Information about donations via dividends
How to make a tax-free donation to Karolinska Institutet
For shares in listed Swedish VPC-registered companies, the gift becomes final when the dividends are registered to the recipient in a special record. If the donation was made prior to the shareholders’ decision meeting regarding dividends, the donation is considered to have been made before the dividends were distributable.
When it comes to shares in proprietary companies, you must waive your right to dividends before the shareholders meeting determines the size of such dividends. Such a waiver can be made in a deed of gift transferring the rights to dividends by dividend warrant. Legal entities cannot transfer the rights to dividends tax-free.
Decide which dividends to donate and how much of them to give away. The following applies if you have a securities account:
In order to donate the dividends, you must specify Karolinska Institutet as the recipient of the dividends (“the rights holder”). Ask your bank for the form “Anmälan om Rättighetshavare” (Notification of Rights Holders) and submit the completed form to the bank. In the form, you can specify which research area you would like to support, or whether your donation shall benefit Karolinska Institutet centrally.
The following applies if you have safe-custody holdings with a bank or securities trader:
Talk to your bank or securities trader for more information about the rules that apply in your case. Fill out a Deed of Gift form and submit it to your bank or securities trader.
The following applies if you are donating dividends for shares in an unlisted company:
The company can issue dividend warrants, each of which represents the right to dividends corresponding to a certain stock certificate for a specific accounting period. The dividend warrants can be attached to a counterfoil made out to the holder. Fill out a Deed of Gift form.
About the income tax return
The Swedish Tax Agency will receive information about the donation from your bank. You can provide information about the donation under “särskilda upplysningar” (special information) in your tax return. It may be a good idea to save the documentation from the transfer of the dividend rights.
If you are a shareholder in a proprietary company and report dividends using the K10 form, any dividends that have been donated may be included in next year’s saved dividends. This means that less tax is payable for corresponding dividends in a later year.
Frequently asked questions
Will Karolinska Institutet be informed of the donation?
If your money is in a securities account, Karolinska Institutet will automatically be informed of your donation. If the shares are in safe-custody holdings with a bank or securities trader, it may mean that your donation will remain anonymous.
In the case of transfer via donation of dividends rights in an unlisted company, the donor is specified in the deed of gift.
What are the benefits of donating money via dividends?
Karolinska Institutet will receive a greater monetary value than what you would have had at your disposal. Normally, the tax rate for dividends on listed shares is 30 %, but if you donate the dividends to us, the entire amount will go to the research area you wish to support.
For shares in proprietary companies, the tax rate varies. It may be 20 %, 25 % or approximately 57 %, depending on whether or not the shareholder has any qualified shares. It is also worth noting that the donated dividends, and the ones subject to a lower tax rate (20 %), may be credited as saved dividends and taken out, if they are distributable, at a lower tax rate in another year.
How does this affect my control as a shareholder?
The donation does not reduce your control as a shareholder as you are not giving away any shares. Nor does the donation of dividends affect the stock market price as the selling of shares may do.
When in the year can I decide to donate dividends?
Listed shares are connected to an account-based system and the dividends on shares are given to the person who is registered in the share register or special record on the record date. The donation must therefore have been registered before the record date in order for the dividends to be credited to Karolinska Institutet.
For dividends in companies other than listed ones, the holder of the dividend warrant is entitled to take out the dividends. The donation shall then have been transferred before the shareholders’ meeting decides the dividends.