Silver and gold coins in the UK (tax and bullion content)

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silvernomics
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Silver and gold coins in the UK (tax and bullion content)

I don't know if the same goes for other countries, but in the UK gold sovereigns and silver and gold britannias are legal tender and as such are NOT subject to capital gains tax.

At least at the moment. I think we all know that as the shit begins to smother the fan governments will rip up and rewrite whatever laws they feel like.

But if you are UK tax resident and thinking of buying some gold or silver coins, you should be aware that under the current state of affairs at least, you are needlessly exposing yourself to taxation if you opt for maples or eagles or krugers rather than the above coins.

There is VAT on purchases of new silver in the UK (but not gold). One way to avoid VAT is to buy old, predecimal silver coins eg on eBay. Up until 1919, British silver coins (threepence, sixpence, shilling, florin, halfcrown, crown) are 92.5% (sterling) silver. From 1920 to 1946, they are 50% silver.  For newbs, remember, silver and gold are measured in troy ounces which are a few grams heavier than cooking ounces.

This rough calculator might come in handy in assessing the price to pay for British junk silver:

http://tinyurl.com/6j38cnd

Edited by admin on 11/08/2014 - 06:13
silvernomics
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And, as I should have said,

And, as I should have said, there is ZERO silver in British "silver" coins from 1947 onwards.

giant catfish
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VAT

Another way to avoid the VAT is to incorporate, aka run a limited company that can reclaim the VAT on purchases. The issue of course is that the silver then becomes owned by the company, and any resale of the silver will require VAT charged as input tax.

This isn't a sensible approach for the short-term physical trader, but most here trade paper and stack physical, right (long lurker at the Turd's old site, never posted, decided to sign up now). In the long run, it really depends on your wealth but if you've got the pitiful amount of physical I have, any gains from marking the physical holdings to market are likely to result in minimal corp tax unless silver goes to the moon. And in this case, the silver with FIAT denominated numbers may be sold at those amounts... smiley (OK, no)

Right now, I'm able to use my stack of physical silver to reduce my yearly profit and pay less tax, because I've lost money on it sad

I'm no expert though, and would definitely appreciate advice or the rules on UK Ltd-Cos holding physical silver when the main trading activity of said company is *not* metals trading...

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CrashTheComex
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Also possible is to buy

Also possible is to buy silver and leave it in storage with the retailer. Theres a couple of companies in the UK will sell silver, put it into insured allocated storage, and you pay no VAT until you take delivery, if you resell back to them theres no VAT. 

I dont know if they do this for coins or smaller bars, I know they do for the LBMA 400Oz bars. 

Shit-Happens
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UK Gov keeping tabs on Gold Buyers

You are allowed to buy up to £10,500 a year in UK without surrendering your passport details to the vendor. Possibly another way for the UK gov to keep tabs on how much gold you are buying!!!!!!!!

That is if you are constantly buying from a vendor such as www.coininvestdirect.com

giant catfish
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bricks and mortar coin shops in UK

Do you know me? wink Anyway, I thought it was that amount *per vendor* - so if you get too close to the limit where the vendor has to ask for permanent identification (they've got address and bank details, most asking for bank transfer, anyway), you simply change vendor? AFAIK if you put in an order to coininvestdirect and they have to ask for passport, etc. identification - and you refuse - then the order is cancelled. No loss of relative privacy, just choose another vendor. For silver coins in the UK though, check the difference between coininvestdirect and bullionbypost - it's almost comical.

