Most of us have smaller loved ones we’d like to bless at some point in our lives, be that in our golden years (pardon the pun) or earlier as they reach key milestones in their lives.
Everyone has close and extended family to which they respect and love. We hear about people reuniting with their family on the daily basis in the media. I personally gained 25+ new relatives with the discovery of a maternal great aunt. Family can change, not just through more common events such as marriage, but we can also adopt non-blood relatives into our family circles.
If your estate is worth more than £325,000 (or £650,000 for married couples and civil partners), then it's likely some your hard-earned inheritance will pass to HMRC in Inheritance Tax (IHT) when you pass away. One of the most straightforward ways to make sure tax isn't charged unnecessarily is to give away assets while you are still alive.
Some of you may already be investing in gold and silver, but how can we share a little of this investment with family and younger loved ones? Learn 4 ways your gold investment will benefit your children and grandchildren in this article.
1. Own Physical Gold and Silver
If you have no physical precious metals at all, your first step is to make an order from a trusted bullion dealer. This may sound obvious, but if we don’t own any physical gold or silver ourselves, even without doing anything else, we have none to leave to those who continue after us.
Gold can be a very useful way to diversify your investment portfolio. It’s relatively rare and its value often doesn’t move in line with other assets such as equities or property. Physical gold is also worth holding because it’s a universal finite currency, held by most central banks as a financial backup, and as a way of safeguarding against economic turbulence and times of uncertainty.
Saving for your retirement or inheritance means you'll be investing in precious metals with a long-term investment strategy. This could be done by 'frontloading' once (or more) a year by investing in a larger sum in one go. This has its risks, as you could choose a particularly inflated time of year to buy.
You may instead decide to spread your costs out even more by purchasing physical metals on a regular basis. This way, if the price dips or rises throughout the year, you'll get the average cost price of the metal over the course of the year, regardless of what happened within the markets during that time.
In the way that renovating a family home isn't a get-rich-quick scheme, physical precious metal investment should not be regarded the same way. It can be used as a form of "saving for a rainy day" and for financial insurance. Gold is a good way to ensure wealth preservation and passing wealth from one generation to the next. So, firstly, own some Gold and Silver - an asset of timeless historical value - to pass on.
2. Give more to your Family, not the Tax Man
Ensure you start your probate proceedings early enough. If your estate is worth more than £15,000, this will apply to you. Use a solicitor or another person licensed to provide probate services. It's an area of law sadly not often enquired of until too late. The granting of probate is the first step in the legal process of administering the estate of a deceased person which looks at resolving all claims and redistributing the deceased person's property under a will.
Inheritance tax is a tax on money or possessions you leave behind when you die, and on some gifts, you make during your lifetime. If your estate is worth more than £325,000 when you die, your heirs will have to pay tax at the rate of 40%.
To value how much your estate is worth, you'll need to:
- List any assets you have and work out their value at a particular time (including property and savings)
- Deduct the value of any debts and liabilities at that particular time
For example, if your estate is worth £1,025,000 and your IHT threshold is £325,000, the tax charged will be on £700,000 (£1,025,000 - £325,000). The inheritance tax expected to pay on this would be £280,000 (40% of £700,000).
If this applies to you, consider gifting some Gold and Silver coins or bars throughout your life to the younger members of your family as an early way of passing down your precious savings.
Did you know: you can make gifts of up to £3000 in any tax year, without worrying about inheritance tax? Why not give your Gold and Silver away while you're still alive?
If you're careful, it will be easy for an executor of your estate to work out what parts of your estate are liable for tax during probate. You should also bear in mind that your gift could incur other types of tax, such as Income Tax or Capital Gains Tax. A gift of shares might incur Income Tax, so make sure you get the correct legal advice and talk about this with your solicitor.
If you’re giving away money or assets to reduce Inheritance Tax, it’s very important you make a record of:
- What you gave
- Who you gave it to
- When you gave it
- How much it was worth at the time
3. Capital Gains Tax and VAT Free Gold Gifts
The brilliant news, as UK legal tender, is that all investment gold is exempt from VAT. Silver incurs VAT but remains exempt from Capital Gains Tax.
The following are the most popular UK gold coins exempt from VAT and Capital Gains Tax:
- Gold Britannia (in all sizes)
- Gold Sovereign (in all sizes)
- Gold Lunars (all designs, in all sizes)
- Gold Queen's Beast (all designs, in all sizes)
4. Gold and Silver are Low Maintenance
Many investments take expertise and time to manage. As much as we love our children and grandchildren, if we're active in our investment portfolios, it's probable that we'll miss our loved ones growing up, their exams, careers or raising young children.
Although the reasons for gifting gold are plenty, the most important is that gold is the one financial asset which is permanent. Gold isn't a burden if you play a long-investment game. It’s just always there. Good as gold, solid, brilliant, and unchanging. Its market price may go up or down in the short term, but its value is never in question.
Are your children ready for Gold? If they can think ahead and have the maturity to respect the physical presence of the basis for money itself, then gold ownership will be of value to them. In this way, gold and silver are investments that benefit our children and grandchildren not just monetarily but in the gift of time and lack of stress.
Buy Gold Bars and Gold Coins to protect your wealth and pass it on to your loved ones. Browse Bleyer’s Extensive Range of Gold and Silver bars and coins now. Call one of the team on 01769 618618 or email [email protected] if you'd like any further information.