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Capital gains tax?

Liquidation of uk ltd company

RKH
post 25.Aug.2017, 01:28 PM
Post #1
Joined: 2.Dec.2016

Hi there,

I moved to Sweden from Scotland 10 months ago as my husband got a job here. I've continued to work as a contractor (now remotely) for a UK based company and 4 months ago opened a Swedish AB to replace my UK Ltd company, primarily to simplify my tax returns.

I ceased trading through the UK company 4 months ago and am in the process of closing it down. The net profit remaining will be split between my husband and I who are 50:50 shareholders. There would be minimal capital gains tax to pay in the U.K. due to the tax free allowance there. As I understand it there's a 30% flat rate capital gains tax in Sweden.

My question:
Do we really have to pay 30% capital gains tax on the whole amount just because we now live in Sweden? Or is there some allowance for the fact the money was earned in the UK over a number of years and we have been living in Sweden less than a year? E.g. is the tax liability proportionate to the amount earned whilst resident in each country? (Please say yes)

Hoping someone can make my day and point me in the direction of a clause that states we don't have to pay 30% tax on it all...
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yet another brit
post 25.Aug.2017, 04:12 PM
Post #2
Joined: 5.Jan.2013

QUOTE (RKH @ 25.Aug.2017, 01:28 PM) *
Or is there some allowance for the fact the money was earned in the UK over a number of years and we have been living in Sweden less than a year? E.g. is the tax liability pr ... (show full quote)


I don't know if you will be able to claim that your income was subject to UK not SE rules pro rata up to the current year - it would sound reasonable to do so (since you weren't tax liable in Sweden then) but who knows.

By way of helpful(?) precedent, the concept of "accumulated income" exists, which is that money earned over multiple years but offered for taxation at a single point in time can be split back over the number of years it was earned. But it only applies to state-level income tax (ie marginal higher rate tax). It can apply to sales of shares in business (that may be taxed as income), but not to capital gains per se. I realise this last sentence is counterintuitive, but I'm just translating from the tax office side here : https://www.skatteverket.se/privat/skatter/...8bc8000518.html


Your best bet is to talk to an accountant with knowledge of the tax treaty between the UK&SE and a creative mind, for sure. Your second best bet is just not to tell anyone and hope for the best.

What you really don't want is for the lot to be considered income (not capital gain) in the current year - that would be "wave goodbye to 60%+" territory as there would be employment tax on top of personal tax. An accountant might have some solutions for you.
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RKH
post 7.Sep.2017, 10:39 AM
Post #3
Joined: 2.Dec.2016

Thank you very much for your reply, I really appreciate it. I will take some professional advice on the matter.
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sandon
post 7.Sep.2017, 03:30 PM
Post #4
Joined: 6.Jan.2007

This must very easy to prove by an accountant and your balance and result for the years previous your move. if earnings are from previous year before you are a fully tax subject in Sweden then they will not be taxed in Sweden.

Drop me a line at swaaccounting@hotmail.com and i can surely assist.
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