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New to Gold and worried


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Hi all, this is my first post glad to be here with you all,

OK, so I`m 61 and retired, I was hearing lots of scary stuff about the collapse of currency banks etc and decided to do something for myself. Without getting any advice I went to the royal mint and spent half of my savings on 1.5 Kg of gold in 500g bars. At the time I paid 68000 pounds and its now around 63000 spot price.

I`m told the because its bullion any profit will be subject to CGT and that I should have bought coins. I`m probably here too late but would welcome any advice.

 

Cheers Pete

 

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Hello Pete, I have moved your topic to the 'Welcome new members' section as it is your first post :) 

You are correct in that gold bars attract CGT whereas gold coins (that usually sell less than 1.9x the value of spot) and are UK legal tender currently have no CGT in the UK. Do bare in mind that you have a CGT allowance of around £12,300 per year, so if you are releasing that or less then there is no CGT to pay. e.g. you buy £10k of gold and sell for £22,300, meaning a 'profit' of £12,300, which is your CGT allowance so there wouldn't be any tax to pay on that disposal. You can split sales across multiple years to try to reduce the CGT. 

Hope this helps :) 

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Welcome to the forum!

So, the following is not formal financial advice - but how I understand CGT

Capital gains tax is only payable if you make a capital gains profit over the yearly threshold of about £12,300 (I forget the exact number) per person per year. If you make £15,300 profit on an item you have to declare it to HMRC and you will pay tax on the profit over the allowance, in this example that would be £3000 tax.

If you are married you can also use your partner's allowance in a tax year too making a total of £24,600

So, unless your gold bars earn more than that in a given year you won't even have to declare anything and you won't have to pay any taxes.

Gold UK coins that are £ denominated are exempt from calculations, so you can ignore them.

Hope that helps!

Hold your gold for a long time, if you can afford it and you will be just fine.

Visit my website for all my Hand Poured Silver: http://backyardbullion.com

And check out my YouTube channel 

https://www.youtube.com/backyardbullion

 

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One thing I will add, I have always thought that if you ever get to be in a position to have to worry about and pay capital gains tax then you are in a really good position and there are worse things to be worried about in life!

Visit my website for all my Hand Poured Silver: http://backyardbullion.com

And check out my YouTube channel 

https://www.youtube.com/backyardbullion

 

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54 minutes ago, BackyardBullion said:

If you make £15,300 profit on an item you have to declare it to HMRC and you will pay tax on the profit over the allowance, in this example that would be £3000 tax.

@BackyardBullionshould it be "pay tax ON the £3,000" I don't know the rate though ?

 Edit, just seen half right just a slight wording bit

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Oh yeah, sorry I worded that wrong, probably the painkillers I'm on tonight for my dislocated Knee 😉

I forget the rates but it is based on what tax bracket you are in.

Visit my website for all my Hand Poured Silver: http://backyardbullion.com

And check out my YouTube channel 

https://www.youtube.com/backyardbullion

 

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54 minutes ago, TringSilver said:

@BackyardBullionshould it be "pay tax ON the £3,000" I don't know the rate though ?

 Edit, just seen half right just a slight wording bit

 

it should read £3000(£15300-£12300) taxable at whatever the cgt rate is.

also your cgt allowance is shared across all cgt applicable assets for that tax year.

ie if you've already used up all of your cgt allowance by selling your house that year,

in the above example, then all of the £15300 is above your allowance and cgt taxable.

 

buying bullion gold sovereigns would make the accounts nice and simple.

 

HH

Edited by HawkHybrid
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4 hours ago, PeteUK1960 said:

Hi all, this is my first post glad to be here with you all,

OK, so I`m 61 and retired, I was hearing lots of scary stuff about the collapse of currency banks etc and decided to do something for myself. Without getting any advice I went to the royal mint and spent half of my savings on 1.5 Kg of gold in 500g bars. At the time I paid 68000 pounds and its now around 63000 spot price.

I`m told the because its bullion any profit will be subject to CGT and that I should have bought coins. I`m probably here too late but would welcome any advice.

