Gold and VAT

[Bumble]

It seems to me that the European Union could easily put the kybosh on the purchase of investment gold by the simple expedient of charging VAT on it. VAT is already charged on silver and other precious metals and is supposed to be a very broad tax. According to the UK Revenue and Customs website, investment gold is exempt from VAT in order to "place it on the same footing as other investment products, such as stocks and shares". But it still seems to be a strange anomaly: gold jewelry is not exempt, nor are numismatic coins that exceed 180% of the market value of the gold they contain. 

 

I doubt most buyers would be willing to pay an additional 20% in tax. To avoid VAT, the buyer could purchase and vault gold outside the EU, but this removes the ability to enjoy one's collection of coins and bars. The alternative would be to purchase some kind of 'paper' instrument, but this would defeat the object of investing in gold for a lot of people.

 

So the next time there is a financial crisis leading to a loss of confidence in fiat, and the gold price soars, I wouldn't be surprised to see VAT introduced to curb it.

 

References:

http://www.hmrc.gov.uk/manuals/vgoldmanual/vgold1300.htm

https://www.gov.uk/government/publications/vat-notice-70121-gold/vat-notice-70121-gold

[KDave]

They could put VAT on it but I am not sure that would stop people investing in it. People will just switch to vaulting services if the price is rising - there would be no stopping the price going up once the masses got wind it was the next sure thing investment.

[silversword]

It seems to me that the European Union could easily put the kybosh on the purchase of investment gold by the simple expedient of charging VAT on it. VAT is already charged on silver and other precious metals and is supposed to be a very broad tax. According to the UK Revenue and Customs website, investment gold is exempt from VAT in order to "place it on the same footing as other investment products, such as stocks and shares". But it still seems to be a strange anomaly: gold jewelry is not exempt, nor are numismatic coins that exceed 180% of the market value of the gold they contain. 

 

I doubt most buyers would be willing to pay an additional 20% in tax. To avoid VAT, the buyer could purchase and vault gold outside the EU, but this removes the ability to enjoy one's collection of coins and bars. The alternative would be to purchase some kind of 'paper' instrument, but this would defeat the object of investing in gold for a lot of people.

 

So the next time there is a financial crisis leading to a loss of confidence in fiat, and the gold price soars, I wouldn't be surprised to see VAT introduced to curb it.

 

References:

http://www.hmrc.gov.uk/manuals/vgoldmanual/vgold1300.htm

https://www.gov.uk/government/publications/vat-notice-70121-gold/vat-notice-70121-gold

 

That would be the sort of short-sighted idiocy I would expect from the EU, but whilst "they" want to keep accumulating gold for themselves, its unlikely. Gold used to be VAT-able before the exemption, but of course it was much cheaper back then. For me, i would just move more toward allocated if I was still a buyer. 

[Murph]

Buy it from ebay and a foreign seller using the Global Shipping prog and you'll get charged VAT now.  Where the money actually goes I don't know as Ebay won't say.

[DRooster]

 

...gold jewelry is not exempt, nor are numismatic coins that exceed 180% of the market value of the gold they contain.

That is so specific and wholly strange.

[silversword]

Not really - the rules are that investment gold only is VAT exempt. Jewelry and collectible coins tend to be valued based on much more than the weight of metal alone