Gold and Silver investments

novazombie

If you buy physical silver in the UK do you have to pay VAT on top? Does this apply if you buy unallocated silver?
Why is Gold different? There is no extra to pay on physical gold?
Whats the smallest value Gold coins you can buy?

I am new to this and would be very grateful for someone experienced to advise.

I want to put some of my money into Gold and Silver before the price goes back up and need to make some decisions as to whats best.

sdooley

Unless you're very lucky with your investment timing, you'll get hammered on the margins if you buy coins and sell them back to a dealer.

I don't know what the rule is with regard to VAT but would think you would pay a smaller margin (and no VAT) if you bought one of the exchange traded shares (or shares in a mining company).

But it is gambling (speculation) not investment (it produces no income, unlike shares or bonds).

novazombie

sdooley wrote: »

Unless you're very lucky with your investment timing, you'll get hammered on the margins if you buy coins and sell them back to a dealer.

I don't know what the rule is with regard to VAT but would think you would pay a smaller margin (and no VAT) if you bought one of the exchange traded shares (or shares in a mining company).

But it is gambling (speculation) not investment (it produces no income, unlike shares or bonds).

Thanks but Im in it for the long term investment. Im not interested in ETFs or shares.

You are right about getting hammered if you sell physical back any time soon but long term its just what I want for an investment.

Is there anyone on here who really knows their stuff?

alchemistkevin

sdooley wrote: »

But it is gambling (speculation) not investment (it produces no income, unlike shares or bonds).

I'm interested in this comment of yours.


Do you want to say the Govt, doesn't tax Gold buying?

I'm not very clear what you mean but certainly interested

cheerfulcat

novazombie wrote: »

If you buy physical silver in the UK do you have to pay VAT on top?

Yes.

Does this apply if you buy unallocated silver?

I've not looked into unallocated accounts but the institution offering the account should be able to answer that question.

Why is Gold different? There is no extra to pay on physical gold?

Ask Dawn Primarolo, who was in charge when VAT on gold was removed. The official reason is to " harmonise " gold dealing across the EU.

Whats the smallest value Gold coins you can buy?

I'm guessing that you mean what's the smallest amount you need to spend? The Iranian quarter pahlevi is listed on Goldline at £34-ish. Probably cheaper, if available, at taxfreegold.

I am new to this and would be very grateful for someone experienced to advise.

I want to put some of my money into Gold and Silver before the price goes back up and need to make some decisions as to whats best.

There's a decent introduction to investing in gold here.

jon3001

Well - I went the Silver ETF route because it seemed the cheapest (compared to spot) and most hassle-free. ETFs like PHAG are backed by physical metal held offshore with HSBC. I'm no expert on this subject matter but I did a reasonable amount of research before getting involved.

Silver

It's subject to VAT if you take physical ownership of it. It seem that unallocated accounts such as those run by Baird are not subject to VAT.
http://www.goldline.co.uk/unallocatedAccountsPage.page

I've no idea what Baird's margins on unallocated silver are but they seemed very steep on metal bars.

http://www.goldline.co.uk/investmentBarsPage.page
500g (about 16 troy ounces) goes is listed at £183 (inc VAT) which is £11.43/ozt. The spot price is £6.90/ozt.

The other unallocated account I've seen is the Perth Mint, Australia (backed by the Australian government) but you need a $50,000 initial investment.
http://www.perthmint.com.au/investment.aspx

Dealing in silver seems more expensive since it's a smaller market. It's subject to VAT because it's also an industrial metal and not much is used for investment purposes. You could probably save a bit if you imported but you'd still have to pay VAT when it arrives. It's the high margins that put me off the physical silver route.

Only investment gold is VAT-free. Gold jewelry is subject to VAT.

Gold

The smallest coins worth getting in terms of dealer margin and tax are British Sovereigns. British gold coins aren't subject to CGT whereas Krugerrands and the like are.

Bairds and Perth Mint also offer gold accounts.

The following might also be worth investigating:
http://www.goldmoney.com
http://www.bullionvault.com/

Some people are also using the Central Fund of Canada.
http://www.centralfund.com/

It's listed on the Toronto and US stock exchanges. It's not a share in a mining company but the company simply holds bullion at about 50% gold and 50% silver.

sdooley

alchemistkevin wrote: »

I'm interested in this comment of yours.


Do you want to say the Govt, doesn't tax Gold buying?

I'm not very clear what you mean but certainly interested

I said nothing about tax. The purchase of a metal is a speculation because it is a pure punt on the price going up.

With a share or bond you have the income.

alchemistkevin

sdooley wrote: »

I said nothing about tax. The purchase of a metal is a speculation because it is a pure punt on the price going up.

With a share or bond you have the income.

Thanks, I was just wondering if its possible to invest/gamble CGT/VAT free

jon3001

sdooley wrote: »

I said nothing about tax. The purchase of a metal is a speculation because it is a pure punt on the price going up.

Yes - in the long-run the price of stuff goes up. Bread, houses, gold. Gold is has been seen as a long-term reliable store of value since antiquity.

Even if the long-term trend is at inflation it is still useful in a balanced portfolio. By rebalancing you'll automatically buy gold when it is cheap relative to other investments such as shares and sell when the opposite is true.

sdooley wrote: »

With a share or bond you have the income.

The income is dependent on someone else paying it. If they don't pay then the investment may be worthless. Gold is noone else's liability which some people see as an advantage.

jon3001

alchemistkevin wrote: »

Thanks, I was just wondering if its possible to invest/gamble CGT/VAT free

Gambling through a licensed gaming operator is tax-free in the UK. However I'm not sure casinos etc trade in gold.

You might be able to find a spread betting acccount though.

alchemistkevin

jon3001 wrote: »

Gambling through a licensed gaming operator is tax-free in the UK. However I'm not sure casinos etc trade in gold.

You might be able to find a spread betting acccount though.

hmm...

I'll try and read up on that...

Anyone know what's the best/quickest way to buy/sell gold? (non-physical is alright with me)