September 22, 2023

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ABOLITION OF INHERITANCE TAX IN SWEDEN

How high-tax Sweden abolished its disastrous inheritance tax — Institute of  Economic Affairs

Since the 17th century, the Swedish inheritance tax has endured various transformations. This tax was imposed upon property received by heritage, gift, and sometimes life policy. The Inheritance tax assessed on the worth of the heir’s part of the property was continuous and modified as per the tax class to which the successor resided. OmdömesStälle is a reviewing site that endures reviews, evaluations, and criticisms at all physical or online companies in Sweden. You can enhance your buying experience by reviewing the plethora of opinions from thousands of customers who got there before you, thus you can get benefits from their first-hand experience.

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Abrogation of Inheritance tax

Inheritance tax was an extra burden for people to live in a property that was heavily taxed. Such a situation forced them to sell their possessions to bear the expenses. 

Here are some of the reasons why there should be no tax on inherited property:

  • Incapability to afford a living 

Due to the heavy taxes on property like houses and other assets, the citizens felt helpless to afford a decent living, forced to sell their homes and holiday cottages. Due to these taxes, the overall household saving was relatively low.

  •  Double tax

People in Sweden already pay Income taxes when they earn, plus the Inheritance tax also levied on them causes double taxation, thus making it unpopular among the masses.

  •  No evenhanded profit to the Government

Inheritance taxes had been by no means a sizable supply of income for the Swedish Government. The revenue from such taxes was just 0.3 percentage of GDP. When the government called off the taxes, the GDP gradually rose to approximately 0.15 percent of GDP. The primary reason was the equity and wealth redistribution and to supplement various tax legislation of wealth tax. Thus, there was no profitable way to gain from the inheritance tax from the citizens, and abolishing it proved to be a surplus for the state.

The parliamentary process for the abolition of Inheritance Tax

In June 2004, the parliamentary members set up an inquiry for the substantial cost reduction of tax. Protests from marketers have been massive, and the reaction to the concept turned very drastic. When in September 2004, the Social democratic presented the national budget bill for 2005, they agreed to dispose of the tax levitation and proposed the statement that repealing the tax will improve conditions for running businesses to facilitate succession.

Conclusion

Today, many marketers have returned to Sweden with their families and the groups of relatives of commercial enterprise proprietors running successful businesses without the fear of income tax and Inheritance taxes burden. The cancellation of Inheritance taxation has made the Swedish tax system much better than in the past.