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Can I renounce my usufruct? And with what repercussions?

When a usufructuary wishes to transfer his usufruct to the bare owner, he can do so by means of a simple unilateral deed, without requiring the acceptance of the bare owner. He may renounce his usufruct in whole or in part. No particular form is required by law for renouncing a right of usufruct over movable property, but a written document is strongly recommended. The renunciation of a right of usufruct in respect of immovable property located in Belgium must be made in a notarial deed to ensure that it is enforceable against third parties.

As far as taxation is concerned, the tax regime applicable to the renunciation of a right of usufruct depends on its nature.

Abdicative renunciation: If the usufructuary purely and simply renounces his right of usufruct without any consideration and without wishing to reward the bare owner, only the general fixed duty of 50 euros will be payable, provided that the deed recording the renunciation has been registered.

Renunciation by way of transfer or in favour: If the renunciation of a right of usufruct is made for valuable consideration, it will not be taxable if it relates to movable property. However, if it relates to immovable property, sale registration duties (12.5% in Brussels and Wallonia and 12% in Flanders) or partition duties (1% in Brussels and Wallonia and 2.5% in Flanders) will be payable.

If the relinquishment of the right to the usufruct is made with the intention of favouring the bare owner free of charge and is accepted by the latter, it will be considered as a gift and subject to gift tax calculated on the value of the usufruct relinquished.

If the usufructuary had previously given bare ownership of a movable or immovable asset to the bare owner, reserving the usufruct, and subsequently renounces this usufruct, only the general fixed duty of 50 euros will be payable, provided that the deed recording the renunciation has been registered.

Finally, it should be noted that if the renunciation of the usufruct was made free of charge on movable property, without having been registered, and if the renouncing party dies within three years of the renunciation (or five years in Wallonia), inheritance tax may be payable. However, this issue remains controversial and requires particular attention.

If you are interested or concerned by this issue, please do not hesitate to contact us for any further information. 

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