--- title: Long-term effect of court decisions on passive ownership description: In January 2010, the Supreme Administrative Court issued five decisions, all of which addressed the issue of the manner in which the term ”same or similar operations” in the closely held companies regulations are to be interpreted. These decisions have been called, in popular parlance, “the lying fallow status decisions” and imply, simply speaking, that capital transferred from an active closely held limited liability company to another, passive limited liability company, cannot be seen to “lie fallow” (for tax purposes) as long as the partowner, or any closely related entity, continues to be active in the original company. image: https://blogg.pwc.se/hubfs/kvinna_skrivbord.jpg --- [![pwc-logo-1](https://blogg.pwc.se/hs-fs/hubfs/Imported%20sitepage%20images/pwc-logo-1.png?width=200&name=pwc-logo-1.png)](https://blogg.pwc.se/) ## Tax matters - Sweden's tax blog [‹ Back to the articles](https://blogg.pwc.se/taxmatters-en) 13 April 2016 | [Entrepreneur and SME Taxes](https://blogg.pwc.se/taxmatters-en/topic/entrepreneur-and-sme-taxes) # Long-term effect of court decisions on passive ownership Contact [Andreas Stranne](https://blogg.pwc.se/taxmatters-en/author/andreas-stranne) Reading time: 2 min ![Kvinna vid dator](https://blogg.pwc.se/hs-fs/hubfs/kvinna_skrivbord.jpg?width=900&name=kvinna_skrivbord.jpg) In January 2010, the Supreme Administrative Court issued five decisions, all of which addressed the issue of the manner in which the term ”same or similar operations” in the closely held companies regulations are to be interpreted. These decisions have been called, in popular parlance, “the lying fallow status decisions” and imply, simply speaking, that capital transferred from an active closely held limited liability company to another, passive limited liability company, cannot be seen to “lie fallow” (for tax purposes) as long as the partowner, or any closely related entity, continues to be active in the original company. By ”lying fallow” in this context is meant that a closely held limited liability company has been passively managed with the result that the profit from the shares in that company, after five years of passive management, can accrue to the previously active partowner at 25 percent taxation. This is because the shares, after this five year period, have gone from comprising qualified shares to nonqualified shares. After the “lying fallow” decisions were announced, a number of other decisions have been announced which further complicates the assessment as to whether shares, in these situations, are to be seen to be qualified or nonqualified. In addition, the new practice as regards the so-called passive ownership rule has also added to the difficulty in assessing whether a given share is to be seen to be qualified or nonqualified. Now in 2016, it has been six years since the legal practice regarding the ”lying fallow” rules changed due to the ”lying fallow” decisions (Yearbook of the Supreme Administrative Court 2010, ref. 11 I,II,II,IV and V). Consequently, it is extra important to ensure that the dividend/capital gains from a closely held limited liability company impacted by the ”lying fallow” decisions is correctly handled in this year’s income tax return. Contact your advisor at PwC for a correct assessment and future tax strategy. [![Do you have any questions on entrepreneur and SME Taxes?](https://hubspot-no-cache-eu1-prod.s3.amazonaws.com/cta/default/315629/c273b38c-1ad1-401a-9d49-1fed54709b61.png)](https://hubspot-cta-redirect-eu1-prod.s3.amazonaws.com/cta/redirect/315629/c273b38c-1ad1-401a-9d49-1fed54709b61) ![Andreas Stranne](https://blogg.pwc.se/hubfs/andreas_stranne.jpg) ### [Andreas Stranne](https://blogg.pwc.se/taxmatters-en/author/andreas-stranne) Andreas Stranne arbetar på PwC:s kontor i Göteborg med nationell och internationell företagsbeskattning med särskild inriktning mot bland annat fastighetsbranschen. Kontakt: 010-213 14 47, [andreas.stranne@pwc.com](mailto:andreas.stranne@pwc.com) ## Subscribe to Tax Matters Get the latest news, directly to your inbox [Yes, I'd like to subscribe to Tax matters](https://cloud.email.pwc.se/tm-en-hubspot) ## Contact a tax advisor Do you need more information or do you have a question? [Get in Touch](https://www.pwc.se/kontakt) [Corporate taxation](https://blogg.pwc.se/taxmatters-en/topic/corporate-taxation) [Value Added Taxes, customs and excise duties](https://blogg.pwc.se/taxmatters-en/topic/value-added-taxes-customs-and-excise-duties) [Individual