Tax implications for Swedes in the UK

Foreign-born refers to people who live in the UK but live outside the country Non rooms and subject to special rules. The effect of the rules is that income and capital gains earned in another country are exempt from tax, provided the money is not transferred/remitted to the UK. The British government has recently decided that tax exemption rules Non rooms Will be phased out in April 2025.

The effect of the new rules is that foreign income will be tax-free for the first four years an individual resides in the UK. The tax relief applies regardless of whether the income is earned in the UK or abroad. After four years, all income received abroad is taxable. When the rules come into force, the situation becomes more complicated for people already living in the UK.

Not the tomes People who have lived in the UK for less than four years can enjoy the new tax relief until they reach the four-year limit. People who have been resident in the UK for more than four years will be taxed under the new rules from April 2025. The UK tax year runs from April 6 to April 5. Tax on income and capital gains can be as high as 45 percent. To avoid the tax, action must be taken before the new rules come into effect.

For a time it was planned Non rooms A 50 per cent tax credit was available for the first two years after the rules came into effect, but that scheme was unfortunately shelved. However, they are given the opportunity to transfer their assets in another country to the UK with a lower tax rate of 12 per cent in the first two years. If the transfer does not take place within two years, the tax will be up to 45 percent.

One effect of the rules is that income from Investment Savings Accounts (ISK) may be taxed in the UK. This could mean huge tax consequences for Swedes resident in Great Britain who hold ISK in Sweden.

The new order is when with a person Non-dom-Status disappears, inheritance is taxed. This liability starts to apply when the individual has lived in the UK for ten years and continues to apply for ten years after moving. Inheritance tax in Great Britain is 40 percent, unlike Sweden, which does not tax inheritance. The tax is only payable if the deceased lived or lived in the UK. So this rule does not apply if an inheritance from Sweden is received in Great Britain.

The changes will be implemented in the budget on 30 October 2024 and are expected to come into force in April 2025. UK elections in January next year. The provisions come into effect during the next mandate period, which means that a possible change of power may affect the law before it comes into effect.

The new rules mean that Swedish residents already in Great Britain must review their tax situation. For example, there may be advantages to obtaining foreign capital insurance that makes succession planning possible. With Carnegie, capital insurance can be opened quickly and easily.

If you have any questions, you are welcome to contact one of Carnegie's tax attorneys.