Tax charged on International life insurance plans held by Residents of Sweden

 

 

Taxation of an Offshore Life Plan Before Benefits are Taken:

 

Yield tax is levied on foreign life insurance plans. A Swedish resident plan owner will be liable to pay an annual yield tax levied at a rate of 30 percent of a deemed yield on the exit value of the plan as at 1 January each year.

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Swedish Yield Tax for 2018

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For fiscal year 2018, the Swedish State Borrowing rate for 30 November 2017 was announced by the Swedish Debt Office (Sw. Riksgälden) on 23 November, amounting to 0.49%
 
On 30 November the Swedish parliament decided on the Swedish government’s proposal to increase the previous calculation for the base of taxation from State borrowing rate + 0.75% to the State Borrowing rate + 1% for both life assurance and investment savings account. The increase of the base for calculation with the additional 0.25% will come into force per 1 January 2018. The minimum threshold for taxation of life assurance and investment savings accounts that was introduced per 1 January 2016 of 1.25% is still valid.

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It means that the effective annual yield tax rate for life insurance contracts in 2018 is 0.447% (1.49% x 30%).

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Taxation of an Offshore Life Plan when Benefits are Taken:

 

Withdrawals, surrenders and payments upon the death of the last life assured should be free of tax. In addition, there is no wealth or inheritance tax in Sweden.

 

 

* The above is for information purposes only and should not be consider financial or taxation advice.