Gold Coins & Inheritance Tax

paul0551

I've recently been buying 1oz Gold Britannia Coins.

These are purchased free of VAT & CGT as they are valid currency, carrying the value of £100.
Now here's the interesting bit............they carry a currency value of £100 but contain gold worth about £1,000.

So for Inheritance Tax planning, are they:
a) taxed on the basis of £100 as they are denominated currency
b) taxed on the basis of £1000, being the intrinsic value of the bullion content

Have I stumbled on a way to" reduce" the value of an estate by 90%?

tempus_fugit

My guess is they would be taxed on the basis of their value, ie £1000.

xylophone

The gold coins would surely be property of the deceased?

http://www.legislation.gov.uk/ukpga/1984/51/section/160


160 Market value.

Except as otherwise provided by this Act, the value at any time of any property shall for the purposes of this Act be the price which the property might reasonably be expected to fetch if sold in the open market at that time; but that price shall not be assumed to be reduced on the ground that the whole property is to be placed on the market at one and the same time.

paul0551

But what about the fact that they are legal tender with a statutory value of £100 ?

Keep_pedalling

paul0551 wrote: »

But what about the fact that they are legal tender with a statutory value of £100 ?

Xylophone has given the correct answer, do you really think is this was a real loophole you would be the first to stumble across it?

jamei305

In other news if you sell your house to your kids for 1p they won't have to pay any inheritance tax on it at all.

paul0551

No - I'm trying to ascertain the impact of the coin being statutory currency...........no one seems to be addressing that. And thank you jamie305 for such an insightful comment

Keep_pedalling

paul0551 wrote: »

No - I'm trying to ascertain the impact of the coin being statutory currency...........no one seems to be addressing that. And thank you jamie305 for such an insightful comment

We have established that there is no impact, IHT works on market value alone and the status of a coin as legal tender or otherwise is irrelevant.

squeeks

If you want to pay your inheritance tax bill in gold coins using the face value of the coins, go ahead. But the tax due will be calculated on the actual value of the coins which are part of the estate, subject to the normal rules.

Employers have tried paying employees in gold coins claiming the face value of the coins as the amount paid for tax purposes. The tax man will have his pound of flesh and it doesn't generally work out in your favour when you try to be a smart ....

dividendhero

Out of interest - how does taxman even know of the existence of things like gold coins??

steampowered

Please do not fall into the trap of assuming that these coins are actually worth the amount you are paying!

Read this thread which is self-explanatory: https://forums.moneysavingexpert.com/discussion/5557600