The trouble is that websites such as coininvestdirect are really rather useful, and reasonable value. I'm in the UK and unlike our American friends, who seem to have a coin shop or five in every small town, I'm having all sorts of trouble finding *any* dealer who actually trades either interesting numismatics or plain tubes of bullion coin. If I want coins, I need to buy over the internet, unless I'm a complete moron and blind too. If so, please either humiliate me by replying here or email me... regardless, if anyone finds me a reasonably local coin dealer who doesn't take the michael with his margin (as in margin over spot, not leverage...) then I'll put up with the embarrassment... even emailed Bonhams and nobody in the jewellery business *anywhere* near me has any idea what I'm talking about when I show them a silver Liberdad (my fave coin for 'luck'... wink) and say 'I like collecting coins, do you know anyone who trades bullion coins?'... all I get is complete confusion, almost as if the jewellers have never seen 1 troy ounce coins made from silver before (I'm not going to start waving Krugerrands around, not that I have any, of course).

OK, sounds crazy. But true... the 'cash for gold' scammers showed up late last year and early this year, but finding a *coin* dealer with local competition (i.e. cannot charge idiotic margins) is proving difficult for me. Anyone got any tips? I'm in south east England... south of London.

One thing I'm concerned about is the easy availability when buying coins - even at reasonably good prices from places like coininvestdirect - compared to the lack of liquidity when it comes to sell. Yes, the websites will buy back, but the spreads are pretty horrendous (even when ignoring VAT, as per investment gold). Then there's the hassle of actually making the trade. Walking into a local coin dealer who knows you... well that would be nice. Sounds like this is the norm in the USA... am I missing something obvious here in the UK? There are a good few UK-based bullion coin dealers (Chard, bullionbypost, etc.) but they're all internet / mail order / phone and not only is it hard to become a 'known customer', I'd also feel slightly exposed when sending a load of PMs in a box via the Royal Mail...

Please help, am I just completely out of the loop, or do these 'friendly local coin shops' simply not exist in the UK? I'm hoping not to have to sell any of my physical but if I have to (recent job loss, etc.), then I don't want to have to give it away due to lack of bidders...

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uktraveller2009
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UK and coins

Hi, I live in the UK; if you want to buy coins (that have a face value: Maples ASEs, Phils etc), I just bought some from Germany via the web from Geiger Edelmetalle. They only have 7% VAT so it saved me  fifty pounds from the UK equivalent price, even including the bank transfer charge and UPS delivery. They sell rounds and ingot/bars but the VAT is 19%

Rick
 

TallBloke
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Shortage

Hi,

I have used Coinsinvestdirect on a regular basis and have found them really good; but the 20% VAT is a bitch. Anyway, I keep hearing that there is a shortage of silver at the mints but have never had a problem getting my orders fulfilled. I just tried to order 100 Maples from Coinsinvest and they are out of stock.

Maybe it's just the supply chain interruptions caused by the problems in Japan :-)

adamski100
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FAO Catfish

I don't know if you've used Baird & Co....I've been able to sell my gold to them virtually at spot, give or take a percent or two.

I'm currently exchanging my Kruggers for Brits as I hadnt looked into tax implications when I first started buying them years ago. The last thing I want is a massive CGT bill in a few years time. Baird have been doing an offer of this of around 3% because so many Britons are in this situation.

And I thought I was the only Brit buying gold!

Regarding silver, i'm taking delivery despite the VAT.

silvernomics
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Adamski, that's great

Adamski, that's great information. Are they really doing a swap at 3%? I like the sound of that. If I still had krugers I'd be all over it.

Re silver, the two options to dodge 20% VAT are either to buy it from a German dealer, which lowers the VAT rate to something like 7%, or to buy and hold offshore, eg through the Guernsey Mint.

giant catfish
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VAT on imported silver / Perth Mint / Oddities

OK I've tried emailing Geiger Edelmetalle (unfortunately I don't speak German... I'm not naturally good at languages and 2.5 appears to be my limit (English, French and 'dos cervezas por favor' Spanish), but Geiger have a full English version of their website so I have to assume that their customer service department has someone fluent in English).

I've pointed out that I'm currently a customer of one of their competitors (CoinInvestDirect - well, they have a UK bank account to pay into but I receive my silver from Germany by German courier) but am currently charged 20% VAT. I asked whether their delivery arrangements are such that they can charge me the German rate (7%) - they use UPS for delivery, which I'm happy with - and that if this was true, then I'd switch suppliers in a heartbeat.

