An Investment Savings Account (Swedish Investeringssparkonto, ISK) is a savings product that became available to investors in January 2012. The purpose of the new account is to make it easier to trade in financial instruments. Unlike an ordinary securities account, you pay no capital gains tax on your transactions. Capital gains tax has been replaced by an annual standardised tax and, as with an endowment, you do not report your purchases or sales in your tax return.
Unlike an endowment, you own the assets in an Investment Savings Account (ISK), which means that you have the right to attend and vote at shareholder meetings. Furthermore, you can offset capital losses in your tax return against standardised income in the account.
Assets that are stored and/or deposited in an investment savings account are subject to the provisions of the corresponding deposit guarantee under Luxembourg law. The guarantee takes effect if an institution goes bankrupt or when the Financial Supervisory Authority so decides. The deposit guarantee reimburses capital and accrued interest up to a maximum amount equivalent to EUR 100,000 per person and per institution.
When you open an Investment Savings Account (ISK) at Catella, you receive a direct number to our trading desk where you can place your transactions. You also obtain access to foreign markets and the opportunity to receive analysis that Catella obtains from external research houses.
Investment assets in an Investment Savings Account are limited to the following securities:
- Financial instruments that are admitted to trading on a regulated market or an equivalent market outside the EEA (e.g. NASDAQ OMX)
- Financial instruments traded on a trading platform in the EEA (e.g. First North)
- Units in investment funds (fund units)
Our Investment Savings Account clients benefit from our Internet service, where you can access all the information about your assets, such as portfolio reports. In addition, we offer our clients the choice of receiving their contract notes, statements and portfolio reports at home, by post or e-mail.
- No capital gains tax
- No tax return hassle
- Direct number to our trading desk
- Access to over 2,000 funds
- A tax wrapper in which gains are not taxed. Instead a tax is taken on returns each year, calculated on the market value of the securities in the account multiplied by a standardised interest rate (“statslåneränta”, November 2012 1.49%). The amount is calculated based on the market value at the start of each quarter, and deposits and withdrawals during the quarter. The effective standardised tax rate in 2013 (30% x 1.49) is a low 0.447%.
- Only individuals and the estates of a deceased person can use an ISK.
- The advantage is that there are no tax considerations when reallocating, and with a low-interest environment in the country, break-even compared to capital gains tax is a 1.49% return. Unlike with endowments, you own the actual securities and can, for example, vote at shareholder meetings. There are no tax calculations in your tax return.
- The downside is that the standardised tax is also charged if your investments perform negatively.