One vague family transfer can leave separate debts with very different inheritance-tax outcomes.
A founder sits with two notarial deeds, a bank statement and a spreadsheet last updated three years ago. The gifts to his children were carefully arranged. The annual interest was paid, or so everyone remembers. Yet the bank transfer says only “interest”, and nobody can immediately explain how the amount was divided between the two debts.
That familiar family scene sits behind an Arnhem-Leeuwarden Court of Appeal judgment, ECLI:NL:GHARL:2026:5190. The proceedings concerned two paper gifts of €100,000, made in 2019 and 2020. Each carried annual interest of 6%. A €7,000 payment did not identify which debt it served.
The Court assessed each paper-gift debt separately. It allocated the unspecified payment first to the oldest obligation. That covered the earlier debt, but left too little for the second. A later payment came too late. Article 10 of the Successiewet therefore applied to the 2020 debt, but not to the 2019 debt.
The deed starts a continuing obligation
The Dutch term schuldigerkenning uit vrijgevigheid captures the arrangement well. The donor gives value but continues to owe the amount. The child receives a claim rather than immediate cash.
Belastingdienst requires a paper gift intended to reduce the donor’s estate to be recorded by a notary. The donor must also actually pay at least 6% interest each year. Both sides include the position in their income-tax returns, subject to the relevant box 3 rules and exceptions.
The arrangement therefore does not end when the family leaves the notary’s office. The deed creates the debt. Annual interest payments maintain it. Tax returns, bank records and calculations need to reflect the same position year after year.
This is a governance issue disguised as estate planning. Families often focus intensely on the deed and far less on the following ten years. Those later years determine whether the arrangement still makes sense after illness, death or a change of adviser.
One payment, several consequences
The Court did not treat an exact bank reference as a condition for the payment. That matters. A vague description is not automatically fatal.
Still, the judgment gives little comfort to loose administration. The payment had to be allocated, and that allocation produced different tax outcomes for two closely related debts. Cash had left the account, but the total amount did not cover the separate obligations once they were calculated.
Family memory starts to lose its value at this point. A parent may honestly believe enough interest was paid overall. A child may recall that one transfer covered everything. The estate adviser faces a more precise question later: which amount belonged to which debt, for which period, and what remained unpaid?
The practical standard is modest. Each deed needs its own opening balance, annual interest calculation, payment date and closing balance. One transfer can cover several obligations, but a short reconciliation should record the allocation when the payment is made. That is sound ledger discipline.
Private commitments affect business cash
Paper gifts often appeal to entrepreneurial families because the donor retains capital. The money may remain invested in a company, property or working stock. Value moves to the next generation on paper while liquidity stays with the founder.
Yet the interest is real cash. A 6% annual payment on one €100,000 debt is €6,000. Several deeds can create a substantial recurring private commitment. It sits alongside mortgages, tax bills, dividend timing and the uneven cash demands of an owner-managed company.
The company and the family are legally separate, but their timing pressures often meet at the same kitchen table. A weak trading year can reduce dividend room just as several private interest payments fall due. Wealth on paper does not ensure cash on the correct date.
Paper-gift interest belongs in the family’s annual liquidity view, not in a forgotten estate-planning folder. The useful conversation happens before the payment deadline, especially where the donor depends on company distributions or rental income.
Two kinds of proof
A paper gift carries two distinct proof questions. First, was the debt created in the required form? Belastingdienst guidance and its published Kennisgroep position give weight to the notarial form where an arrangement is intended to be performed after death.
Second, was the debt maintained properly? A strong deed does not replace the actual annual interest payment. Nor does a general bank total always explain several separate debt histories. The legal document and the ledger need to support each other.
The 6% requirement belongs specifically to the paper-gift setting under article 10. It should not be copied into every family loan. Other private loans call for a fact-specific assessment of an arm’s-length interest rate.
Return to the founder with the old spreadsheet. The useful question is not whether his family acted in good faith. It probably did. The question is whether another person can reconstruct each debt without relying on his memory.
A current register, an annual calculation and clearly matched payment evidence are small controls with a long life. Where old records are incomplete, a deed-specific review by the notary or tax adviser can clarify the position. The outcome turns on the documents, dates and actual payments.
A paper gift can preserve capital and support thoughtful succession. It also asks a family to act as debtor and creditor every year. The arrangement earns its intended tax treatment through continuity, not ceremony. Good intentions begin the story. Paid interest and a coherent ledger carry it to the end.
If your family uses paper gifts, have each deed, annual interest calculation and payment trail reviewed before timing or missing records create an inheritance-tax risk.
The data, sourcing, and analysis behind this article were conducted by Linda Pavan Geraedts. AI was not used to identify sources, build the factual basis, or produce the analytical judgment contained here. AI was used only as a drafting aid. The final English text was personally reviewed, edited, and approved by Linda Pavan Geraedts before publication.
References
- Ongespecificeerde rente eerst naar oudste schuldigerkenning - Taxence
- Belastingdienst - Core conditions for a paper gift
- Wettenbank - Article 10 Successiewet and retained enjoyment
- Wettenbank - Timely payment discipline for separate paper-gift debts
- Belastingdienst Kennisgroepen - Form, enforceability and gifts intended to take effect at death
- Belastingdienst - Current 2026 tax setting for family gifts and inheritances
- Belastingdienst - Current inheritance-tax rates relevant to the consequence of article 10
- Belastingdienst Kennisgroepen - Interest rate distinctions in family lending and gifting
