On October 6, the Norwegian budget proposal for 2017 was released. In July, we wrote about the 2016 revised budget and tax approval in Norway and the 2017 proposal follows the original approach. The budget changes for 2017 look to strengthen the benefits of unit-linked life assurance as the only investment structure offering tax deferral for all asset classes at policyholder level. Life assurance will also benefit from the decreasing ordinary income tax rate.
The budget proposal for 2017 continues to implement the tax reform, and the corporate and ordinary income tax rates will be reduced from 25% to 24% and further to 23% in 2018. Share income will be taxed at 29.76% in 2017, which is up from 28.75% in 2016, with a further increase expected in 2018. A new savings regime as well as a wealth tax discount was introduced to encourage investments in shares and reduce distortions, due to tax favoured investments in real estate. The tax exempt risk free “shielding interest” (skjermingsrente) is proposed to be increased by 0.5 percentage points before tax.
The proposed net wealth tax reduction is encouraging long-term savings. Ultimately, the aim should be, according to the original tax reform proposal by the Scheel committee, to value all investment assets equally for wealth tax purposes in order to avoid distortions.
Benefits of a unit linked life assurance solution for the Norwegian investor
  • Single flexible wealth structuring solution capable of incorporating a diverse portfolio of assets.
  • The Luxembourg insurance framework offers a broad investment universe fitting to a sophisticated investor.
  • Well suited for succession planning with a possibility to create a legacy to transfer to the next generations.
  • Tax deferral at policyholder level for all asset classes until payment from the policy.
  • Well known structure benefiting from favourable tax regimes in Europe and beyond.
  • No exit tax consequences when leaving Norway.
  • The policyholder benefits from Luxembourg’s policyholder protection regime, which is one of the strongest in Europe.
  • Easy reporting - all documentation is provided by Lombard International Assurance, so no need for auditor assistance.
Should you have further queries on this development, please contact Marjanne Olesen or your usual Lombard International Assurance representative.