Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@. Skimlinks & other affiliated links are turned on

Search
  • FIRST POST
    • dboswell
    • By dboswell 9th Aug 18, 7:55 AM
    • 301Posts
    • 65Thanks
    dboswell
    Buying Gold Sovereigns
    • #1
    • 9th Aug 18, 7:55 AM
    Buying Gold Sovereigns 9th Aug 18 at 7:55 AM
    I want to purchase about 5k-10k of gold sovereigns as part of my investments.

    Any advice of what to buy e.g in terms of liquidity and where?

    I understand that they CGT free or is it a certain category?

    Do you have to declare any gain on a tax return?
Page 1
    • bowlhead99
    • By bowlhead99 9th Aug 18, 8:50 AM
    • 8,280 Posts
    • 15,130 Thanks
    bowlhead99
    • #2
    • 9th Aug 18, 8:50 AM
    • #2
    • 9th Aug 18, 8:50 AM
    I want to purchase about 5k-10k of gold sovereigns as part of my investments.

    Any advice of what to buy e.g in terms of liquidity and where?
    Originally posted by dboswell
    You've already answered the 'what to buy' if you are looking to get gold sovereigns? Presumably you only want them for their gold value and not as collectors' items so one coin is generally as good as another.

    Other options include the 1oz coins like Britannias, Krugerrands etc which give you fewer bits of metal to look after and cost more each ; or investing in some virtual gold account or into a bullion fund / ETF. With the latter options you replace the risk of someone burgling your house or your postman with counterparty risk, as your investment is all paper/digital whether the underlying assets are physical gold or derivatives contracts.

    If you're in London, ATS by the Savoy are reputable (or at least they were years ago and still exist) but there are various postal/ mailorder services if you don't have a dealer in your own town.

    I understand that they CGT free or is it a certain category?

    Do you have to declare any gain on a tax return?
    Sovereigns minted after 1837 will be sterling currency (not that you would spend them in a shop for their face value, but they technically are, just like gold and silver britannias).


    As such, they are not subject to gains taxes because they're sterling currency.


    And so there is nothing to put in a tax return because there can't be any chargeable gain. Of course, you might get losses instead of gains and as they're outside the scope of CGT you can't net such losses off your taxable gains on other 'real' investments.



    http://www.legislation.gov.uk/ukpga/1992/12/enacted#section-21-1-b
    • markj113
    • By markj113 9th Aug 18, 8:58 AM
    • 181 Posts
    • 132 Thanks
    markj113
    • #3
    • 9th Aug 18, 8:58 AM
    • #3
    • 9th Aug 18, 8:58 AM
    Hatton Garden metals is the place to buy sovereigns.


    Just grab the "Best value gold sovereigns"



