Moving to Norway for 5 Years: How Wealth Tax Works, and Which US Annuity Actually Helps

Written by Hans Goldstein, EA, licensed insurance agent · CA 4273294
Admitted to practice before the IRS
Updated October 2026

My mom is Norwegian and my dad is American, so I have spent a lot of time on one question families keep asking me: we are moving to Norway for a few years, and we have savings in the US. Does the wealth tax eat into that, and can an annuity fix it? The honest answer is yes and yes, but not the annuity most people think of.

This page is for someone who will live in Norway for about 5 years and then come back. If you are moving for good, start with Norway wealth tax for Americans instead.

How the Norwegian wealth tax hits US savings

Once you are tax resident in Norway (more than 183 days in any 12 months, or more than 270 days in 36 months, skatteloven § 2-1), you pay formuesskatt on your worldwide net wealth as of December 31 each year. Your US bank accounts, brokerage accounts and bonds all count.

Source: Skatteetaten wealth tax rates 2026. Dollar figures use USD/NOK 9.6494 (Norges Bank, 2 October 2026), held flat; $1,000,000 = NOK 9,649,400. On $1 million in the bank, a single person pays about NOK 77,494 a year, or about $8,031, before any tax on the interest.

How the insurance company “takes” your money, and why that lowers your net worth

When you buy a single premium annuity, the premium stops being your money. It becomes the insurer’s asset, on the insurer’s balance sheet. What you own is a contract: a promise to pay you on a schedule. If that contract has no surrender value, you cannot cash it in, so there is nothing for a tax office to count at its cash value on December 31.

Norway’s law then decides whether that promise counts anyway:

• Skatteloven § 4-2(1)(c) exempts a “tidsbegrenset rett til periodisk ytelse”: a time-limited right to periodic payments.
• § 4-2(2) pulls a life annuity (livrenteforsikring) back into wealth, but only “forutsatt at forsikringen er tegnet i selskap som har eller har hatt tillatelse til å drive forsikringsvirksomhet her i landet”: only if the insurer has ever been licensed in Norway.
• Skatte-ABC F-24-2.1 (2025/2026) says it outright: “Livrenteforsikring tegnet i selskap som ikke har eller har hatt tillatelse til å drive forsikringsvirksomhet i Norge, anses ikke som skattepliktig formue.”

A US insurer that has never been licensed in Norway is outside that pull-back. So a life annuity from it is not taxable wealth. A 5-year or 10-year “period certain” annuity has no life contingency at all, so it is not a livrenteforsikring under Forsikringsavtaleloven § 10-2, and it very likely falls under the § 4-2(1)(c) exemption. No ruling covers a US period-certain contract yet, so treat that as likely, not settled. One small detail: a payment that is due but not yet paid on December 31 always counts (Skatte-ABC F-24-2.6).

Do not buy a product from an insurer licensed in Norway to make servicing easier. That flips the result: Skattedirektoratet held such an annuity taxable at surrender value, no-surrender clause or not (BFU 19/11, skatteloven § 4-16).

The catch: Norway taxes the whole payment

Here is what most articles leave out. For an annuity from an insurer never licensed in Norway, Skatte-ABC F-24-5.1 says “er utbetalingen skattepliktig med bruttobeløpet”: the full payment is taxable income, including the part that is just your own premium coming back. Only Norway-licensed annuities get the relief that taxes the gain alone (skatteloven § 5-41). If a period-certain contract were treated as a kapitalforsikring instead, F-23-6.3.1 also taxes the gross amount for an insurer outside the EEA.

A privately bought annuity is not part of an employment pension, so it should be taxed as ordinary income at 22%, not as personinntekt with bracket tax (skatteloven § 12-2). Confirm that reading with a Norwegian tax adviser.

That gross taxation is the whole story for a short stay. The wealth tax you save is about 1% a year. The income tax you add can be 22% of your own principal.

Before and after: $1 million, single person, 5 years in Norway

Assumptions: Dollar figures use USD/NOK 9.6494 (Norges Bank, 2 October 2026), held flat; $1,000,000 = NOK 9,649,400. Bank or bonds earn 4.5% (an assumption), interest taxed at 22%, wealth tax 1.0% above NOK 1.9M, no debt, you rent. Payouts are illustrative, not quotes: 5-year period certain $1,849 a month per $100,000 (MyAnnuityStore, updated October 8, 2026); 10-year period certain modeled at the same internal rate, about $1,020 a month per $100,000, because no published quote was available; life-only at 65 about $689 a month and at 70 about $714 a month per $100,000, male (ImmediateAnnuities.com survey of September 9, 2026). “Gross taxed” is how Skatte-ABC reads today. “Yield only” shows what would happen if Norway taxed only the interest inside each payment.

