ISA or Gold?

EthicsGradient

You ought to be aware there's a world of difference between the savings accounts you've been using (small but steady gains from income, capital protected) and investing in gold (no income, just relying on market sentiment for someone else to want to buy it for more than you did, which varies a lot). Investing in businesses via shares has, historically, produced a better long-term return than either. But one advantage of gold is that it often moves in the opposite direction to global shares, so it can act as "insurance" against a sudden drop in shares.

Some people like to have, say, 75% of their investments in shares, and 25% in gold. This gives them most of the gain of the stock market, but with less of a chance of an overall sudden fall.

XzavierWalnut

Belfastboy51 said:

So i would assume you are saying wait until the turbulent times have passed and get a better rate for the gold. Presumably coins are the best option? tax free and zero capital gains? 

Problem these days, there are always turbulent events. Personally, I bought gold bullion because I always wanted to own some, not particularly to make a lot of money.
For large purchases coins seem to be the best option to avoid CGT.

aroominyork

EthicsGradient said:

Some people like to have, say, 75% of their investments in shares, and 25% in gold. This gives them most of the gain of the stock market, but with less of a chance of an overall sudden fall.

25% in gold? Some people, but not many. 5-10% is the range more often quoted as a likely store of value in case everything else goes wotsits up.

PS See ColdIron below, correctly saying gold is a store of wealth but not of value.

kempiejon

Belfastboy51 said:

My ultimate goal is to stop the HMRC getting their greedy fingers into my pots! god knows we pay enough tax on everything else and they seem to want to rob us blind on every corner! Thanks for your comment John.  

Sometime ago I decided that capital gains tax and income tax could be avoided by neither selling nor working too hard or often. It took me a couple of years but I got all my pots into ISAs and SIPPs, there's premium bonds and short dated gilts for cash like staying away from the interest tax due. With at least £23600 and potentially £80k each year to shelter each year just how much gold were you hoping to buy to stay out of capital gains tax?

ColdIron

aroominyork said:

EthicsGradient said:

Some people like to have, say, 75% of their investments in shares, and 25% in gold. This gives them most of the gain of the stock market, but with less of a chance of an overall sudden fall.

25% in gold? Some people, but not many. 5-10% is the range more often quoted as a likely store of value in case everything else goes wotsits up 

Gold is a good store of wealth (it is unlikely to become worthless) but it's a poor store of value

Albermarle

XzavierWalnut said:

Belfastboy51 said:

So i would assume you are saying wait until the turbulent times have passed and get a better rate for the gold. Presumably coins are the best option? tax free and zero capital gains? 

Problem these days, there are always turbulent events. Personally, I bought gold bullion because I always wanted to own some, not particularly to make a lot of money.
For large purchases coins seem to be the best option to avoid CGT.

Nothing special about 'these days' . Plenty of turbulent events in the past ( WW2 etc) and will be plenty in future. Normally financial markets shrug off most of  these events quite quickly.
Even with Covid it only took about 6 months for the markets to recover.

Bostonerimus1

The title of this thread "ISA or Gold?" shows a basic misunderstanding of the investing landscape as it doesn't need to be one or the other...it could be both. The UK has some excellent tax advantaged investment wrappers. If the OP wants to insulate their money from tax they should put money into their workplace pension and their ISA. How they invest and manage their money inside those wrappers will determine how their pot grows; it's possible to invest in a wide range of things including gold. 

FYI taking any notice of solicitations you get over email, Facebook, Instagram etc is a fast way to lose money.

Belfastboy51

So would it be better to put a lump sum in my work pension? would it gain more and be tax free? 

DRS1

If you are buying gold for the tax treatment you need to buy British coins (modern ones - ie post 1837).  Sovereigns are the obvious ones.  

You need to buy from a trusted dealer.  Chards, Atkinsons, Hatton Garden Metals and Bairds are some (google them).

But with coins and other gold bullion remember that there will be a spread and a wide one.  If the gold price doesn't move a penny between you buying and selling your sovereign you can still lose maybe 10% because you buy at a premium and sell at a discount.

Oh and whatever you do DON'T go on the Royal Mint website and buy a brand new Proof Sovereign (even if it says "last ever sovereign made in rose gold") because the premiums on those coins are in the region of 50% and you will never get that back.

It is much easier and safer to buy an ETF like the one suggested up above but if you do it outside an ISA or SIPP there will be CGT to think about when you sell (assuming you make a gain!).

The spread is much less with an ETF.

If you put the money in an ISA then you can buy a gold ETF without worrying about the tax.

Basically just put the money in an ISA and get what you want - it could even be another 3 year fixed rate bond (ISA)  from Nationwide

Bostonerimus1

aroominyork said:

EthicsGradient said:

Some people like to have, say, 75% of their investments in shares, and 25% in gold. This gives them most of the gain of the stock market, but with less of a chance of an overall sudden fall.

25% in gold? Some people, but not many. 5-10% is the range more often quoted as a likely store of value in case everything else goes wotsits up 

25% in gold is the old "Permanent Portfolio". 25% stocks, 25% bonds, 25% cash, 25% gold.