Personal taxpayers may establish a share savings account (ASK) for listed shares and units in mutual funds.
What is a share savings account?
A share savings account is an account where you can buy and sell shares and mutual funds tax-free. Gains are not taxed, and deductions are not granted as long as the value is kept in the account. You can withdraw (withdrawals) the cost price (invested amount) tax-free at any time. If you withdraw (withdrawals) more than the cost price, the excess less deductible risk-free return is taxed.
The tax rate for 2019 and 2020 is 31.68 percent.
That means dividend from shares and mutual funds (deposited in your share savings account) are not continuously taxed upon pay-out (applies from and including 2019), but that they are deposited to your share savings account and taxed only when withdrawn from this account. Losses are only deductible when the share savings account is closed.
You can have as many share savings accounts as you like, either with different providers, or the same provider.
Share savings account can be provided by banks, securities companies and management companies for securities funds.
Transfer of shares and mutual funds between share savings accounts (applies from and including 2019)
You can transfer securities in an ASK account from one share savings account to another without having to pay tax. This applies to both transfers between accounts from the same provider and transfers between accounts from different providers. It also applies to shares that were legal to keep in a share savings account at the time of investment, but that has changed character after the shares were deposited to an ASK account; e.g. if a company was resident in an EEA state at the time of investment, but relocated to the USA after the share had been deposited to an ASK account. The transfer must have fiscal continuity. For such transfers, a share of your deposit and unutilised risk-free return from previous years on the paying account is transferred simultaneously to the receiving account. The deposit and unutilised risk-free return is transferred proportionally to the transfer of values from the paying account.
What kind of securities can you have on a share savings account?
The account can be used to invest in listed shares domiciled in the EEA and units in mutual funds in companies domiciled in the EEA. A mutual fund is a securities fund with a share component exceeding 80 percent at the beginning of the income year.
You can have cash in a share savings account, but interest will not accrue.
What kind of securities can you not have on a share savings account?
You cannot invest in money market funds through your share savings account. Please note that several companies listed on Oslo Stock Exchange are not domiciled in the EEA and therefore do not qualify.
When shares and funds you invested in no longer qualify for being kept in an ASK account
Shares and funds you invested that qualified for being kept in an ASK account at the time of purchase may be kept in an ASK account. This applies even if the company or fund no longer is domiciled in the EEA or if the share component is less than the required percentage.
Part A buys shares in company B, who at the time of purchase is a Norwegian company. The company then relocates to the USA. In such a case, the share does not have to be taken out of the ASK account, and it does not mean that the share is realised. When the share is realised, gains/losses are treated as if it still was a company within the EEA for this shareholder.
Part A buys shares in a securities fund in 2018 when the share component is 89 percent. At the start of 2019, the fund composition has changed and the share component is 0 percent. Part A can still keep the units in the ASK account, and upon realisation/distributions these amounts are taxed in the same way as shares in a mutual fund.
Part A buys shares in a listed company and keep them in an ASK account. The company is later unlisted. Part A can still move these shares to another share savings account that he owns without triggering taxation since the shares were listed at the time of investment, see section 10-21, subsection 7, of the Taxation Act.
Asset dividends that cannot be kept in the share savings account
Dividend from shares legally kept in share savings accounts may be distributed in the form of assets that cannot be kept in the share savings account. This could for instance be dividends in the form of shares in a company domiciled outside of the EEA. These assets must be withdrawn immediately from the share savings account. The assets are taxed in accordance with the rules concerning withdrawals from share savings accounts.
When withdrawing the assets from the account, use the value of the asset as of the distribution date.
Deduction for risk-free return on a share savings account
The deduction for risk-free return is a deduction that reduces your taxable share income (read more about this deduction at skatteetaten.no under “the shareholder model”). The deduction is determined by multiplying the basis for the deduction for risk-free return by a risk-free interest rate.
