Gold Coins & Inheritance Tax

squeeks

I image they are declared as part of the estate by the probate solicitor.

Otherwise, proving their pedigree is a little tricky.
- How do you prove they aren't stolen property?
- How you would prove they wern't gifted to you 7+ years prior to their death etc..
- If you happen to dig them up in the garden and declare them as a treasure? or had forgotten you buried them etc...

If the coins (or any other item, cash, jewellery etc..) arn't mentioned in the will and the probate solicitor has no knowedge of them and you have your hands on the coins and no one else is after them in the family.... I imagine there is very little to stop you taking them, but it does seem to be theft from the deceased's estate in my opinion, rather than a legitimate transfer of inheritance.

bigadaj

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

In other news, all those shares you have that are actually worth £10 each actual have a share certificate value of £1, maybe that would work too?

Aretnap

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

It was addressed in part 3 - they would be taxed on the market value. The fact that they have a face value is neither here nor there if they would actually sell for more than the face value. No different from having a collection of old rare coins, or Penny Blacks.

Repeating the question won't change the answer I'm afraid.

Malthusian

jamei305 wrote: »

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.

This is a slightly different issue from the OP's - if he dies within seven years of the "sale" the difference between what they paid for it and what it was actually worth would be treated as a gift, and they would be taxed at 40% of the gift. (If it's worth more than £325,000 taper relief might apply, but taper relief doesn't work how most people think it does.)

paul0551 wrote:

No - I'm trying to ascertain the impact of the coin being statutory currency...........no one seems to be addressing that.

They did. They told you it was irrelevant, which it is.

The answer to your original question is neither - they will be taxed on the actual value which is probably significantly less than £1,000.

Likewise if you die with £10,000 in £50 pound notes the estate will pay IHT on £10,000, even if the "intrinsic" value is a few pennies worth of paper.

dividendhero wrote: »

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

Same way he knows about everything else, because the executors tell him.

Unless they are stupid enough to think it's clever to attempt to evade Inheritance Tax.

The idea of burying gold coins and having your heirs dig them up has been discussed regularly here. Unfortunately, you cannot get away from the fact that if you convert enough of your wealth into gold coins to make a significant difference to the IHT bill, this will create a glaring gap between what the taxman knows you had and what your executors have declared, which means they will investigate until they find the entry for a £500,000 payment to KrugerandsRus.com on your bank statement. Conversely, if you bury a small enough amount that the taxman doesn't notice, the IHT saving won't be worth the effort or the risk.

Clive_Woody

Just leave £500 "cash" to each of your kids in your will, to be paid from the coins in your top draw :beer:

Chromebar

tempus_fugit wrote: »

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

It is up to the holder to declare the value NOT tax man. As stated, legal tender coins have to values
- their face
- their commodity.
For tax and accounting purpose.

Thus decide which value is "appropriate". They are both market values since you could offer to settle a private debt of £1000 either using 10 Brittania gold coins
with a face value of £1000 or with fiat UK currency of £1000. They are equivalent . or you can settle the debt by offering the creditor 1 Brittania coin - assuming the spot price was trading @£1000/oz.

Chromebar

Keep_pedalling wrote: »

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?

There are no loopholes; ALL legal tender coins have two values.
For practical reasons most people do not hoard tonnes of 1 &2p coins to extract their commodity value but in principle they could.

John-K_3

paul0551 wrote: »

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

Here’s a plan, why do you not keep asking the same question over and over hoping for a different answer?

Would you claim a bond with face value of £100 but trading at £200 should only be valued at £100?

What about a rare 1p stamp worth £100?

The value is the value. There is no loophole here, although I would not be surprised if one of the normal suspects did not pop up soon to hint at just evading the tax entirely by not reporting them.

John-K_3

Chromebar wrote: »

It is up to the holder to declare the value NOT tax man. As stated, legal tender coins have to values
- their face
- their commodity.
For tax and accounting purpose.

Thus decide which value is "appropriate". They are both market values since you could offer to settle a private debt of £1000 either using 10 Brittania gold coins
with a face value of £1000 or with fiat UK currency of £1000. They are equivalent . or you can settle the debt by offering the creditor 1 Brittania coin - assuming the spot price was trading @£1000/oz.

This advice is of course utter rubbish. No better than suggesting selling your house for a pound to avoid cars costs, or similar. The fact that an idiot could give them away at less than their fair value is neither here nor there.

As a decent rule of thumb, do not take legal advice from someone who does not know the difference between two and to.

Chromebar

Keep_pedalling wrote: »

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.

Correct, and there are TWO market values for coins. For paper notes I guess there is some miniscule commodity value in the paper as scrap but for coins there is a tangible commodity value in the metal .
Thus one can chose how to record the coins value in ones accounts and tax filings.