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FAQ attempt


lightjaw

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Hi all, i thought this might be useful for new stackers. It's not finished, but its a start! All constructive criticism appreciated.

Silver Forum FAQ’s

 

This information is meant to answer some of the questions that new members may have with regards to silver and gold stacking. It will be a work in progress, but hopefully some people may find it useful.

 

The questions I see asked most often, and ones I think people might find useful are :-

 

What is the difference between proof and bullion?

 

Proof and bullion are terms used to describe coins that are minted for different reasons. Proof coins are often made more for collectors rather than stackers, but there’s nothing stopping you from collecting both. Proofs often cost more than bullion due to the type of minting used. Proof struck coins are usually crisper and better defined than bullion coins, hence the premium. Bullion coins are less defined, and are usually minted in larger quantities than proof coins and are therefore cheaper.

 

If you are only interested in the quantity of metal that you can collect for the cheapest price, bullion is usually the way to go. If you are interested in a coin that may increase in value above the cost of the metal in it, then proof might be better. There is no guarantee that a proof coin will increase in value over time, a number of factors can influence this. Some bullion coins have risen in value in their own right.

 

Should I collect coins or bars?

 

We can’t tell you this, it needs to be you who decides after looking at the information available. It depends very much on your reasons for collecting. Sometimes the cost of a 1oz bar can be less than a 1oz coin for example due to the minting/casting process used but not always. In the UK we have VAT which adds an extra 20% to the cost of silver coins and bars, but not to gold coins and bars. You can buy silver coins from Europe without paying VAT though, from companies such as Silver To Go. When you buy silver coins or bars from sellers in the EU, the vat is paid in the country you buy the coin from. So, if a country has a 5% vat rate for example, you would only pay that. Because it is in the EU, you do not pay additional taxes when the item arrives in the UK. Importing silver from non EU countries will make you liable for additional charges when it comes into the UK. Based upon this, it is often cheaper to buy silver coins than bars due to the VAT implication, but there are things called coin bars… ;)

 

I want to collect precious metals. What will go up in value the most over time?

 

If only we knew! No one can promise 100% that an item will increase in value a lot over time. If we did know, we would all be sitting on beaches with cocktails while our private Michellin starred chef cooks our steaks.

 

While we can’t with any certainty say what will rise over time, there are some things to look out for:-

 

1)      Is it part of a set ie lunar

 

2)      Does the coin have a new image each year ie panda

 

3)      Is it minted in low numbers

 

4)      Is there an existing collector base

 

These can be an indicator that an item might increase over time, but is in no way a guarantee, and there are many other things that could cause a rise. Bear in mind that if you are collector for a long time, and invest only in Chinese panda coins, then when you come to sell in 20 years you might find that everyone else who has been collecting them is selling too, and there is a glut in the market. Other people on the forum can probably give you more detailed advice if you ask.

 

 

 

I have seen CGT free advertised on bullion dealer websites, what does this mean?

 

CGT stands for Capital Gains Tax. In the UK, this is a tax levied on profit that you make from selling an item. Many sellers use CGT free as a way to convince people that a particular item is a good buy. But is it?

 

Well, it depends (and probably not).

 

There is a CGT threshold which in 2016/2017 is £11,100.

 

Meet Bob. Bob decides he wants to invest in precious metals and buys 10 gold coins. The amount he paid for each coin was £200.

 

The day after he buys them, all gold mines in the world simultaneously explode/aliens invade/the dead come back to life or some such world changing event occurs, and the value of each of Bobs coins suddenly rises to £5,000 each (lucky Bob). Bob decides he needs the cash, so decides to sell 3 of his coins.

 

He sells 3 coins for a total of £15,000. The amount he paid was £600, so his profit was £14,400. He has a tax free allowance of £11,100 for the year, so he is liable for tax on £3,300 of his profit.

 

What Bob could have done was to sell only 2 gold coins, meaning that no tax would have been liable on his profit. The CGT free amount is per year, so if he sold 2 coins a year, he would never have to pay CGT, as long as he doesn’t sell anything else that he profits from that takes him over his yearly limit. So unless you are looking to make over £11,100 in profit each year by selling your gold/silver, you would do better to buy the cheapest/most likely to rise in value item, than worry about CGT.

Coins in the UK which are CGT free are Sovereigns, Silver Brits, Gold Brits, basically coins that are made by the Royal Mint and have a face value in UK £.

 

If however CGT is a concern for you because you have so many coins/bars please feel free to send me a PM so I can help you by taking some of it off your hands to…look after…….