What the table says, plainly

• A 5-year annuity paid out in Norway loses. Taxed on the gross payment it ends about $229,000 behind simply spending down a bank account. Even in the yield-only reading it is a tie at best, because the annuity’s rate (about 4.2%) is below the 4.5% bank assumption.
• A 10-year annuity also loses on the gross reading, by about $87,000 after 5 years. In the yield-only reading it comes out about $11,000 ahead. That is a bet on how Norway classifies the contract, not a plan.
• A lifetime annuity is not a tax play. It is a paycheck for life with no wealth tax on it. Compare it on income, not on capital.
• The deferred income annuity is the one that pencils for a temporary move. Nothing is paid while you live in Norway, so there is no Norwegian income tax. It is not taxable wealth either (life-contingent, never-licensed US insurer, F-24-2.1). Once you have moved back, the US-Norway treaty says an annuity paid to a US resident “shall be taxable only” in the US (Article 18(2)). Compared with leaving $1 million in the bank, that is about $90,000 of Norwegian tax you never pay over the 5 years.

So, does it still pencil if Norway taxes the whole payment? For a period-certain annuity paid out while you live there: no. For a deferred annuity that pays after you leave: yes, because Norway never gets a payment to tax. For a lifetime annuity: only if you wanted lifetime income anyway.

How the deferred-income-annuity plan works

1. Buy before you move, while you have a US address and a US bank account. US insurers sell only to US residents in states where they are licensed.
2. Choose no cash value. A deferred income annuity with no surrender value is the version that stays out of the Norwegian wealth base. A deferred annuity with a cash value (a MYGA or fixed annuity) might be valued at its surrender value instead. No ruling covers a US MYGA, so I would not rely on one for this.
3. Set the first payment after your planned departure, with a cushion. Norwegian residence ends when you take up residence abroad, spend 61 days or fewer in Norway that year and have no home available there (Skatte-ABC U-19).
4. Keep other money to live on in Norway. The annuity pays nothing during the stay. Your salary, a pension or other savings cover the 5 years.
5. Plan for the trade-offs. The money is locked up, a life-only contract pays nothing to heirs unless you add a death benefit (which can change the analysis), and payments come in US dollars.

Which contracts fit. Most deferred income annuities are built around lifetime income: they pay for life, sometimes with a guaranteed period. A few US carriers also offer a deferred income annuity with no cash value that can pay for a set period only, for example wait 5 years and then pay for 5 or 10 years. That design matches a temporary move closely. Two things to check in the contract before you buy:

• Lump-sum or commutation features. Some contracts let you take several months of payments as a lump sum, or commute the remaining payments, once payouts start. Norway could treat a right like that as a surrender right, which is exactly what keeps the contract out of the wealth base. Ask for the version with no withdrawal or commutation right, or confirm the feature is optional.
• Death benefit during the waiting years. A return-of-premium death benefit protects your heirs, but a tax office could read it as an account value. Have a Norwegian tax adviser sign off on the exact contract.

Payout on a period-certain-only contract prices like a bond, so I compare it against a Treasury ladder before recommending it.

The 59½ question: no 10% penalty on an immediate annuity

A common worry for people in their 40s and 50s: annuity earnings taken before age 59½ usually carry a 10% federal penalty. An immediate annuity bought with non-retirement (non-qualified) money is an exception. IRC 72(q)(2)(I) exempts payments from an “immediate annuity contract”, which 72(u)(4) defines as a single premium contract with payments starting within one year and paid in substantially equal amounts at least yearly. So a 5-year or 10-year period-certain SPIA can pay you at 50 with no penalty. The penalty also only ever applies to the taxable part of each payment.

A deferred income annuity does not get that exception. With a 5-year wait, payments start more than a year after purchase, so 72(q)(2)(I) does not apply. The penalty simply does not apply if you are 59½ or older when payments start. If you are younger, the taxable part of each payment is penalized unless another exception fits, such as lifetime payments under 72(q)(2)(D), which a life-only payout normally meets and a 5- or 10-year period-certain payout likely does not. Simplest: buy at 54½ or older so the first payment lands after 59½.

