UK to Sweden Move - Tax Question
My partner and I are hoping to move from the UK to Sweden this year.
We have done a little research on the tax implications of relocating from the UK to Sweden, and our main concern is in relation to rental income from our flat. Our flat is owned by us and is a ‘leasehold’, meaning that have a very long lease (125 years) and pay a service charge (for maintenance/repair of the building, and communal cleaning etc) to the building landlord. The flat is financed by a bank loan (a 'mortgage'') under which our payments comprise both interest payment and capital repayment. It is currently our only residential property. We would want to rent our flat whilst we are in Sweden in order to ensure we can repay our mortgage. We do not want to sell as we may want to return to the UK in the next few years.
I see Swedish tax law differentiates between rental income from a ‘private residence’ and that from a commercial property and that the difference between the two is whether there is any prospect of us or our relatives living there in the ‘foreseeable future’. Is that correct?
We plan to move to Sweden on an open-ended basis, with a genuine view to seeing if it is somewhere we could live on a long-term basis. My concern is that Skatteverket would, despite this, consider it a permanent relocation such that we could not claim it is a 'private residence'.
Do you think we would be able to pay tax on rental income from our flat in the UK as a 'private residence' or not?
If not, how much tax would we be looking to pay on a 'commercial property' as a percentage? Is it really the case that this could be as high as 60-70% as I have seen on the internet?