    http://www.hattongardenmetals.com/buy/
    • DiggerUK
    • By DiggerUK 9th Aug 18, 9:18 AM
    • 3,124 Posts
    • 3,038 Thanks
    DiggerUK
    • #4
    • 9th Aug 18, 9:18 AM
    • #4
    • 9th Aug 18, 9:18 AM
    Sovereigns are VAT and CGT free. These are cheapest companies, I have used both..._
    http://www.elminvestments.co.uk/gold-coins.html
    https://atkinsonsbullion.com/gold/gold-coins
    I am not now, nor have I ever been, a Financial Adviser.
    'Forward to the British Spring' 'Viva Wikileaks'
    • henryandmay
    • By henryandmay 9th Aug 18, 3:51 PM
    • 50 Posts
    • 8 Thanks
    henryandmay
    • #5
    • 9th Aug 18, 3:51 PM
    • #5
    • 9th Aug 18, 3:51 PM
    Once one has purchased such item, where would you keep them? At home or would you pay a bank to keep them?
    I am also thinking of buying some gold but dont know where to start,
    • cashbackproblems
    • By cashbackproblems 9th Aug 18, 5:45 PM
    • 1,783 Posts
    • 697 Thanks
    cashbackproblems
    • #6
    • 9th Aug 18, 5:45 PM
    • #6
    • 9th Aug 18, 5:45 PM
    I buy one kuggerand per year and keep them in my sock drawer, last one was purchased through Bullion by post. Theres not much difference in price between the online sellers as the price should be determined by weight, market price and small % for the seller.
    • ColdIron
    • By ColdIron 9th Aug 18, 6:14 PM
    • 4,721 Posts
    • 6,163 Thanks
    ColdIron
    • #7
    • 9th Aug 18, 6:14 PM
    • #7
    • 9th Aug 18, 6:14 PM
    Once one has purchased such item, where would you keep them? At home or would you pay a bank to keep them?
    Originally posted by henryandmay
    How many do you want? You could pop a sovereign into a bag of flour (just don't throw it away). You can fit several, including acrylic hard cases, into a space not much bigger than a packet of Polos. Uncased circulated ones are even more compact. Gold is dense and takes up little space, use your imagination. Few banks provide safety deposit boxes now, Metro Bank will but the costs can be prohibitive. Non sets/collections are generally not insurable
    • bowlhead99
    • By bowlhead99 9th Aug 18, 7:54 PM
    • 8,280 Posts
    • 15,130 Thanks
    bowlhead99
    • #8
    • 9th Aug 18, 7:54 PM
    • #8
    • 9th Aug 18, 7:54 PM
    How many do you want? You could pop a sovereign into a bag of flour (just don't throw it away).
    Originally posted by ColdIron
    Better to hide them in a can of Lyle's Golden Syrup. Then every so often you can have so much fun licking them clean.

    At least, that's what I imagine people do for sport once they have retired with more gold than they need to spend.
    • KingKenny
    • By KingKenny 9th Aug 18, 8:24 PM
    • 236 Posts
    • 22 Thanks
    KingKenny
    • #9
    • 9th Aug 18, 8:24 PM
    • #9
    • 9th Aug 18, 8:24 PM
    Is this true, and is it workable? I have heard old wrinkly's at the local legion discussing this.



    So if your four years out from state retirement. Have circa 110k in the bank. Savings. You do not want more than 10k in the bank as this would lead to less state benefits, .i.e pension credits and council tax credits.


    You buy 25k of gold coins per year for four years. Hide them away. At retirement age you are holding 100k of gold coins which you can then sell at the local gold/pawn shop to support your income? For cash to be spent.



    Selling 12.5k of gold coins per year for eight years boosts your retirement income all hidden from the authorities?


    I know gold could fall in value, also inflation is not your friend. Do people actually do this?
    • FatherAbraham
    • By FatherAbraham 9th Aug 18, 8:44 PM
    • 901 Posts
    • 666 Thanks
    FatherAbraham
    I want to purchase about 5k-10k of gold sovereigns as part of my investments.

    Any advice of what to buy e.g in terms of liquidity and where?
    Originally posted by dboswell
    When one wants to invest in businesses and industry, one usually buys tradable securities, which have great liquidity, as well as the chance to diversify, rather than buying entire small local businesses.

    I apply the same concept to gold-based investments, preferring to hold securities which derive their value from holdings of the metal, rather than directly possessing physical gold myself. That way, I enjoy high liquidity in my investments. Such securities can also be held in a tax-protection wrapper, such as an ISA or a personal pension.

    While it is easy to buy gold coins, selling them quickly for a good price can be tricky.

    Holding physical gold coins is an insurance strategy, not an investment strategy.
    • bowlhead99
    • By bowlhead99 9th Aug 18, 8:50 PM
    • 8,280 Posts
    • 15,130 Thanks
    bowlhead99
    Selling 12.5k of gold coins per year for eight years boosts your retirement income all hidden from the authorities?
    Originally posted by KingKenny
    It doesn't boost your 'income' because you are just paying yourself with your own money.

    But yes, the result is you would obtain extra means-tested benefits if you were to illegally under-declare your liquid assets - hiding your cash to obtain benefits designed for people with less wealth. You could have a good laugh with your mates down the local legion about how you're sticking it to the man - and then live in perpetual fear of one of them dobbing you in.

