Swedish government rate cut boost for tax efficient savings
The latest cut to the benchmark Swedish government borrowing rate should serve to create better returns for investors using the investment savings account (Investeringssparkonto) wrapper, according to the Swedish Investment Fund Association.
The rate, which is a reference rate used for tax purposes, was cut to 0.9%. This means that the effective flat rate tax rate applied to gains made in the wrapper will be just 0.27% in 2015, according to the Association.
It added that coupled with removal of deductions relating to private retirement savings, then the benefits of saving through the wrapper next year will be even greater.
An estimated SEK35bn (€3.8bn) has been saved into the wrapper by individuals through the first three quarters of 2014.