for the child.
• Where the parents are married, legally cohabiting or cohabiting in fact, the amount is split half to each.
• Where the parents are divorced, it goes to the parent holding the usufruct, unless a court decision provides otherwise.
• Exceptions: the child's own professional income and maintenance payments follow a different rule.

So anyone holding a distributing ETF in a child's name in order to "use the child's exemption" should first check that the exemption is there. The dividends land on your return.

What that means for the €10,000 exemption

This is where our certainty stops, and that is worth knowing rather than assuming.

The capital-gains tax has an exempt first tranche per person per year. Whether a minor child counts as a separate person for that purpose, or whether a realised gain flows up to the parents the way movable income does, we have not been able to establish from a primary source.

The gap is large: an own tranche per child, or none. We will not put an answer here that we cannot support — and any plan built on an extra exemption per child should be confirmed before it is acted on. How the tranche itself works is in the exemption is never automatic.

Gifting: there is no step-up

This is the most important finding for anyone wanting to pass on an existing portfolio.

The gift itself falls outside the capital-gains tax: it is not a taxable event. But the later sale by the recipient is, and it starts from the donor's acquisition value.

In other words: the gift creates no new acquisition value. The recipient takes over the donor's, and the latent tax burden therefore migrates to the child. Gifting is not a way to make an accumulated gain disappear.

A practical obligation attaches to this that is easy to overlook: the recipient must be able to demonstrate the price at which the donor acquired the securities. For lots the donor held before 2026, the relevant value is that of 31 December 2025 — see the step-up value at 31 December 2025. That evidence does not travel automatically with the securities: you have to hand it over.

What a gift costs in Belgium

Two routes, at different prices and different risk:

• A registered gift of movable property in the direct line is taxed at a low flat rate — 3% in Flanders — regardless of size. The matter is then settled definitively.
• An unregistered hand or bank gift costs nothing at the moment of the gift. But if the donor dies during the suspect period, the gifted amount is drawn back into inheritance tax. Flanders extended that period from three to five years for gifts made from 1 January 2025.

Those rates and that period are regional matters. The figures above are Flanders'; for Brussels or Wallonia, check what applies in your region, because they do not align.

What changes at eighteen

On an account in the child's name, the legal usufruct ends. From then on:

• the child disposes of the wealth freely;
• the child declares their own movable income, on their own return;
• and the child carries the obligations that go with it — including, with a foreign broker, registering the account. See declaring a foreign account.

That is not a distant detail: it is the moment a file you kept for eighteen years has to be handed over.

What to record now

1. Per lot: date, quantity and acquisition price — and for anything predating 2026, the value at 31 December 2025, with its source.
2. On a gift: proof of what the donor paid. Without it the recipient is left with an indefensible return later.
3. Whether the gift is registered or not, and on what date. That date sets when the suspect period ends.
4. Whose name the account is in, because that determines whose return the income appears on.

What a later sale will cost in capital-gains tax — step-up and exempt tranche included — can be worked through with the calculator.

---

This is general information on Belgian taxation, not tax, legal or investment advice. Gift and inheritance tax are regional: always have a concrete plan checked for your own region.