(edit title) Residency & Income Tax Living in Sweden but working in UK Options

[jonoppy]

Hy Everyone

Hoping that someone The Local may have a steer for me . I'm moving to Sweden as my Swedish wife wishes to return home after 12 years in the UK with me. We have two small children on tow! I work as an IT contractor under my own limited company in the UK and I intend to complete a lucrative contract I currently have by "commuting" back to the UK for approximately 6 months (maybe 1 year depending on extensions) - flying back to Heathrow on Monday morning; returning to Stockholm Thursday evening.

Would any kind folks out here have any ideas on the following:

- under which tax regime will my limited company fall under - Swedish or UK ie will I have to pay Swedish tax on my earnings?
- will I still be eligible for the personnummer given that I will be out of Sweden between Mondays to Thursdays.

Hoping that someone may have some ideas on the above.

With best wishes

[redblue]

International tax law is extremely complected. Hence, I strongly advice you to contact a tax lawyer before the move. Generally speaking, if you are a resident in Sweden you are taxable for your worldwide income. Hence, any income from your British company would most likely be taxable in Sweden. If you have family and property in Sweden, and commute to work in the UK, you would most likely be considered to have close ties to Sweden and be a Swedish resident.

[Yorkshireman]

Yes. because not even the 6 month or 12 month rule can apply here. as the number of days inside Sweden allowed for 0 tax is approx 6 days per month, but part days (ie. flying in/out) are also counted as full days.

- Your limited company will pay National Insurance in UK, and corporation tax.
_ You will probably have to pay income tax in UK + Sweden, anything paid in UK on income will give a tax credit in sweden, but You declare the total in Sweden, so basically You pay a top-up here to Swedish rates.

- I suspect You do the Dividends route, as a contractor? If so, Sweden taxes that as income, "Income from Capital". It gets complicated since You would pay divis via UK, where if I remember correctly there can be tax credits, if that is the case, then You declare in Sweden the total payment, and should also take into account the tax credits ... it tricky. expect to pay 20->30% income tax on divis

- Make sure You have all the paperwork to show the company paid UK national insurance, otherwise You can get slapped with the bill here ... a little paperwork, means a big difference 9% UK ? compared to 31.4 % swedish!

Be careful about how long You keep the UK limited company, it could be that the Tax office view it as a means of tax avoidance. I think it's ok in the short term.

Also, check with an accountant, or directly with Skatteverket ... sweden has similar, but a little tougher, rules about Limited companies where 4 or less owners own 50%+ of the voting shares. There are special rules for dividend payments where it is split so that part of the dividend is taxed as Work Income (salary), and the other part taxed as normal dividends. Shouldnt be an issue immediately, more in the longer term.

Welcome to Sweden!

[jonoppy]

Thanks so much for your guidance!

The arrangement isn't going to be forever as I will aim to wind down my limited company early part of next year.