Can My Company Buy Gold?

A question we get asked fairly frequently is: Can my limited company buy gold?

So you have some extra profit in your limited company in cash from last year. Legally can you use that profit to buy gold in the name of the company?

With high inflation, relatively low interest rates and the threat of bank bail-ins, companies as well as individuals are becoming increasingly concerned about leaving too much cash in the bank.

We are also finding that companies are gifting precious metals to employees. They like the idea of giving a more meaningful bonus that just cash.

Can my Company Buy Gold?

Yes your company can buy gold as an investment. There are no restrictions that we are aware of on any legal entity, individuals, companies (private limited and otherwise) or trusts on holding gold.

There is no tax relief for the purchase of the gold as it would be considered a capital asset or investment. Any change in the value of the gold at the company’s year end would be added or deducted from profit.

Tax would only be payable when the gold is sold and a profit made. If a loss is made on the sale then the loss will be set against other profits to reduce them.

When you have decided what you’d like to do, we would always encourage running your thoughts past an accountant in case there are tax implications applicable to your situation that you need to consider.

 

Why Gold is a Good Investment

Gold has long been one of the most prized metals on Earth. It has played a major role in the economies of many countries, and used to be a form of currency.

The price of gold can fluctuate in the short-term, but in the long term it can out perform asset classes such as equities and property. You can view gold prices over time on the LBMA website.

Precious metals are often regarded as a hedge against inflation. They preserve purchasing power for long periods of time. Gold has long been considered a safe store of wealth.

The value of gold doesn’t move in the same way as bonds or stocks. Historically, stock market dips don’t appear to harm the price of gold. Therefore, it’s a good way to diversify your investment portfolio.

 

 

What are the Risks of my Company Buying Gold?

Like with any investment, investing in gold involves some risk.

We’ve outlined some of the key risks:

Price volatility – Gold’s price is ultimately determined by investor sentiment. If it is in demand, the price goes up, if it is out of favour, the price falls.

No yield – Gold isn’t a fixed-income investment like gilts or corporate bonds. It doesn’t pay any sort of yield and you’ll only see returns when you sell.

Theft – You need to look after gold very carefully. We can arrange secure storage for you and we also sell safes and cabinets.

Costs – It might end up costing you to store and insure it. You could also keep gold in a safe, but make sure to check your insurance position.

Here To Help

We recommend that all readers should speak to their accountant and do their own research before making any purchases, but if you’d like to speak to a member of the team for some additional guidance, we’d be delighted to hear from you at 01769 618 618, or you can email us at [email protected], and we’ll get back to you asap.

 

Contact us