My older brother once said “Never cheat Her Majesty’s Revenue and Customs.” Many an individual was eventually brought down by their desire to do just that. Personally, I believe if I use roads, the N.H.S., the state school system or any other number of state paid services this country currently enjoys, what gives me the right to think I’m so uniquely special that other people have to pay for it and yet somehow I don’t?
The word “snowflake” comes to mind. I believe there’s no difference between that attitude and going up to my fellow man in the street and lifting £50 from his wallet. If we desire more money in the UK, we can usually work for it and invest in assets, small and large, that work for us.
While working in the legal world, I was also a trustee to an international children’s charity. Having worked with and visited partners in countries that have no discernible infrastructure for the average citizen I’m regularly amazed at the beauty, efficiency, and sense of fair play in our state services.
Sure, we can always find fault and, sure, some could be run better. But seeing children and women in 90’s South Africa walk miles at night along dangerous roads, with no pavements or street lights just to get to work on time, made me appreciate the simple beauty of a curbed well kept pavement with my children safely besides me.
So, this blog is not about avoiding Tax but using the normal legal paths that exist in Gold and Silver investing to pay only when we need to, not unnecessarily, when we don’t. This information may also help inform Bleyer’s customers on one product choice over another, for example.
Gold: VAT exempt
Most of the Gold you will come across in dealing with Bleyer will be legally Tax Exempt Gold. That’s because it is “investment gold.” The following information is taken from the horse’s mouth at HMRC.
Investment gold is exempt from VAT. Investment gold is:
- Gold of a purity not less than 995 thousandths that is in the form of a bar, or a wafer, of a weight accepted by the bullion markets.
- An investment gold coin as specified in Notice 701/21A Investment gold coins.
- A gold coin minted after 1800 that:
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- is of a purity of not less than 900 thousandths
- is, or has been, legal tender in its country of origin, and
- is of a description of coin that is normally sold at a price that does not exceed 180 per cent of the open market value of the gold contained in the coin
No Jack Sparrows
There is an unintentionally funny paragraph on the HMRC website on smuggled gold. Just make sure you buy from a reputable bullion dealer, such as Bleyer, as all smuggled gold is “liable to forfeiture” even if found “in the hands of an innocent purchaser.”
If you are interested in investing in precious metals without paying VAT, talk to us about our off-shore VAT free storage facilities.
Capital Gains Tax Free
So, Investment Gold will save you VAT when you buy. But did you know that some Gold and Silver coins will save you Capital Gains Tax when you sell?
All British “coins of the realm” are CGT free. These include all Britannia coins, regardless of size or whether Gold or Silver (note Silver is not VAT exempt however). This category also includes Gold Sovereigns, as these are also classed as “coins of the realm.”
If you are an international client, look for your national mints coin to see which coins are legal tender and therefore CGT exempt in your country of residence. If you’re not sure, give one of the Bleyer Team a call on 01769 618618.
Gold Tax Loopholes no longer available
If you are an employer just be aware that the following tax loophole is no longer available:
Payments-in-kind was a former tax loophole that has been rendered obsolete by tighter regulation. Previously, it was possible for executives to receive their payments “in kind” – so rather than receiving a regular wage, they would instead be paid in valuable, tradable commodities, such as gold or other consumer goods and benefits.
Despite its advantages, the system had an obvious flaw in that being paid with a truckload of gold bars every month would overload even the most powerful executive’s car. There’s a reason we started using money in the first place, after all. (Accounting-Degree.org)
And finally, would you like a Gold Coin or a Snickers Bar?
Reducing Tax paid on Gold and Silver purchases is a little like choosing a Gold Coin over a Snicker Bar; if offered and causing no deterrent to others, why not choose an item that increases our benefit? You’d think wouldn’t you – click here for a shocking yet humorous look at how the majority of people still don’t understand the value of physical Gold and Silver.
Call Bleyer on 01769 61868 to find out even more ways that investing in Physical Gold and Silver can benefit you and your family.