    I know gold could fall in value, also inflation is not your friend. Do people actually do this?
    Gold may or may not hold its value against inflation in future - over some periods it has, and others it hasn't. I am sure some people would try the wheeze.

    What is clear is that if you are a relative pauper with a pension income level below the council tax credit / pension credit cut off points, 100k will be a lot of money to you. It would be a shame if it went missing in a casual burglary, or got lost in the aftermath of a house fire.

    Or maybe someone followed you home from the pawnbroker one month, forced his way through your front door behind you, and threatened you with a baseball bat until you told him which cookie jar the coins were in. Then after finding them, beat you to death so you wouldn't report him to the police. No paper trail that anything was ever stolen, because as far as anyone knows, you didn't have a secret 100k of gold stashed in the cookie jar; all your benefit claims show you have minimal assets. Sounds pretty nasty, but some of the public who had been defrauded by your benefit cheating would probably clap and say you had it coming, live by the sword die by the sword etc.
    • KingKenny
    • By KingKenny 9th Aug 18, 9:04 PM
    • 236 Posts
    • 22 Thanks
    KingKenny
    It doesn't boost your 'income' because you are just paying yourself with your own money.

    But yes, the result is you would obtain extra means-tested benefits if you were to illegally under-declare your liquid assets - hiding your cash to obtain benefits designed for people with less wealth. You could have a good laugh with your mates down the local legion about how you're sticking it to the man - and then live in perpetual fear of one of them dobbing you in.

    Gold may or may not hold its value against inflation in future - over some periods it has, and others it hasn't. I am sure some people would try the wheeze.

    What is clear is that if you are a relative pauper with a pension income level below the council tax credit / pension credit cut off points, 100k will be a lot of money to you. It would be a shame if it went missing in a casual burglary, or got lost in the aftermath of a house fire.

    Or maybe someone followed you home from the pawnbroker one month, forced his way through your front door behind you, and threatened you with a baseball bat until you told him which cookie jar the coins were in. Then after finding them, beat you to death so you wouldn't report him to the police. No paper trail that anything was ever stolen, because as far as anyone knows, you didn't have a secret 100k of gold stashed in the cookie jar; all your benefit claims show you have minimal assets. Sounds pretty nasty, but some of the public who had been defrauded by your benefit cheating would probably clap and say you had it coming, live by the sword die by the sword etc.
    Originally posted by bowlhead99

    Cheers Buddy.


    I was only posting about conversations overheard down the local Legion.



    What you outline, well pretty scary stuff.


    • Tom99
    • By Tom99 9th Aug 18, 11:25 PM
    • 2,771 Posts
    • 1,887 Thanks
    Tom99
    What type of gold coin/bar would give you the cheapest buy/sell spread and what is the likely %age buy/sell loss.
    So for example would 1 small coin give you a 10% loss but a 10,000 bar a 1% loss.
    • dboswell
    • By dboswell 10th Aug 18, 8:36 AM
    • 301 Posts
    • 65 Thanks
    dboswell
    I would say the liquidity of gold coins is relatively good once you navigate the spread difference.
    • bowlhead99
    • By bowlhead99 10th Aug 18, 8:59 AM
    • 8,280 Posts
    • 15,130 Thanks
    bowlhead99
    What type of gold coin/bar would give you the cheapest buy/sell spread and what is the likely %age buy/sell loss.
    So for example would 1 small coin give you a 10% loss but a 10,000 bar a 1% loss.
    Originally posted by Tom99
    If you follow some of the links above you can see examples. For example buying sovs at Elm Investments, it's 232 to buy but you only get 219 if you sell it back to them. A 5.6% loss, same as buying a half sovereign for 116 and selling for 109.

    On same site at same time, if you wanted to buy a Krugerrand for 974 you could sell it for 924 which is only a 5.1% loss. Krugers are popular and liquid to trade, but not UK currency though so there is CGT on that route. 1/10th Krugers are 99 to buy and 92 to sell so more like a 7% spread.



