Shares Held As Inventory Cannot Constitute A Line Of Business

On 10 June 2026, the Swedish Supreme Administrative Court (“HFD”) ruled, in case HFD 2026 ref. 31, that shares in a property-managing company that constitute inventory assets (Sw: “lagertillgångar”) in the holder’s hands under the rules on building operations cannot constitute a line of business (Sw: “verksamhetsgren”) under the Swedish Income Tax Act (1999:1229). The judgment can be read here.

Under the rules on transfers at undervalue, a transfer of an asset for consideration below market value is, as a main rule, subject to withdrawal taxation (Sw: “uttagsbeskattning”), i.e., the transferor is taxed as if the asset had been sold at market value. No withdrawal taxation is triggered if the conditions for a qualifying transfer at undervalue are met, one of which — where group contributions cannot be exchanged between the parties — is that the transfer covers the transferor’s entire business, a line of business, or an ideal share thereof.