Scandinavian Working Papers in Economics

Working Paper Series,
Uppsala University, Department of Economics

No 2012:18: Swedish Inheritance and Gift Taxation, 1885–2004

Gunnar Du Rietz (), Magnus Henrekson () and Daniel Waldenström ()
Additional contact information
Gunnar Du Rietz: Research Institute of Industrial Economics (IFN), Postal: P.O. Box 55665, SE-102 15 Stockholm, Sweden
Magnus Henrekson: Research Institute of Industrial Economics (IFN), Postal: P.O. Box 55665, SE-102 15 Stockholm, Sweden
Daniel Waldenström: Department of Economics, Postal: Uppsala University, P.O. Box 513, SE-751 20 Uppsala, Sweden

Abstract: This paper studies the evolution of the modern Swedish inheritance taxation from its introduction in 1885 to its abolishment in 2004. A thorough description is offered of the basic principles of the tax, including underlying ideas and ambitions, tax schedules, and rules concerning valuation of assets, liability matters and deduction opportunities. Using these rules, we calculate inheritance tax rates for the whole period for a number of differently endowed family firms and individuals. The overall trend in inheritance tax burden exhibits an inverse-U shape for all firms and individuals. Up until the end of World War I, inheritance tax rates were very low (never above four percent). Tax rates began to increase in the interwar period with tax hikes in 1918, 1920 and 1934. After World War II tax rates increased rapidly for both inherited firms and individual fortunes. Effective tax rates peaked in the mid-1970s. Valuation reliefs were introduced in the 1970s, which sharply reduced tax rates for inherited family businesses. Tax rates for deceased individuals having non-corporate wealth were first cut in 1987 and then significantly reduced in 1991–1992. Finally, inheritance and gift tax revenues were relatively small, typically 0.1 to 0.2 percent of GDP.

Keywords: Gift tax; Inheritance tax; Estate tax; Tax avoidance; Excess burden; Entrepreneurship; Ownership transfers of family firms

JEL-codes: D31; H20; K34

52 pages, First version: November 6, 2012. Revised: August 4, 2015.

Full text files

FULLTEXT02.pdf PDF-file 

Download statistics

Questions (including download problems) about the papers in this series should be directed to Lovisa Isaksson ()
Report other problems with accessing this service to Sune Karlsson ().

This page generated on 2019-01-15 07:35:25.