Swedish Inheritance and Gift Taxation (1885–2004)

Magnus Henrekson (), Gunnar Du Rietz () 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

No 936, Working Paper Series from Research Institute of Industrial Economics

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 World War II, inheritance tax rates were very low (never above six percent), but in the postwar era 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 were first cut in 1987 and then significantly reduced in 1991–1992. Finally, inheritance and gift tax revenues were relatively small, around a quarter of a percent of GDP.

Keywords: Gift tax; Inheritance tax; Estate tax; Tax avoidance; Excess burden; Entrepreneurship; Ownership transfers of family firms (search for similar items in EconPapers)
JEL-codes: D31 H20 K34 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2012-11-07, Revised 2014-11-25
New Economics Papers: this item is included in nep-ent and nep-his
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Published in Swedish Taxation: Developments since 1862, Henrekson, Magnus, Stenkula, Mikael (eds.), 2015, chapter 5, pages 223-265, Palgrave Macmillan.

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Related works:
Chapter: Swedish Inheritance and Gift Taxation (1885–2004) (2015)
Working Paper: Swedish Inheritance and Gift Taxation, 1885–2004 (2015)
Working Paper: Swedish Inheritance and Gift Taxation, 1885–2004 (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:0936

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