The judgment handed down by the Antwerp Court of Appeal on 3 February 2026 provides an opportunity to revisit a classic real-estate restructuring technique, which consists of isolating a building within a beneficiary company by means of a partial demerger, before transferring the shares of that property company under a “share deal”.
The judgment establishes a clear line of case law: the transactions at issue constitute neither a non-genuine arrangement within the meaning of Article 203, §1, first paragraph, 7° of the Income Tax Code 1992 (ITC 92), nor tax abuse within the meaning of Article 344, §1 ITC 92, provided the transaction forms part of a justified restructuring reflecting economic reality.
The selling shareholder was a Belgian holding company, subject to corporate income tax, which met the conditions for the capital gains exemption on shares provided for in Article 192 ITC 92.
The shares transferred were those of a subsidiary which, following a partial demerger, held nothing but real-estate assets. Those shares were transferred to a third-party investor.
The tax authorities sought to deny the exemption of the capital gain on shares, arguing that :
The Court recalls that the application of the anti-abuse provision of Article 203, §1, first paragraph, 7° ITC 92 is subject to two cumulative conditions: the existence of a legal act or a series of legal acts, and its artificial character.
An arrangement is regarded as artificial where it is not put in place for “valid commercial reasons which reflect economic reality”. Drawing on the preparatory works, the Court stresses that this assessment consists of verifying whether the legal structure put in place reflects genuine economic logic, independently of tax considerations. It also clarifies that valid reasons are not limited to strictly commercial grounds, but extend more broadly to economic reasons.
The Court confirms here something previous case law had already established: using a share transfer (“share deal”) in the real-estate sector is standard market practice.
On the specific facts of the case, both the partial demerger and the share transfer formed part of a broader restructuring designed to free up funds for reinvestment, and were supported by commercial reasons justifying the transactions carried out. The taxpayer’s free choice of a “share deal” over an “asset deal” cannot, in the circumstances of the case, be characterised as an “artificial detour”.
In the alternative, the tax authorities invoked tax abuse within the meaning of Article 344, §1 ITC 92, arguing that the partial demerger followed by the transfer of shares constituted an artificial construction designed to escape taxation of real-estate capital gains by benefiting from the exemption of capital gains on shares under Article 192 ITC.
The lower court had rejected that argument on two grounds. First, the anti-abuse measure does not allow the facts to be altered; since the holding company had never owned the buildings, it could not be taxed on a real-estate capital gain it could never have realised. Second, the authorities had failed to show that the acts performed ran counter to the objectives of Article 192 ITC, or that their essential purpose was to avoid tax, genuine economic reasons justifying the transactions carried out.
The Court of Appeal holds that, in light of what was already decided at first instance, it is sufficiently established in this case that the choice to carry out a partial demerger followed by a sale of the shares was driven by reasons other than avoiding income tax.
The judgment makes a useful contribution to defining the scope of the anti-abuse provisions. Where the property company reflects a substantive reality and non-tax — commercial and/or economic — reasons support the structural choice made, the tax authorities cannot substitute their own reading of the transaction for the one freely agreed by the parties. To accept otherwise would grant the authorities a power of after-the-fact requalification that the legislature has not conferred on them.
In practical terms, the judgment sends a clear message to taxpayers and their advisers: the importance of carefully preparing and documenting the economic reasons underlying a restructuring, in order to secure the tax treatment of transactions which, when properly structured, remain legitimate instruments of wealth and business planning.