New capital gains tax : the controversial exemption for shares held >10 years and large M&A deals

1.New 10% capital gains tax

Capital gains on shares realised by individuals in the framework of the normal management of their private wealth are generally not taxed.

This situation is about to change. The government agreement provides for the introduction of a new 10% tax on capital gains realised on financial assets (the so-called “solidarity contribution”), including shares.

2.Secret note : exemption after a holding period > 10 years

The MR leader has suggested that, in addition to the governmental agreement, there was a secret note according to which the capital gains tax would not apply to shares held for more than ten years. This position is however highly controversial within the governement.

3.Transfer of shares in (family-owned) companies

According to De Standaard, the introduction of such exemption would lead to tax-free transfers of companies. The newspaper refers in this respect to the following deals:

• The transfer of the shares in the tobacco company Gryson by Guido Vandermarliere for 475 mio €;
•  The transfer of the shares in the clinical lab group CMA-Medina by the couple Gino De Raedt and Frederica Verheyden (to Biogroup – France) for 1 € 1 billion;
• The transfer of shares in TVH by the families Thermote and Vanhalst for €1,1 billion;
•  The transfer of shares in Lotus Bakeries in 2021 for 350 mio €;
• Transfer of Balta and IVC by Filip Balcaen for more than €1,1 billion;
• Transfer of LMS International by Urbain Vandeurzen for 700 mio €.

De Standaard states that the new capital gains tax would not apply to such deals since the sellers (private individuals) have held the shares for more than 10 years.

4.Transfer of shares by individuals or their holding company ?

Not sure that this position is correct… :

• Entrepreneurial families often hold the shares in operational companies through a (family-owned) holding company.
• I doubt that the sellers in such large M&A deals are private individuals.
  Example: transfer of Gryson => according to press releases, the agreement has been entered into with a Belgian company GT&Co BVBA, which directly controls Gryson (and thus not by a private individual)…

Denis-Emmanuel Philippe