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International Tax Advice

Employed in Sweden, rental income from UK

post 15.Aug.2017, 01:42 PM
Post #1
Joined: 15.Aug.2017

Hi All,

I am looking for some advice / guidance relating to being tax efficient when generating rental income from the UK whilst resident and full-time employed in Sweden.

I have a rental property in the UK with the income being deposited into my UK bank account. The property has an interest-only mortgage on it as well as the regular costs (service charge, management fees, insurances etc) which I can currently offset against my UK tax bill, thus reducing my tax burden (last FY tax bill was £0).

In general I would be interested to hear about others' experiences in being tax efficient in similar circumstances, especially in light of the UK's currently changing rules regarding landlord costs, effective FY 2017/2018.

I have a few specific questions for those in the know or those who might be interested...

My understanding is that 40,000 SEK plus 20 % of the total rental income will not be taxed at all and the rest will be taxed at 30%. What I am taxed in Britain will be credited against my tax bill (current / future). What I am not clear about is whether:

(a.) Skatterverket will simply minus my total HMRC tax payment from the above calculation (not much benefit to be found there given my £0 tax bill last year!), or

(b.) does the c.£11,000 not-taxable Personal Allowance figure into the equation given that this amount has already been 'considered' for taxation, meaning that either
(i) 30% tax applicable to the delta between the Personal Allowance and total rental income, or
(ii) the above calculations (40,000 SEK plus 20% etc) would be applied to the Personal Allowance / total rental income delta... My hope is for (d) but I am realistic enough to imagine the reality will be (a).

2. Can I change the structure of my property ownership, i.e. putting it into a company? Is that possible and / or would it make any difference?

3. If I add someone to the mortgage (i.e. an unemployed partner) would that change the Swedish tax burden at all?

4. I know I will need professional advice so would also welcome any suggestions / recommendations for an advisor in Stockholm.

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post 16.Aug.2017, 06:12 PM
Post #2
Location: Germany
Joined: 10.Apr.2007

MT Revision, Stockholm
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post 16.Aug.2017, 11:25 PM
Post #3
Location: Stockholm
Joined: 1.Jan.2014

If you are resident in Sweden 180+ days in a rolling 12 months period then you are liable to pay Swedish income tax on Global income. Sweden does not care about UK Tax Allowances, that is for tax in the UK. They want to know the total income, credit the tax actually paid, then calculate the remaining tax at Swedish rate. So if you paid no tax in UK on your rent income, then you have no tax credit to add to your income declaration here.

Remember however that since you are tax resident in Sweden, then you are entitled to the 30% back of the interest paid on loans, including your mortgage (though once you reach the threshold the % drops a bit on the amount above the threshold).
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post 17.Aug.2017, 02:20 PM
Post #4
Joined: 15.Aug.2017

Thanks LLHope and Cheeseroller
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