Inheritance Tax
Inheritance tax is levied on the worldwide assets of an individual who at the time of death:
-Was residing or staying permanently in Sweden.
-Had moved from Sweden less than 10 years before death and was either a Swedish citizen or married to a Swedish citizen.
The beneficiary is responsible for paying the tax.
Even if a decedent does not meet the above citizenship or residency tests, the following assets of the decedent are subject to inheritance tax:
- Real estate located in Sweden;
- Moveable property constituting part of the capital of a business carried on by the deceased in Sweden;
- Shares in Swedish tenant owners' associations and similar associations, royalties and periodic benefits deriving from referred business; and
- Shares in Swedish companies and interests in Swedish co-operative societies, partnerships and investment funds, if owned by a Swedish citizen.
A surviving spouse is generally legally entitled to receive half of the value of the spouse's aggregate property free of tax.
Inheritance tax rates are based on the amount received and the relationship between the beneficiary and the deceased. Beneficiaries are divided into the following three classes:
- Class I: surviving spouses, children and other descendants of the deceased. The maximum rate payable by a spouse or child is 30%. Spouses are entitled to exemptions of SEK 280,000, and children are entitled to exemptions of SEK 70,000 plus an additional SEK 10,000 for every year under age 18.
- Class II: all beneficiaries not belonging to Class I or Class III. The tax rates are higher than for beneficiaries in Class I.
- Class III: local and regional communities, foundations and associations operated in the public interest.
The following table presents the rate schedule applicable to Class I:
Taxable Amount Tax on Lower Rate on
Exceeding Not Exceeding Amount Excess
SEK SEK SEK %
0 300,000 0 10
300,000 600,000 30,000 20
600,000 0 90,000 30
Gift Tax
Gifts of assets within or outside Sweden are taxable if, at the time of donation, the donor
- Was residing or staying permanently in Sweden.
- Had moved from Sweden less than 10 years before the date of the gift and was either a Swedish citizen or married to a Swedish citizen.
- Was a Swedish legal entity.
Gift tax, payable by any person who receives a taxable gift, is levied based on the same class divisions and rates as inheritance tax.
The following assets are subject to gift tax even if the donor does not meet the above citizenship or residency tests:
- Real estate located in Sweden;
- Moveable property constituting part of the capital of a business carried on by the deceased in Sweden;
- Shares in Swedish tenant owners' associations and similar associations, royalties and periodic benefits deriving from referred business; and
- Shares of stock and similar property if the donor is a Swedish citizen or Swedish legal entity.
Gifts from the same donor that do not exceed SEK 10,000 a year are exempt. Taxable gifts from the same donor within 10 years prior to the donor's death are included in the total value of the estate. The tax is calculated at the top rates applicable after adding the value of all prior gifts within the 10-year period. The same rule applies when several gifts from the same donor are made to the same recipient within a period of 10 years.
The contents of this article are intended as a general guide to the subject matter. Specialist advice should be sought for your specific circumstances.
For further information contact Per Snellman on Tel: +468 613 9000 0r Fax: +468 791 7511; or enter a text search 'Ernst & Young' and 'Business Monitor'.