 

Cheers Pete

 

Personally i would look to selling your bars and getting UK gold coins at some point. But not at a loss.
I presume you got these https://www.royalmint.com/invest/bullion/bullion-bars/gold-bars/500-g-gold-bar-cast/

image.png.c7c239c01941097d9bf12d3c781e1887.png

There are a number of reasons for this:

  • The CGT is a point - currently UK tax payers don't pay CGT on UK coins. So there may be the issue of CGT in the future. 
  • A 500g bar is a heavy duty piece of gold to sell. At spot right now that is £20 770. Let's say you put one up for sale on the forum - there aren't many here who would be potential takers. There would be lots of admiring looks but not many here with the firepower to bag such an item or indeed the inclination to buy such a large bar.
  • You are stuck with dealers mainly to sell back to and they are going to give you the bottom book price - they don't want to get stuck with such a bar. This bar might even end up going to melt. 
  • If it goes to a dealer then that information will likely be transmitted to HMRC. This isn't to imply you wouldn't have told them if you incurred a CGT liability but who the hell knows if you sold 60 odd gold sovereigns?
  • Gold bars are not trusted as much as coins. The bigger the bar the less they are trusted. It is much easier to fake a gold bar than say a gold sovereign.
  • When a person needs a bit of cash, with a 500g bar they have to sell the whole thing. If they had 60 sovereigns they could sell 1 sovereign or as many sovereigns up to their 60 sovereigns that they need to.

i am mentioning this b/c it may be something you would want to think about at some point. i am involved in the Kinesis monetary system. i think Kinesis would take such a bar in their Exchange Physical for Digital Gain liquiditiy when you exchange physical gold to digital | Kinesis Money

There would be a cost and i'm not sure how much it would be. You would get the bar(s) switched into KAU tokens in the system. Each KAU = title over 1g of gold. You can send, spend and sell these tokens. The yield system should be starting to pay its first yield on 'minting' soon. There is a holder's yield, so you could hold the gold inside the system and get paid a holder's yield which would be paid in KAU. The vaulting is free. If and when you wanted to spend your gold, a GBP debit card is due to be launched in the next few months. There will be a bank account associated with the Kinesis monetary account. It is something possibly to think about but not just yet. i mention it, so that i have mentioned it and perhaps later this year if you still have your bars it might be something to consider.

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While they look amazing, bars like these are for very rich people with a few million to spare, not really for folks to put half their life savings in. I'd personally would get rid of them at the first opportunity without making a loss and use half the proceeds to buy Sovereigns or Britannias .  

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13 hours ago, PeteUK1960 said:

Hi all, this is my first post glad to be here with you all,

OK, so I`m 61 and retired, I was hearing lots of scary stuff about the collapse of currency banks etc and decided to do something for myself. Without getting any advice I went to the royal mint and spent half of my savings on 1.5 Kg of gold in 500g bars. At the time I paid 68000 pounds and its now around 63000 spot price.

I`m told the because its bullion any profit will be subject to CGT and that I should have bought coins. I`m probably here too late but would welcome any advice.

 

Cheers Pete

 

Welcome to the forum, and don't worry too much. Some great advice is given and you are in a comfortable spot to be in. Sell the bar in some time (with a little profit) and buy a bag of gold coins :)

 

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Great Advice,👌 any other possible newbies having a browse? A tip I picked up on was consider bullion rather than numismatic sets as you may struggle?  to sell in a hurry if needed, each to their own and happy stacking, 

the Gorillas at Wallstreet Silver will be proud of you. 😉

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23 hours ago, sixgun said:

Personally i would look to selling your bars and getting UK gold coins at some point. But not at a loss.
I presume you got these https://www.royalmint.com/invest/bullion/bullion-bars/gold-bars/500-g-gold-bar-cast/

image.png.c7c239c01941097d9bf12d3c781e1887.png

There are a number of reasons for this:

  • The CGT is a point - currently UK tax payers don't pay CGT on UK coins. So there may be the issue of CGT in the future. 
  • A 500g bar is a heavy duty piece of gold to sell. At spot right now that is £20 770. Let's say you put one up for sale on the forum - there aren't many here who would be potential takers. There would be lots of admiring looks but not many here with the firepower to bag such an item or indeed the inclination to buy such a large bar.
  • You are stuck with dealers mainly to sell back to and they are going to give you the bottom book price - they don't want to get stuck with such a bar. This bar might even end up going to melt. 
  • If it goes to a dealer then that information will likely be transmitted to HMRC. This isn't to imply you wouldn't have told them if you incurred a CGT liability but who the hell knows if you sold 60 odd gold sovereigns?
  • Gold bars are not trusted as much as coins. The bigger the bar the less they are trusted. It is much easier to fake a gold bar than say a gold sovereign.
  • When a person needs a bit of cash, with a 500g bar they have to sell the whole thing. If they had 60 sovereigns they could sell 1 sovereign or as many sovereigns up to their 60 sovereigns that they need to.