taxation](https://blogg.pwc.se/taxmatters-en/topic/individual-taxation) [Entrepreneur and SME Taxes](https://blogg.pwc.se/taxmatters-en/topic/entrepreneur-and-sme-taxes) [Recommended](https://blogg.pwc.se/taxmatters-en/topic/recommended) [Base Erosion and Profit Shifting (BEPS)](https://blogg.pwc.se/taxmatters-en/topic/base-erosion-and-profit-shifting-beps) [Seminars and courses](https://blogg.pwc.se/taxmatters-en/topic/seminars-and-courses) [Tax rules and regulations](https://blogg.pwc.se/taxmatters-en/topic/tax-rules-and-regulations) [Legal](https://blogg.pwc.se/taxmatters-en/topic/legal) [Pension](https://blogg.pwc.se/taxmatters-en/topic/pension) [Rekommenderad](https://blogg.pwc.se/taxmatters-en/topic/rekommenderad) ### What do you want help with? - [Services](https://www.pwc.se/en/services.html) - [Consulting](https://www.pwc.se/en/services/consulting.html) - [People and Organisation](https://www.pwc.se/en/services/consulting/people-organisation.html) - [Risk Management](https://www.pwc.se/en/services/risk-management.html) - [Audit and Assurance](https://www.pwc.se/en/services/audit-and-assurance.html) - [Tax](https://www.pwc.se/en/services/tax-sweden.html) - [Legal](https://www.pwc.se/en/services/legal.html) ### Doing business in Sweden - [Doing business in Sweden](https://www.pwc.se/en/business-sweden.html) - [Type of precense](https://www.pwc.se/en/business-sweden/type-of-presence.html) - [Tax issues](https://www.pwc.se/en/business-sweden/taxes-sweden.html) - [Operational matters](https://www.pwc.se/en/business-sweden/operational-matters-sweden.html) - [Registration requirements](https://www.pwc.se/en/business-sweden/registration-requirement-sweden.html) - [Compensate our employees](https://www.pwc.se/en/business-sweden/compensate-employees.html) ### About PwC - [About us](https://www.pwc.se/en/about-us.html) - [Offices](https://www.pwc.se/sv/kontor.html) - [Global pressreleases](https://press.pwc.com/) © 2018 - 2026 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see [www.pwc.com/structure](https://www.pwc.com/structure) for further details. - [Integritetspolicy](https://www.pwc.se/integritetspolicy) - [Cookies](https://www.pwc.se/cookies) - [Legal](https://www.pwc.se/sv/om-pwc/ansvarsfriskrivning.html) - [Site provider](https://www.pwc.se/siteprovider) ```json { "@context" : "https://schema.org", "@type" : "WebSite", "name" : "PwC", "potentialAction" : { "@type" : "SearchAction", "query-input" : "required name=search_term_string", "target" : "https://blogg.pwc.se/search?term={search_term_string}" }, "url" : "https://blogg.pwc.se" } ``` ```json { "@context" : "https://schema.org", "@type" : "WebPage", "name" : "Long-term effect of court decisions on passive ownership", "url" : "https://blogg.pwc.se/taxmatters-en/long-term-effect-of-court-decisions-on-passive-ownership" } ``` ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "Andreas Stranne", "url" : "https://blogg.pwc.se/taxmatters-en/author/andreas-stranne" }, "dateModified" : "2021-01-04T10:17:44+0000", "datePublished" : "2016-04-13T09:31:20+0000", "description" : "In January 2010, the Supreme Administrative Court issued five decisions, all of which addressed the issue of the manner in which the term ”same or similar operations” in the closely held companies regulations are to be interpreted. These decisions have been called, in popular parlance, “the lying fallow status decisions” and imply, simply speaking, that capital transferred from an active closely held limited liability company to another, passive limited liability company, cannot be seen to “lie fallow” (for tax purposes) as long as the partowner, or any closely related entity, continues to be active in the original company.", "headline" : "Long-term effect of court decisions on passive ownership", "image" : "https://info.pwc.se/hubfs/kvinna_skrivbord.jpg", "keywords" : "Entrepreneur and SME Taxes", "mainEntityOfPage" : { "@id" : "https://blogg.pwc.se/taxmatters-en/long-term-effect-of-court-decisions-on-passive-ownership", "@type" : "WebPage" }, "publisher" : { "@type" : "Organization", "name" : "PwC" } } ``` ```json { "@context" : "https://schema.org", "@type" : "BreadcrumbList", "itemListElement" : [ { "@type" : "ListItem", "item" : "https://blogg.pwc.se", "name" : "Home", "position" : 1 }, { "@type" : "ListItem", "item" : "https://blogg.pwc.se/taxmatters-en", "name" : "Tax matters - Sweden's tax blog", "position" : 2 }, { "@type" : "ListItem", "item" : "https://blogg.pwc.se/taxmatters-en/long-term-effect-of-court-decisions-on-passive-ownership", "name" : "Long-term effect of court decisions on passive ownership", "position" : 3 } ] } ```