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Selling CGT Exempt Gold


Muscipula

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Hello all, 

I've been stacking mostly gold for almost two years, so very new compared to the extremely experienced and knowledgably collectors/stackers here

I'm not planning to sell any for at least 5-10 years, though have been wondering how this might play out when the time comes.

The majority of my gold is in 1oz Britannia's, which are of course CGT free. If I were to sell several ounces at once, do I need to inform HMRC to cover myself, as I imagine they'd be interested in tens of thousands of funds of extra 'income'.

I'll mostly likely use somewhere like Atkinsons to sell to, so will be direct bank transfer. 

Is it best to inform them soon after the funds arrive that the transaction is CGT exempt? Do they ask for proof of the type of coin sold, to verify CGT exemption? Or best to wait for them to contact me months/years down the line?

Thanks!

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I wouldn't declare anything GCT free personally because they are CGT free and the Gov's got no business in knowing or taxing my CGT free coin stack and profits (or losses lol). I also don't declare because neither my holdings nor the transactions I made aren't massive. I do/will however declare non CGT free coin/bar profits over the threshold.

I'm interested in following up with this. I am curious myself - IF one day tax man comes for proof, how do I prove I sold GCT free PMs/coins? Do I have to keep my own sales receipts and records?

Apologies for hijacking the thread @Muscipula but I believe these are good questions - never thought of those. Thank you for bringing those up!

Always shipping with re-used or biodegradable packaging.

Looking to sell some items to fund a holiday. I've got some items for sale. PM me or check my profile if interested: Hitler's 3rd Reich 2 Reichsmark Coins, Roman Imperial Denarii and Other silver coins/items.

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21 minutes ago, stackerp5 said:

I wouldn't declare anything GCT free personally because they are CGT free and the Gov's got no business in knowing or taxing my CGT free coin stack and profits (or losses lol). I also don't declare because neither my holdings nor the transactions I made aren't massive. I do/will however declare non CGT free coin/bar profits over the threshold.

I'm interested in following up with this. I am curious myself - IF one day tax man comes for proof, how do I prove I sold GCT free PMs/coins? Do I have to keep my own sales receipts and records?

Apologies for hijacking the thread @Muscipula but I believe these are good questions - never thought of those. Thank you for bringing those up!

 

Not a problem @stackerp5 - I agree these are important questions that need consideration. If gold performs as well as many expect over the next 5-10 years, it may not take many 1 oz coins/bars to attract significant attention, especially since there are rumours that CGT rates/allowances will be double/halved.

The only past experience I have with HMRC is that they seem to be "triggered" when a big purchase, such as a house/land is made. If they can't see an obvious path where each penny of the funds originated from, they'll certainly demand thorough records.

We're not doing anything wrong here, so have nothing to worry about from a legal point of view, though I'd like to avoid any potential 'payout' day being soured by having to battle with HMRC for months proving my innocence.

I'm keeping the following records currently:

1. PDF's of online invoices (bulk of my purchases made @ Atkinsons currently) - important in case their online account history gets removed/reset (as happened to my royal mint account a few months ago)

2. PDF's/screen captures of my bank balance, showing the corresponding transaction amount

3. The printed receipts that arrive with the order. 

I think I'm most interested in being upfront to HMRC when it comes time to sell - it'd be nice to remain anonymous, but I don't think it'll be possible to have several large deposits (with no corresponding tax returns) escape their attention.

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If they are CGT exempt then I don't think you need to tell HMRC anything about your disposal of the coins or the "gain" you make.  Sterling currency (which includes a 1 oz Britannia) is not a chargeable asset for CGT purposes.

There is a Chards note on the subject here

Capital Gains Tax on Bullion | Chards

Of course you need to make sure you do not fall into the trap of "trading" in which case you would be making an income and not realising a capital gain.

As to records keep all the records you possibly can.  I confess I would not have thought of the bank balance screen caps but then again I get my bank statements the old fashioned way.

And of course who knows what desperate measures Mr Sunak may take to balance the books so keep an eye out on Wednesday.

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26 minutes ago, Seasider said:

Of course you need to make sure you do not fall into the trap of "trading" in which case you would be making an income and not realising a capital gain.

I find it really interesting that the RM register 3 of the same coins with their new website on customer's accounts after a purchase of only 1 item type.

I wouldn't want to be seen and treated as a "trader" at some point in the future - I'm a collector and always have been, so to cover that point, I emailed the RM to point that out and to note that I have always purchased 1 of any coin type.

Might be worth doing the same and keeping that on record!? 🤔

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11 minutes ago, GoldenGriffin said:

Might be worth doing the same and keeping that on record!?

Yes though I think they will look more closely at what and how often you sell things rather than what you buy.

On the other hand they may want to know what you did with the other two coins.😁

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1 hour ago, Martlet said:

though will count as a disposal.

I did wonder about that but if sterling does not count as an asset for CGT purposes (TCGA S21(1)(b)) then when I sell the Britannia I have not disposed of an "asset" so presumably it doesn't count towards the notification requirement?

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I thought for UK residents any proceeds from the disposal of precious metal should be reported to HMRC, even though some PMs may be CGT free. If you have made a profit and your your PM is CGT free then there is nothing to pay. If you have made a loss on your disposal then you can carry forward those losses and offset them against any future gains but this can only be done if you have reported the loss in the first place. 

I then went on the HMRC website and discovered that coins and stamps are categorised as personal possessions and that anything over £6,000 needs to reported. But the annual exemption is £12,300. I'm more confused than when I started!!!!!

https://www.gov.uk/capital-gains-tax-personal-possessions

Any accountants on the forum who can shed more light on this???

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I would have thought that as they are not chargeable assets (that is, they are exempt from CGT), so you don't need to notify HMRC of any disposals.

EDIT for clarity - I am specifically referring to UK legal tender precious metal bullion coins here.

 

In the same way as if you sold a car for a profit, you wouldn't need to notify HMRC that you sold the car, because cars are not chargeable assets unless you are a trader (and then it's trading income).

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