The US side for a US citizen

• Still taxed by the US. You report the annuity on Form 1040 using the exclusion ratio (IRC 72(b)). On a 5-year period certain about 90% of each payment is your own money back and about 10% is taxable. The US side is light; the Norwegian side is the expensive one.
• Foreign tax credit gap. Under the treaty the annuity is US-source, and the US generally credits foreign tax only on foreign-source income. Norway credits the US tax instead (Article 23(2)(b)), so with Norway taxing the gross payment, the extra Norwegian tax is usually a real cost. Norwegian wealth tax is never creditable against US income tax (Article 23(1)). Get a cross-border CPA to run your numbers.
• Withholding. For payments from January 1, 2026, if your residence address on file is outside the US, the insurer must withhold federal tax no matter where the money is sent and even if you ask it not to (Treas. Reg. 31.3405(e)-1). It is a prepayment, settled on your return.
• Reporting. A US annuity is not reported on FBAR or Form 8938 and is not a PFIC. Norway still wants foreign financial products listed on your Norwegian return.
• Carriers. Lincoln Financial publishes an approved-country list for owners who spend more than 6 months a year abroad, and Norway is on it (guidelines as of July 1, 2024; the application must be signed in the US). Other carriers do not publish a policy, so I confirm with the carrier before you buy.

Is this legal tax planning?

The exception for insurers never licensed in Norway is written into the statute itself, and a lifetime or deferred income annuity has a real purpose beyond tax: income you cannot outlive. Norway does have a general anti-avoidance rule, skatteloven § 13-2, which looks at whether the main purpose of an arrangement was a tax benefit. I found no ruling applying it to a foreign annuity, and no ruling blessing it either. For a large amount, ask Skatteetaten for a binding advance ruling (bindende forhåndsuttalelse) or get a Norwegian tax adviser’s written opinion before you move. When my family called Skatteetaten about the annuity question, Skatteetaten itself suggested the advance ruling.

Where to go next

• Norway wealth tax and real estate: why a home you live in is taxed at 25% and cash at 100%.
• Wealth tax by country: where a US annuity is outside the base (Norway, Switzerland) and where it is not (Spain, Netherlands).
• Norway exit tax on IRAs and 401(k)s before you go.

I can show you what a deferred income annuity or a period-certain SPIA would pay for your age and the year you plan to return, and size it against what you need to live on in Norway. I am a US-licensed insurance agent and can only help while you still live in the US. I do not give Norwegian tax or legal advice. This page is general education, not tax advice for your situation.

Frequently asked questions

Related reading

• Moving to Norway from the US: the hub
• Norway wealth tax for Americans and the US annuity exception
• Norway wealth tax and real estate: why real estate is king
• US taxes while living in Norway
• Norway exit tax on IRAs and 401(k)s
• Wealth tax by country and US annuities
• Unngå formuesskatt når du flytter til Norge (norsk)

Sources

• Skatteetaten: Wealth tax rates 2026
• Lovdata: Skatteloven chapter 4 (sections 4-2, 4-10, 4-12, 4-16, 4-19)
• Skatteetaten, Skatte-ABC 2025/2026 F-24 Livrenteforsikring (F-24-2.1 wealth, F-24-5.1 income)
• Skatteetaten, Skatte-ABC 2025/2026 F-23 Kapitalforsikring (F-23-2.1, F-23-6.3.1)
• Lovdata: Forsikringsavtaleloven section 10-2 (kapitalforsikring and livrenteforsikring)
• Skattedirektoratet BFU 19/11 (annuity from an insurer licensed in Norway)
• Lovdata: Skatteloven chapter 5 (sections 5-1, 5-41)
• Lovdata: Skatteloven chapter 13 (section 13-2, anti-avoidance)
• Skatteetaten, Skatte-ABC U-19 (tax residence)
• IRS: United States and Norway income tax convention (Articles 18, 22, 23)
• 26 U.S.C. 72 (exclusion ratio; 72(q)(2)(I) and 72(u)(4) immediate annuity; 72(q)(2)(D) life payments)
• 26 CFR 31.3405(e)-1 (withholding for payees abroad, payments from January 1, 2026)
• Lincoln Financial: Annuity Foreign National Guidelines and approved countries (July 1, 2024)
• MyAnnuityStore: 5-year period certain payout, updated October 8, 2026
• ImmediateAnnuities.com: life-only payout by age (survey of September 9, 2026)