What is the ISK Capital Base?
The taxable capital base for your Swedish Investment Savings Account (ISK) is calculated based on two components:
- The total value of assets held in your account at the beginning of each quarter; and
- The sum of all deposits made to the account during that quarter.
Keeping unnecessary cash in your ISK at the end of a quarter will therefore increase your capital base — and consequently your tax liability — for the following quarter.
What is the Auto-Sweep?
At the end of each quarter, Interactive Brokers automatically sweeps any uninvested cash out of your ISK account. This is designed to optimize your taxable capital base going into the following quarter by ensuring that idle cash does not unnecessarily inflate it.
How Does It Work in Practice?
Consider the following example. At the end of Q1, your ISK account holds:
- 47,350 SEK in investments
- 3,720 SEK in uninvested cash
- Total account value: 51,070 SEK
With Auto-Sweep (default)
The 3,720 SEK is automatically swept out of your ISK before Q2 begins. Your Q2 capital base starts at 47,350 SEK. If you choose to reinvest the 3,720 SEK later in the quarter, it will be treated as a new deposit and will be added to the capital base at that point. However, if you do not reinvest it, the capital base remains at 47,350 SEK for the entirety of Q2.
Without Auto-Sweep
The 3,720 SEK remains in your ISK, and your Q2 capital base starts at 51,070 SEK — regardless of whether you intend to invest that cash or not.
Is the Auto-Sweep Tax-Neutral?
The auto-sweep is designed to give you greater control over your tax position:
- If you reinvest the swept cash back into the ISK during the quarter, it will be counted as a deposit and the capital base will be the same as if the sweep had never occurred — making it tax-neutral.
- If you leave the cash outside the ISK, your capital base remains lower than it would otherwise have been — making the auto-sweep tax-advantageous.
In short, the auto-sweep reduces your default taxable capital base by removing idle cash at the end of each quarter. You are never worse off as a result of the sweep, but you may benefit significantly if you choose to keep the funds outside the ISK.
For further information, please visit our ISK Account page or refer to our FAQ.
The material contained herein is for general information only and is not intended to serve, and should not be construed as, tax, legal or investment advice. Please consult your own advisors.