Sadly, Geiger haven't responded. I emailed the link on their website. Not sure whether they are checking whether this is all legit, or whether the hassle of *more* English customers buying lots of silver (and potential German VAT investigation) is not what they want.

Secondly, has anyone here tried CoinInvestDirect's so-called 'collect in Germany' 7% VAT deal? It appears to imply, reading between the lines, that you can do ostensibly *two* transactions (one to buy the silver from CoinInvestDirect for delivery to a German address, and a second where the German address happens to be their trusted courier firm, who then deliver the silver to England). Do you have to arrange all of this yourself (I'd be concerned about the second transaction with the courier firm unless they are geared up for this already) - or is the text just a taxman-dodge to effectively say that established customers can ask CoinInvestDirect to just organise the 7% VAT delivery-switch for them?

Thirdly, I've bought some lovely silver coins directly from the Perth Mint website. No, they are not sensible 'investment silver' since the coins are either proof editions or specials for one reason or another, and sell at a substantial premium to spot. However I'm not just buying silver coins for the investment process - I actually love attractive coins (more Libertads, please!). I was expecting to be stung for all the taxes under the sun when the coins arrived, since I purchased directly from Australia and the coins came through Customs.

Interestingly, the duty charged (via FedEx, on behalf of Customs) was tiny. On a purchase of a Customs-rated value of £386.37, the duty was only £19.31. FedEx then charge a handling fee. No VAT was charged... 20% VAT would have been £77 on top. The Perth Mint didn't disguise the contents - they were listed as 'collectible numismatics'.

This begs the question - if I bought their *bullion* coins in bulk, or a kilo Kookaburra or other usable investment silver from them, would the same rules apply? Have Customs and FedEx forgotten to charge me VAT, or do 'collectible numismatics' not fall under a VAT regime? In which case, has anyone tried to buy 'normal priced' silver from Australia - and got the same 'collectible numismatics' Customs description?

If the latter, it seems like buying directly from Australia could be another way of lowering the VAT proportion. Certainly it takes some of the sting of the margin on their proof coins away (the 'high relief' super-thick Kangaroo is a lovely coin to hold)

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matthenue
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7%

Hey catfish,

you should check out the thread http://www.tfmetalsreport.com/forum/avoiding-vat-silver-europe/225

I said this:

If you steer away from bar's you can do the 7% germany trick without even having to go there.

 
 
If you hire the courier service to pick it up for you and delivery it, you avoid the British 20% tax and get german 7% instead.
 
I used ups and it cost me £50 for courier, so if you spend more then £700 it's free money in your pocket. (13% saving)
 
 
But yeh to sum it up if you buy from their website saying to deliver to uk.... it's 20%
If you arrange the delivery from germany through a courier...it's 7%
 
Maybe if you explain this to your other german dealer they may be able to help.
 
I rang up HMRC and asked if i collect silver bought in germany do i have to pay import taxes... they said no as long as you paid EU tax already
matthenue
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found an explanation

apparently on coins imported is 5% not 20% :D

"one important lopehole for you that vat on numismatic coins is only 5%. I am sure about this if you just search UK vat books, you will find it. So if your other lopeholes fail, be sure it is 5% VAT. If you cant find this in the tax laws I can search it for you then."

https://www.kitcomm.com/archive/index.php?t-68804.html

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ignore above

seems to be more cloudy then i thought....

not sure at all anymore :S

silverdick
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UK buyers - CGT/VAT

Being interested in making use of CoinInvestDirect's VAT workaround I called UPS (since matthenue used them succesfully) however they no longer ship precious metals apparently, unless they're in the form of jewellery and valued under 500euros.

I emailed VIA MAT as they're recommended by CID themselves and asked for a quote; an order with a weight of 10kg and a value of £7k would be shipped fully insured for £223, which means a saving of approx £630.