For shares/units in a share savings account, the basis for risk-free return is based on the account holder’s deposits in the account. That means the sum of deposited cash, shares and units in mutual funds. This is considered a simplification in comparison to the rules for risk-free return applicable to shares not deposited in a share savings account. For securities kept in a share savings account, it’s not necessary to calculate the risk-free return on each share/unit, or keep track of FIFO (the principle that the shares that were purchased first are considered to be sold first).
The determined deduction for risk-free return can be deducted both from taxable withdrawals and from taxable dividend distributions made before 2019.
During the income year, many deposits to and withdrawals from the account may occur. The basis for risk-free return is set to the lowest deposit balance in the account during the year, plus unused deduction for risk-free return for previous years.
When you open a share savings account, it can be challenging to transfer funds, shares and cash simultaneously. Here, some discretion will be shown so that there is room to see these transfers in context if there is a short time between the transfers and the orders for transfers.
Withdrawals from the share savings account
When shares/units are transferred from the share savings account to the account holder, this is considered as a withdrawal from the account. The withdrawal is set to the market value of the share/unit at the time of transfer. The withdrawal is not taxed until the amount exceeds the amount you deposited (total cost price) to the account. Withdrawals reduce the basis for risk-free return.
Taxed dividends deposited directly to the share savings account (only applicable to distribution of dividends from 2017 and 2018)
Such dividends distributed in 2017 and 2018 deposited into the share savings account, are treated as deposits and will increase the basis for risk-free return.
Transitional rules for 2017, 2018 and 2019
The transfers of shares/units from the account holder to the share savings account, are taxed as if the share/unit is realised (sold). This is fully applicable from 2020 onwards. The shareholder is taxed for gains and gets a deduction for losses. The transfer is considered a deposit into the account. The size of the deposit is set to the value of the share/unit that is the basis for calculating gain/loss.
To ease the transition to the share savings account scheme, transitional rules were determined for the years 2017, 2018 and 2019. The transitional rules for these years made it possible to transfer shares and units in mutual funds with fiscal continuity without realisation taxation.
Reporting on the tax return
The provider of the share savings account is responsible for reporting the tax values of the share savings account. Tax liable withdrawals and assets should be pre-filled in your tax return. You must check that the pre-filled information is complete and correct.
Peter has a share with an input value of NOK 10 and fair market value of NOK 20. He transfers this share to a share savings account in 2018 with full continuity, untaxed.
The input value on the share savings account is NOK 10 (this can be withdrawn tax-free). He then deletes the share savings account and takes over the shares again. Peter will then be taxed on the shares he withdraws from the share savings account. He receives a NOK 20 asset and is taxed on a gain of NOK 10.
The new input value of the share which is now in the Tax Administration's Register of Shareholders in the normal way will be NOK 20.
Peter owns 1 share A with an input value of NOK 10 and fair market value of NOK 20. Peter also owns 1 share B with an input value of NOK 100 and fair market value of NOK 100.
These are placed in a share savings account with untaxed continuity and the total input value of the share savings account will then be NOK 110 (this can be withdrawn tax-free).
Peter then transfers share A to a separate account. He withdraws a NOK 20 asset, but is not taxed.
The new input value of the share savings account will be NOK 90 (this can be withdrawn tax-free).
The new input value of share A in the register of shareholders will be NOK 20.
The gain Peter made on share A will be taxed when he settles the share savings account or withdraws assets beyond the remaining input value of NOK 90.
The basis for deduction for risk-free return is set at the lowest deposit balance on the account over the year
What will be the basis for deduction for risk-free return here? A person makes these deposits in 2018
January: NOK 500
April: NOK 500
July: NOK 500
September: NOK 200
And these withdrawals
May: NOK 300
December: NOK 300
The basis for deduction for risk-free return here will be NOK 500 since that is the lowest deposit balance over the year. After the deposit in April, he has deposited NOK 1,000. After the withdrawal of NOK 300 in May, the remaining deposited total is NOK 700. NOK 500 is therefore the lowest total.
