When you hold your investments through a capital insurance, you avoid paying capital gains tax and instead pay a low annual standard tax, calculated on the total value of the investment. You are also exempt from declaring each individual transaction and can freely choose who will inherit the insurance holdings without the need for complicated wills. Note that qualified shares cannot be transferred into the insurance. Capital insurance is a type of life insurance that can be opened by both individuals and companies. In a capital insurance, you can hold a variety of investments and are taxed annually based on the insurance’s total value and premium contributions made during the year, without the possibility of deducting losses. This differs from, for example, a stock account, where gains on unlisted shares are taxed at 25%, and losses can be deducted. The tax rate for capital insurance in 2024 is 1.086%.

By using a capital insurance for investments, you also avoid declaring each individual purchase and sale. This is also suitable for wealth planning across generations, where profits are reinvested to maximize returns, and the policyholder maintains control over the distribution of the inheritance. With a capital insurance, you can bypass the standard inheritance order and freely choose who will inherit your assets—without relying on complicated wills or statutory inheritance structures. A capital insurance keeps your investments out of public registers while you retain full ownership rights. This is achieved by registering the insurance company as the owner of the underlying assets, meaning your ownership status no longer appears in public share registers or prospectus records.

Taxation on Unlisted Shares for Individuals and Companies

If you invest in unlisted shares through a company or holding company, it is generally not suitable to hold the shares through a capital insurance, as profits from business-related shares are tax-free. However, for individuals, a 25% tax is applied both on dividends from unlisted shares and on the sale of such shares. Note that qualified shares cannot be transferred into the insurance.

Control and Voting Rights

When transferring investments into a capital insurance, it is common to lose the ability to actively participate in shareholder meetings and vote on your holdings. You will also need to coordinate with several different parties. The most common setup involves an insurance company, an insurance broker, a valuation institute, and a depositary. However, there are alternatives, as outlined below, where you only need a single point of contact, while still retaining full control over your investments and the ability to participate in shareholder meetings and votes.

Unlisted Shares in Capital Insurance

Although capital insurance for unlisted assets has its limitations—many providers on the market only accept Euroclear-registered shares—the Swedish insurance distributor Hubins accepts all types of unlisted shares, regardless of whether they are issued via physical share certificates or registered in a share ledger (including eAktiebok). However, to transfer these shares, an updated valuation is usually required, such as through a new share issue or an external valuation.