UK ISA (Individual Savings Account) - Swedish tax status
Skriven av brockie den 14 april, 2015 - 12:52
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I'm a UK ex-pat, resident in Sweden for several years. I have a long-standing ISA investment in the UK, pre-dating my move to Sweden; there have been no further investments in this ISA since I came to Sweden. (An ISA - Individual Savings Account - is approximately the equivalent of an ISK in Sweden except that under UK tax law it is completely tax free).
If I sell the funds in this ISA, how will Skatteverket view this - equivalent to a Swedish ISK? (no further tax to pay), or will I have to pay Swedish tax on any re-invested income and the capital gain over the life of the ISA? Is there any chance of some favourable tax treatment by Skatteverket on this?
All comments and advice welcome!
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Hi Brockie
Interesting query! Unfortunately, I have not dealt with it earlier and could not give you an answer off hand, ie I would need to do some research in order to provide a solid answer.
One key-issue to sort out I guess would be to understand whether an ISA really is equivalent to an ISK and would be accepted as such for Swedish tax purposes.
Further, how have you treated the ISA on a current basis, ie do you pay any tax (notional tax) in Sweden on the annual return in the ISA? And what are the investments in the ISA? Shares, bonds?
Kind regards
Mikael
Hi Mikael,
Thanks very much for your response.
I think on the ISA = ISK question I probably need to ask Skatteverket directly.
Up to now I have 'assumed' that the ISA is equivalent to an ISK or KF and have not reported it in any Swedish tax deklarations. The ISA contains share-based funds. My question arises since I am considering selling the contents of the ISA and want to know my likely tax liability, if any, in Sweden.
Best regards
Brockie
Ok
I have no professional experience of an ISK, but as I understand it there is a tax levied on an annual basis based on a notional return of the ISK - investment(schablonavkastning).
Further, maybe you are aware already but the Government today presents a proposal on amended rules for ISKs, pls see below (hope you can read Swedish).
Med vänlig hälsning
Mikael
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Höjd beskattning av sparande på investeringssparkonto och i kapitalförsäkring
Beskattningen av sparande på investeringssparkonto och i kapitalförsäkring bygger på en schablonavkastning som motsvarar statslåneräntan. Avkastningen på de typer av tillgångar som kan förvaras på kontona överstiger dock statslåneräntan vilket medför att sparandet är skattemässigt gynnat i förhållande till konventionell kapitalbeskattning. Under de senaste åren har kraftigt fallande statslåneräntor gjort sparformerna ännu mer gynnade. För att den schablonmässigt beräknade avkastningen bättre ska spegla den faktiska avkastningen föreslås att schablonavkastningen beräknas genom att kapitalunderlaget multipliceras med statslåneräntan ökad med 0,75 procentenheter. För att skatten inte ska bli för låg vid en mycket låg statslåneränta ska schablonavkastningen dock beräknas till lägst 1,25 procent av kapitalunderlaget.
I have an ISK (and KF) here in Sweden so I'm aware of the tax rules (including the proposed change). My Swedish is not brillant but I get by with Google's help :-).
I think my next step is to ask Skatteverket or a tax expert and decide how to handle this. I'll update this thread when I get some clear info.; maybe someone else who knows about this area will comment.
Mvh
Brockie
Regarding my earlier comment "my next step is to ask Skatteverket or a tax expert" - I now realise that you are a tax expert, so please accept my apologies!
Brockie
No problems!