What is the lowest deposit balance on the account if an account with one provider is transferred to an existing account with a different provider?
Minimum value during the year
Here you need to look at the lowest deposit balance for each individual account before the transfer. The basis for deduction for risk-free return here will be NOK 70,000.
Can shares with assessed exit tax be transferred to an ASK account without triggering taxation?
Starting from 2020, this will trigger taxation. For the years 2017, 2018 and 2019, the transitional rule allowed such transfers without realisation taxation.
Can shares with assessed exit tax be realised in the ASK account without triggering exit taxation?
No, this means the final taxation/payment obligation is triggered when realising the shares on the ASK accounts. This is because the shares are no longer “intact”, a requirement of the exit rules to avoid tax on latent gains.
Can you pledge a share savings account?
The special rules that applies to share savings accounts are not an impediment to this.
Can you have subscription rights on the share savings account?
The Norwegian Tax Administration finds that it’s practical to acquire subscription rights in connection with share ownership and that in some cases these have close connection with the shares. We do not object to keeping subscription rights in a share savings account, but for tax purposes, they are kept completely out of the scheme.
What happens when the owner of a share savings account dies?
Upon death, the share savings account can be transferred to the heir with fiscal continuity. The surviving spouse can also keep the share savings account with fiscal continuity in an undivided estate. The entire share savings account must be transferred. When transferring to the heir's share savings account in connection with the distribution of the estate, you can transfer selected securities with fiscal continuity without having to transfer the entire share savings account.
Can a share savings account be gifted?
A share savings account can be gifted if it’s done with fiscal continuity. The entire share savings account must be transferred.
Lending shares from an ASK account – Is it possible to lend shares from a share savings account without this being considered a realisation?
No, if you lend shares, you're no longer the private-law owner of the shares. Lending shares follow the rules concerning withdrawals from share savings accounts.
Can a share savings account be co-owned?
No, a share savings account is a personal account and may not be co-owned.
How do we report coupon tax/withholding tax on ASK from 2018?
In a case where the company is paying NOK 100 in dividends, but the Norwegian shareholder receives NOK 85 after having been deducted NOK 15 in withholding tax, reporting ASK will be as follows:
NOK 85 is to be treated as a deposit in the ASK account, which can later be withdrawn tax-free.
Investors must themselves claim a credit deduction for NOK 15
Can I choose continuity for some shares and not for other shares when transferring? For instance to choose continuity for shares with gain and discontinuity for shares with loss? (The transitional rules applied to the years 2017, 2018 and 2019)
In accordance with the transitional rules, the taxpayers could choose which shares to transfer with continuity, and which shares to transfer with discontinuity. Then, the taxpayer could choose to transfer shares with unrealised gains with continuity, while the shares with unrealised loss could be transferred with discontinuity. When transferring shares with loss/units with discontinuity, the loss will be considered as realised and the taxpayer is entitled to a deduction for the loss when transferring to ASK. The shares’/units’ input value for ASK in cases of discontinuity will be the market value upon transfer.
Do we get share discounts when calculating the tax value of cash held in a share savings account?
The assets in the account are subject to wealth tax in the same way as cash, shares, equity certificates and units owned outside the scheme, see the guide Skatte-ABC (in Norwegian only) and the topic “Aksjer - formue” (shares - wealth), point 3.4 and the topic “Verdipapirfond” (securities funds), point 2. This means that cash in the account is not eligible for a wealth discount, but is included in it’s entirety as a part of the total wealth. Shares and units in mutual fund are eligible for a wealth discount as if they were owned outside the share savings account.
Do we always have to follow the FIFO principle when transferring shares to the share savings account, including when some of the shares are transferred with continuity and some with discontinuity?
Yes, the FIFO principle (First-In-First-Out principle) must always be followed when transferring shares to the share savings account.