Paper donation: throwing the baby out with the bathwater

In this opinion piece, notary Geert Janssen (MAES Notarissen) warns against a hasty abolition of the paper gift. The structure is under political fire, but it is not a tax trick: strict rules apply, there are real costs, and there is often a legitimate reason. Janssen advocates for a targeted approach to abuse rather than a generic ban that affects prudent estate planning.

The paper gift is fully in the political spotlight this year. In the 2026 Spring Memorandum, it has been included for the first time on the list of notable tax structures. The reason is that, according to the Ministry of Finance, the structure erodes the inheritance tax base, partly because assets shift during the lifetime and, at the same time, progressive tax benefits can be utilized in gift and inheritance tax. The FD speaks of an estimated budgetary shortfall of approximately €275 million in 2026.

Legitimate instrument, not free money

Should the paper donation disappear altogether, then? That would be throwing the baby out with the bathwater. After all, a paper donation is not inherently dubious but a legitimate instrument for people who possess assets but do not have them readily available in liquid form. Think of assets in a home, a securities portfolio, or a business. However, the legislator does impose strict conditions on it: a notarial deed is mandatory, and the annual interest of 6% must actually be paid; otherwise, the tax benefit may be lost.

In public debate, it sometimes seems as if a paper gift is merely a tax trick. A paper gift is not free money: the donee acquires a claim in Box 3, the donor must pay interest, notarization costs money, and the structure can have repercussions for benefits or other financial positions. Moreover, the donor may still need the assets themselves later on. These are real deterrents against frivolous use.

We see that same restrained tone at the KNB. The professional organization does not paint a picture of jubilant tax reform, but rather of notaries struggling with the practical and fiscal uncertainty surrounding paper gifts, particularly due to Box 3. In that light, it is telling that notaries are not advocating for boundless expansion, but primarily for clarity and workability. This aligns with their broader stance: legally possible, sometimes useful, but only if it truly fits the family and asset situation of clients.

What exactly does politics want to combat?

What exactly does the political establishment want to combat? If the goal is to prevent the accumulation of benefits driven purely by tax motives, then that is defensible. Parliamentary documents also explicitly state that gifting on paper is considered undesirable if it is based solely on a tax motive. But even the political establishment simultaneously acknowledges the problem: making a clear distinction between purely tax-related cases and ordinary estate planning is difficult. That is precisely why a complete abolition is such a blunt instrument. It affects not only improper use but also families who wish to transfer assets prudently without immediately freeing up liquidity.

Alternatives

Better alternatives are conceivable. A first route is to reduce the interest benefit, for example by no longer keeping the mandatory interest rate rigidly at 6% but aligning it more closely with a current benchmark interest rate. That idea is already on the political table in the form of a possible reduction to 3%. Such an intervention specifically addresses a part of the benefit without rendering the instrument itself unusable in situations where liquidity is the real problem.

A second, likely more effective route is to primarily limit the progressive tax benefit rather than abolishing the entire concept. For example, by not automatically honoring all previously accrued tax bracket benefits for paper gifts upon later payout or death, or by imposing additional conditions above a certain amount. In this way, the legislator focuses on the point where the tax optimization truly lies, without dismissing smaller and ordinary family situations. This is not a leakage of policy, but rather more precise legislation. This idea is also inherent in the variants mentioned in the submitted document.

A third alternative is stricter enforcement of what already applies. After all, it is not without reason that the notarial profession emphasizes that interest must actually be paid and that the deed must be notarized. If the political concern is primarily that the paper donation is being used in practice as a tax loophole, then it stands to reason to intensify checks on interest, documentation, and Box 3 processing. Anyone who does not follow the rules loses the benefit immediately. Therefore, new abolition legislation is not necessarily needed to prevent abuse; consistent enforcement alone can achieve a great deal.