    Generally the spread is driven by liquidity, but a further factor is that the coin deaaler would find it more hassle to sell you ten 1/10th Krugererrands on ten occasions, than one 1oz coin that he has to hand, so the effort is priced accordingly (plus maybe people wanting to buy small denominations to tuck away and store / sell-on flexibly can drive the price higher than just buying one big coin).

    However, if you are buying multiples of anything you will typically get a better price than buying singles of that thing.
    • markj113
    • By markj113 10th Aug 18, 9:00 AM
    • 181 Posts
    • 132 Thanks
    markj113
    Gold is extremely liquid, a dealer will pretty much buy any quantity at just below spot price. I have previously walked into a dealer with around 60k worth of gold, they were checked for authenticity which takes seconds per coin and the money was in my account within 2 hours.


    What type of gold coin/bar would give you the cheapest buy/sell spread and what is the likely %age buy/sell loss.
    So for example would 1 small coin give you a 10% loss but a 10,000 bar a 1% loss.
    Originally posted by Tom99

    Its a little more complicated than that. Standard bullion coins can be purchased from as little as 1.5% over spot. A dealer will offer around 2% under spot. You can sell privately for a little more.


    Coins that have collectable value stand to increase above and beyond gold spot value. Coins such as Chinese Panda's and the new royal mint queens beasts series are doing well with earlier releases increasing above spot and original sale value.
    Last edited by markj113; 10-08-2018 at 4:30 PM.
    • DiggerUK
    • By DiggerUK 10th Aug 18, 11:23 AM
    • 3,124 Posts
    • 3,038 Thanks
    DiggerUK
    Keep calm and carry on stacking
    Once one has purchased such item, where would you keep them? At home or would you pay a bank to keep them.........
    Originally posted by henryandmay
    ...........Few banks provide safety deposit boxes now, Metro Bank will but the costs can be prohibitive.......
    Originally posted by ColdIron
    https://www.metrobankonline.co.uk/safe-deposit-boxes/

    We keep the grandkids awake at night telling them scare stories about owning gold, they haven't found out that a block of gold the size of a box of tissues is worth 400k.

    We used deed boxes at HSBC, they were the last high street bank to offer such a service. We had a joint account which we transferred to Metrobank, reason being they had safety box storage.
    Home insurance works out at a cost of 1 per 631 cover, our policy allows for a rise in price of 15.5% over what we declared. (why 15.5%?)..._
    I am not now, nor have I ever been, a Financial Adviser.
    'Forward to the British Spring' 'Viva Wikileaks'
    • Flobberchops
    • By Flobberchops 10th Aug 18, 4:09 PM
    • 821 Posts
    • 639 Thanks
    Flobberchops
    I second Hatton Garden Metals. Used them recently as having done a little research they seemed to offer the best price for Sovereigns. Fast and businesslike service, was happy with the coins they provided.



    Just bear in mind they only accept cash or bank transfer - presumably accepting card payments would expose them to chargeback fraud.
    I work for a UK bank, but any comments made on this forum are solely my personal opinion. Caveat Emptor!
    • tommyboyd
    • By tommyboyd 31st Aug 18, 3:39 PM
    • 11 Posts
    • 1 Thanks
    tommyboyd
    Because each Gold Sovereign can be claimed as an individual item I am wondering if they covered by your basic household content insurance?

    I am worried about a caveat in my own insurance that states it will not cover the theft of 'money'

    Anyone here using content insurance for their sovereigns?
    • ColdIron
    • By ColdIron 31st Aug 18, 3:44 PM
    • 4,721 Posts
    • 6,163 Thanks
    ColdIron
    I tried many years ago and if they weren't a 'collection' (which they struggled to define) they weren't interested
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

89Posts Today

2,407Users online

Martin's Twitter
  • RT @GillsSarah: Interesting! I always used to buy big name products cos I thought they?d be stronger. @MartinSLewis has changed my mind on?

  • RT @think_jessica: Think Jessica the Film 30 min doc/drama based on my mother?s true story. Narrated by @MartinSLewis is now live on https:?

  • RT @kelsher123: @MartinSLewis First time switcher! And no, it wasn?t as challenging as I thought???? A British Gas customer so no brainier. Th?

  • Follow Martin