(edit title) Taxation on foreign property sale For someone about to become a resident Options

[Crumkev]

Hi

I am about to move to Sweden, and I plan to sell my house in North America before leaving.

I understand that once I become a Swedish resident I will be taxed on my global earnings, which includes the capital gains on the sale of a primary residence.

In my current country, primary residences are exempt from capital gains taxation.

The question is once i arrive will i still have to pay taxes on the house that i just sold? For me there are two nuances to the question.

(1) are residents taxed on all earnings in the taxation year they became residents?

(2) When is one deemed to have become a resident:
- once one arrives in Sweden or once one is issued a residency card? - If two spouses relocate to Sweden on different dates do they become residents individually or as a couple?

Thanks

[skogsbo]

From everything I understand (have property in the uk). The sale of the property will be taxed as though it was in sweden. If you sell your home and buy another home, you don't get taxed if the money goes into another property. You are only taxed on the amount that isn't reinvested, ie if you down size etc. They don't expect folk to sell and buy instantly, there can obviously be gaps between.

Couples. No you are both taxed and arrive individually. But that means if you say rented out your old home, you'd be allowed 50000kr rental income annually, each, tax free. So it pays to have both your names on any assets.

[Mpf]

I guess it depends on the tax agreements between countries. The UK and Sweden have an agreement where you are either taxed in the UK or Sweden. What the agreement is with North America, you will have to find out.

Additionally, when selling properties in Sweden you are taxed on the profit from any sale, unless you are buying something more expensive, where you can defer the payment by upto 10 years (I believe). But there again if you then sell again and buy cheaper you will be liable for the tax on the first property and on the second.

[skogsbo]

The UK have no such agreement. You pay tax in Sweden because that's where you live. Be it income from rented property or gains from a sale. They will deduct any tax paid in the UK from however much SV say you owe them. You must pay tax on a UK property as a foreigner owner, because that's the UK tax rules, you can apply to HMRC to have rental income paid pre tax, but you still have to fill in an annual return in both countries.

The only saving grace is the uk's very high 0 rate threshold and Sweden's 50000kr threshold for second property income.

[Crumkev]

Thanks everyone. The hint that i can defer taxes on whatever is reinvested in property is something i was unaware of. But what concerns me more is the rules around when a migrant starts paying swedish tax. The Swedish tax year matches the calendar year, but it is rare for a migrant to arrive in their new country on January 1st. That means most migrants have a tax obligation in two countries for at least one taxation year. Does Sweden claim the right to tax all income within a taxation year for anyone who was a resident at some point in that year? Specifically will i have to declare my pre-arrival salary, business earnings, and real-estate sale proceeds to the swedish tax agency? Note that i will arrive on July 1st 2020 and a lot has transpired in my home country in the first half of the year.

While conceptually i focus on the date on arrival as the date i will become a swedish resident is that in fact the right measure? Does the taxation agency look at some other factor, like the date a residency card / visa is issued?

There is a double taxation treaty between my current country and Sweden. So i am not concerned about anything that is similarly taxed between the two countries. What concerns me is where the tax laws are completely different and where the financial transactions occur before I move to Sweden.

Thanks

[john.boy]

After 180 days in sweden you are then classed as a tax resident, they will then tax you on income going backwards from when you arrived to whenever the tax year ends.

[Crumkev]

Thanks John.Boy. That is exactly what i was looking for!