i am mentioning this b/c it may be something you would want to think about at some point. i am involved in the Kinesis monetary system. i think Kinesis would take such a bar in their Exchange Physical for Digital Gain liquiditiy when you exchange physical gold to digital | Kinesis Money

There would be a cost and i'm not sure how much it would be. You would get the bar(s) switched into KAU tokens in the system. Each KAU = title over 1g of gold. You can send, spend and sell these tokens. The yield system should be starting to pay its first yield on 'minting' soon. There is a holder's yield, so you could hold the gold inside the system and get paid a holder's yield which would be paid in KAU. The vaulting is free. If and when you wanted to spend your gold, a GBP debit card is due to be launched in the next few months. There will be a bank account associated with the Kinesis monetary account. It is something possibly to think about but not just yet. i mention it, so that i have mentioned it and perhaps later this year if you still have your bars it might be something to consider.

Very informing thank you

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Wow, I`m blown away I already feel "Safer". At my first opportunity I will definately start trading in for coins. CGT is now less of a worry now I know about the joint allowance, all priceless information thank you

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On 12/05/2021 at 22:33, sixgun said:

Personally i would look to selling your bars and getting UK gold coins at some point. But not at a loss.
I presume you got these https://www.royalmint.com/invest/bullion/bullion-bars/gold-bars/500-g-gold-bar-cast/

image.png.c7c239c01941097d9bf12d3c781e1887.png

There are a number of reasons for this:

  • The CGT is a point - currently UK tax payers don't pay CGT on UK coins. So there may be the issue of CGT in the future. 
  • A 500g bar is a heavy duty piece of gold to sell. At spot right now that is £20 770. Let's say you put one up for sale on the forum - there aren't many here who would be potential takers. There would be lots of admiring looks but not many here with the firepower to bag such an item or indeed the inclination to buy such a large bar.
  • You are stuck with dealers mainly to sell back to and they are going to give you the bottom book price - they don't want to get stuck with such a bar. This bar might even end up going to melt. 
  • If it goes to a dealer then that information will likely be transmitted to HMRC. This isn't to imply you wouldn't have told them if you incurred a CGT liability but who the hell knows if you sold 60 odd gold sovereigns?
  • Gold bars are not trusted as much as coins. The bigger the bar the less they are trusted. It is much easier to fake a gold bar than say a gold sovereign.
  • When a person needs a bit of cash, with a 500g bar they have to sell the whole thing. If they had 60 sovereigns they could sell 1 sovereign or as many sovereigns up to their 60 sovereigns that they need to.

i am mentioning this b/c it may be something you would want to think about at some point. i am involved in the Kinesis monetary system. i think Kinesis would take such a bar in their Exchange Physical for Digital Gain liquiditiy when you exchange physical gold to digital | Kinesis Money

There would be a cost and i'm not sure how much it would be. You would get the bar(s) switched into KAU tokens in the system. Each KAU = title over 1g of gold. You can send, spend and sell these tokens. The yield system should be starting to pay its first yield on 'minting' soon. There is a holder's yield, so you could hold the gold inside the system and get paid a holder's yield which would be paid in KAU. The vaulting is free. If and when you wanted to spend your gold, a GBP debit card is due to be launched in the next few months. There will be a bank account associated with the Kinesis monetary account. It is something possibly to think about but not just yet. i mention it, so that i have mentioned it and perhaps later this year if you still have your bars it might be something to consider.

Yes those are the exact bars.

