Tax on Swedish ISK account

[Callicles]

If I move from Sweden to Ireland, what will be the tax situation for my ISK accounts?
ISK is a bank account which has a straight tax (currently 0.88%) on the total amount.
I suppose that Irish Capital Gains Tax will be applied instead? In what way?
Will the Capital Gains Tax be applied when I sell some of the index funds in the ISK?So that a part of the money for the sale is classified as capital gains because of the rise of the value of the fund in the ISK?

Note: I will probably only stay in Ireland for four years

 

[Franc1]

I'm not a tax expert however I believe it works like this:

if you like me are a foreign national, Swedish in your case, that moves to Ireland with the intention of staying only 4 years and then return to Sweden (and retain assets and connections in Sweden), you will be considered non domiciled in Ireland for tax purposes. Ireland only taxes you on foreign income if it's remitted to Ireland. This is however valid for income generated by some specific asset classes and not others. The remittance basis doesn't apply for example to gains generated by ETFs, Offshore funds, deposit accounts, money markets, profits made by forex/currency exchange operations, but it applies to gain made on shares for example (as long as the company issuing the shares is not tax registered in Ireland) or it applies to gain made with rents. Your ISK appears to be a deposit account ? so if this is the case then I believe you are taxable in Ireland on the gains made. The first €1,270 of taxable gains in a tax year are exempt from CGT, above that you will have to pay the 33% minus the 0.88% that you already pay in Sweden. I don't know what's a ISK fund but had a quick look and looks like what's considered in Ireland to be a offshore fund. (which is taxed in Ireland at 41%)

This forum hosts a lot of high caliber tax experts that may give you better insights, otherwise maybe it would be a good idea to get some independent tax advise.


Franc

 

[jpd]

The interest will be treated as income and be subject to income tax or DIRT

 

[Callicles]

The interest will be treated as income and be subject to income tax or DIRT

Ok, but that seems to be the same rates as Capital Gains Tax 33 or 41 percent on the increased value.

 

[jpd]

Deposit interest received in account held in an EU state, Sweden is a member of the EU, is taxed at the DIRT rate of 41%

What DIRT rate is applicable?

Deposit Interest Retention Tax is deducted from the interest paid on all deposit accounts held by Irish-resident individuals.

www.revenue.ie

Information on Residency is here https://www.revenue.ie/en/jobs-and-pensions/tax-residence/index.aspx

 

[ashambles]

Callicles you're calling this acccount a bank account but this account seems a bit like a UK style ISA, so presumably stocks, etfs, funds, dividends, cash are normally involved? I assume you'd probably be better off if it was simply cash to keep it in a regular bank account where you'd be taxed on just the interest.

There might be some people here who knew how this situation was handled for ISA's pre-brexit which I think would match your expected tax treatment. Should be much more common than the ISK in Ireland. Until you know for sure I'd not take any money out of the ISK, you definitely want to avoid Irish tax if possible especially if you're already paying Swedish tax on the account.

(DIRT is 33% plus 4% PRSI on interest on EU accounts for Irish residents)