Given the hit the metals are taking as I write this I'm going to make use of this but I have a question hopefully somebody here might be able to answer... I have a limited company that has some spare capital - if i were to use this money to buy brittanias (which are CGT exempt) so the coins would effectively become assets of the company and later on made a profit on them, would it still be exempt from capital gains or would it be subject to corporation tax?

matthenue
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interesting question

I would also like to do it through a limited company, so if you do find out let me know. 

As far as I'm aware brittanias aren't exempt.  Could you link how you found out they were?

As for UPS, I've recently on my last purchase found out they are no longer delivering metals...!

Anyone found a courier who will?

So your option is to take the risk with no insurance labeling it as books or something or paying ViaMat's stupidly extortionate charges.

The other option is you get a cheap return flight and go your self.... it's normally cheaper then Viamat.

Excalibur
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Britannias at £20.48

Even with the foul 20% on top, this is not too much more than importing from Germany.

http://www.atkinsonsthejewellers.com/silver-coins

silverdick
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double post

double post

silverdick
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less vat

@Excalibur

I've used Atkinsons before and they're decent. Probably the lowest premiums I've seen for any UK based bullion dealer but I've paid 20% vat on a good chunk of my stack already and I'm loathe to line HMRC's coffers any more than I have to.

@matthenue

I asked my accountant to look into it; apparently if the coins became company assets then any profits made would still be exempt from capital gains and would not incur corporation tax but I'd want a second confirmation personally before I acted on it.

As for couriers, yup, it's a shame UPS changed their policy on precious metals - you should feel lucky on your previous orders! I asked CID how they then manage to use UPS for all their shipping and they confided it's because they have separate insurance in place.

You mentioned flying's usually cheaper; I'd say the biggest question is, is if you can get a flight directly without a stop over in which case then it usually is cheaper. If you live near Heathrow then you're golden.

I made a significant purchase with CID this week and spent some time looking at flights vs. couriers. In my case VIA-MAT worked out cheaper than the cost of flights&car_hire so I opted for their service, it's fully insured and of course saves me wasting time travelling myself. All things considered, the purchase worked out 9% cheaper than I had just paid the UK vat; a saving of £1100.

I doubt I'll be making any more big purchases but I think I'll be trying Geiger for a few smaller orders, apparently they ship to the UK while only applying 7% vat as mentioned by a few turdites here.

On the note of flying, you should also consider Amsterdam (although not if you're looking for britannia's). Coins in Holland are subject to the reduced VAT and there's two bullion dealers I've found that allow you to collect from their storage which is actually inside/around Schiphol airport; you could hop off, collect, hop on again. One of them also has a scheme called "VAT margin ruling" where you only pay vat on the dealers profit margin, meaning it's *significantly* cheaper yet again however in this scenario your invoice doesn't make mention of any vat paid meaning a risky time through customs (I'd consider this if I was going by ferry though!).

Good luck and let us know how you get on.

vanjan
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Hi all, I wanted to ask if

Hi all,

I wanted to ask if anybody has any experience with ordering silver coins form GoldSilver.com. There are two reasons I would like to purchase from them:

  1. I highly value Mike Maloney's (it's his site) insight and the only way to join his "insider" club is to buy some bullion off him.
  2. They don't charge VAT, saying it's the customer's responsibility. 

The big question is: can the coins go through customs unnoticed?

silverdick
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Well if it was picked up by

Well if it was picked up by customs, there'd be no duty but standard VAT would apply. Considering that GoldSilver.com would be likely to fill out an accurate customs slip for your parcel I wouldn't personally be banking on a customs officer overlooking the fact that your parcel came from outside the EU, has a value well in excess of £15 and makes no mention of VAT having been pre-paid. Mind you, you could always be lucky like this guy.

I'd say you're better off employing the strategies mentioned above and achieving a guaranteed VAT reduction than hoping HMRC are having an off day.

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