British investors scramble for gold coins to beat tax increase

Asheron

British investors scramble for gold coins to beat tax increase

Submitted by cpowell on 09:23AM ET Saturday, May 29, 2010. Section: Daily Dispatches

By Javier Blas and Vanessa Houlder
Financial Times, London
Friday, May 28, 2010

http://www.ft.com/cms/s/0/74825c32-6...44feab49a.html

British investors are scrambling to buy sovereigns and Britannia gold coins in an attempt to use a tax loophole to avoid paying more capital gains tax.

Mark O'Byrne, of Gold Core, a London-based gold coins and small bars dealer, said it was selling sovereigns and Britannias "in the thousands."

"This week we sold more than in any other one-week period," he said. "The vast majority of the buying is related to capital gains tax."

The move comes as the government plans to raise CGT for items such as second homes and shares to rates "similar or close to those applied to income," suggesting a rise from the current 18 per cent rate to nearer 40 or 50 per cent. The tax increase is likely to come into force next April but could be introduced on June 22 alongside the government's planned emergency budget.

Primrose

How are people going to sell all these gold coins and sovereigns when the time comes to cash in their profits? I wouldn't mind betting that sooner or later, any dealers will be put under the same legal obligation as the banks to do disclose the names and addresses of all clients selling gold to HM Revenue and Customs.

amcluesent

Or HMG will simply seize gold and in return give out a perpetual paying, say, 0.5%. Only sensible way to have bullion gold is vaulted outside of the EU.

One hardly need point out that there's every chance that London "good delivery" gold has a core of tungsten; the market is completely manipulated.

Jake'sGran

Members of the Govt, especially Conservatives, have been complaining bitterley about this so we don't yet know exactly what the rates will be. I have been worrying about it but then realised that most of my gains have been in ISA/PEP investments. I can earn over £9k without paying tax and understand that the first £10k of gains is not taxable. Is it too soon to start panicking?

cheerfulcat

Hi, Primrose,

Primrose wrote: »

How are people going to sell all these gold coins and sovereigns when the time comes to cash in their profits? I wouldn't mind betting that sooner or later, any dealers will be put under the same legal obligation as the banks to do disclose the names and addresses of all clients selling gold to HM Revenue and Customs.

Certain gold coins are ( currently! ) exempt from CGT.

sabretoothtigger

The point here is that sovereigns are british currency. If you bought a krugerrand it'd be liable to CGT but a sovereign has already risen from 1 pound worth in Victorian ages to far more. Some copper two pence coins could also be worth more then face value and you wouldnt be taxed on them

Theres also likely silver proof coins not liable and others. Also classic cars are not liable to CGT even when you make a profit though they could change that I doubt they will try to tax people for holding currency