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On 12/05/2021 at 22:33, sixgun said:

Personally i would look to selling your bars and getting UK gold coins at some point. But not at a loss.
I presume you got these https://www.royalmint.com/invest/bullion/bullion-bars/gold-bars/500-g-gold-bar-cast/

image.png.c7c239c01941097d9bf12d3c781e1887.png

There are a number of reasons for this:

  • The CGT is a point - currently UK tax payers don't pay CGT on UK coins. So there may be the issue of CGT in the future. 
  • A 500g bar is a heavy duty piece of gold to sell. At spot right now that is £20 770. Let's say you put one up for sale on the forum - there aren't many here who would be potential takers. There would be lots of admiring looks but not many here with the firepower to bag such an item or indeed the inclination to buy such a large bar.
  • You are stuck with dealers mainly to sell back to and they are going to give you the bottom book price - they don't want to get stuck with such a bar. This bar might even end up going to melt. 
  • If it goes to a dealer then that information will likely be transmitted to HMRC. This isn't to imply you wouldn't have told them if you incurred a CGT liability but who the hell knows if you sold 60 odd gold sovereigns?
  • Gold bars are not trusted as much as coins. The bigger the bar the less they are trusted. It is much easier to fake a gold bar than say a gold sovereign.
  • When a person needs a bit of cash, with a 500g bar they have to sell the whole thing. If they had 60 sovereigns they could sell 1 sovereign or as many sovereigns up to their 60 sovereigns that they need to.

i am mentioning this b/c it may be something you would want to think about at some point. i am involved in the Kinesis monetary system. i think Kinesis would take such a bar in their Exchange Physical for Digital Gain liquiditiy when you exchange physical gold to digital | Kinesis Money

There would be a cost and i'm not sure how much it would be. You would get the bar(s) switched into KAU tokens in the system. Each KAU = title over 1g of gold. You can send, spend and sell these tokens. The yield system should be starting to pay its first yield on 'minting' soon. There is a holder's yield, so you could hold the gold inside the system and get paid a holder's yield which would be paid in KAU. The vaulting is free. If and when you wanted to spend your gold, a GBP debit card is due to be launched in the next few months. There will be a bank account associated with the Kinesis monetary account. It is something possibly to think about but not just yet. i mention it, so that i have mentioned it and perhaps later this year if you still have your bars it might be something to consider.

Yes I will consider Kinesis thanks

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14 hours ago, RustyShackleford said:

Owning 1 1/2Kg of gold is a nice problem to have. 😁

 

we have 3 kids and 10 grandkids and id love to create a pile to leave them . My wife and you guys are the only people on earth that know, oh and the RM :)

 

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On 12/05/2021 at 20:23, BackyardBullion said:

One thing I will add, I have always thought that if you ever get to be in a position to have to worry about and pay capital gains tax then you are in a really good position and there are worse things to be worried about in life!

Agreed

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On 12/05/2021 at 22:02, HawkHybrid said:

 

it should read £3000(£15300-£12300) taxable at whatever the cgt rate is.

also your cgt allowance is shared across all cgt applicable assets for that tax year.

ie if you've already used up all of your cgt allowance by selling your house that year,

in the above example, then all of the £15300 is above your allowance and cgt taxable.

 

buying bullion gold sovereigns would make the accounts nice and simple.

 

HH

Noted thank you

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10 hours ago, PeteUK1960 said:

we have 3 kids and 10 grandkids and id love to create a pile to leave them . My wife and you guys are the only people on earth that know, oh and the RM :)

 

HMRC knows too, it's a reporting requirement for a purchase that size 😉😃

Visit my website for all my Hand Poured Silver: http://backyardbullion.com

And check out my YouTube channel 

https://www.youtube.com/backyardbullion

 

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Welcome to the forum. You have already received good advice. Good luck. It wont be a problem to flog a 500g bar with a dealer and purchase or exchange for cgt free sovereigns. Just make sure that you deal with reputable dealers that have a spotless accredited reputation. Gold is a very defensive play so now you have bought, I would just forget about it now for several years (unless you want to cash in at any point, or change into UK CGT free coins (you will lose out a bit).

 

And don’t forget the most important thing. You have not lost a penny until you actually sell.
 

Indeed, it is perfectly ok to hold and keep for many years and realise gains against currencies etc….

Edited by Oldun
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1 hour ago, BackyardBullion said:

HMRC knows too, it's a reporting requirement for a purchase that size 😉😃

I thought I recalled one of the dealers say that wasn't the case?

On a different thread it was said they needed to know who they'd made such a sale to, in case of enquiries, but that there was no requirement to report the transaction to HMRC.

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