 

I have seen on youtube videos/websites that silver and gold are going to shoot up in value soon, should I put all my money into them?

 

Many people online/on youtube have their own agendas. They want people to buy precious metals because it benefits them in some way. Take everything you read and watch with a massive pinch of salt. Don’t get sucked up with the hype, relax and look into it yourself. If, after looking into it in detail it makes sense, then you need to make that choice. Just be wary.

 

Metals may go up, they may go down. In a year silver might be £50 an oz, it might be £5. We don’t know, and neither do the “experts”. Many of us think it might hence our collecting, but there is no guarantee. Make your own choice.

 

Should I collect silver, gold or both?

 

Collect whatever you prefer. Gold can sometimes be bought at a lower premium than silver, but then many people say silver is very undervalued and has more room to grow in price. Both have their benefits and disadvantages, but look at the information out there and make your choice.

 

Do I have to pay VAT on silver and gold?

 

Gold = no

 

Silver = maybe, see the answer to the second question.

 

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  • Founder & Administrator
2 minutes ago, HelpingHands said:

@ChrisSilver  When we have a final draft we could pin it in the new member section.

Yes, just mention me again when you want me to do so.

Title might need to be altered slightly just so it is clear that it is a FAQ in regards to buying bullion rather than an FAQ about how to use the forum?

My posts are my personal opinions, they do not constitute advice or financial advice.

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I like your FAQ post but have one comment   your cgt example didn't make sense as sovereign are cgt free.   Maybe should chose another coin in the example and state sovereigns Britannia's and UK lunar are currently cgt free in the UK, bit this may change in the future ( which is another reason why you should pick coins just cos they are cgt free ) could also mention  you could split the purchase over 2 financial years 2coins March 2in April 

 

But I like the FAQ in general, should help newbies  :-)

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7 minutes ago, 4Nines7Hills said:

I like your FAQ post but have one comment   your cgt example didn't make sense as sovereign are cgt free.   Maybe should chose another coin in the example and state sovereigns Britannia's and UK lunar are currently cgt free in the UK, bit this may change in the future ( which is another reason why you should pick coins just cos they are cgt free ) could also mention  you could split the purchase over 2 financial years 2coins March 2in April 

 

But I like the FAQ in general, should help newbies  :-)

Agreed, and thanks for the message. Changed. 

I will be looking at this again tomorrow and will make the changes people have suggested. Thanks for the input all.

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If I was going to write an Beginner's FAQ (and I'm not volunteering), I would want people to take away the following concepts:

- Spot
- Premium
- Bars/Bullion/Rounds/Coins/Numismatics
- Physical/Paper/Delivered/Stored
- Price per oz
- Regionality/Tax implications
- Spread/resellability
- Gold:Silver ratio

 

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Well done on this introduction which newbies will find informative.

Just need to mention that many Lunars and other Perth Mint coins are frequently referred to as reverse proofs whilst still being bullion.
Too many eBay sellers list these coins as proof when technically they are not as the proof coins are in a class of their own ( and more often than not boxed with numbered cert., not to be confused with a printed cert. of authenticity )

I think a FAQ section could be useful BUT like many other FAQ sections on other forums the battle is finding the question you want to be answered without having to wade through long lists of crap and irrelevance. Some sort of indexing or search would make a FAQ section the Wiki of PMs but keeping headings relevant and short and content exclusively relating to the heading is not as simple as it may seem at the beginning.

:)

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  • Founder & Administrator
53 minutes ago, Pete said:

Some sort of indexing or search would make a FAQ section the Wiki of PMs but keeping headings relevant and short and content exclusively relating to the heading is not as simple as it may seem at the beginning.

We could try this perhaps http://thesilverforum.com/wiki/ all members can add records, and all premium members, official sponsors, moderators can edit any entry. Similar to how anyone can edit on wikipedia.

This is also a searchable database using the search bar at the top and selecting 'wiki'

I have added 'bullion' as an example from wikipedia, feel free to edit.

@lightjaw might be a better place to post some of your content so it is easier for members to find?

If wiki database gets some useful posts then I will put a link to it in the menu tab, and from he 'welcome new members' forum.

My posts are my personal opinions, they do not constitute advice or financial advice.

Please Follow / Like / Share to help spread the word of The Silver Forum:
TSF Instagram - TSF YouTube channel - TSF Facebook pageTSF Twitter page - TSF Threads (used mainly for sever status updates)

Billysilver's Detailed Trading Guide - great info and tips for new members trading on the forum. 

Discounts / Offers
COTR Vouchers for Premium Members

Official TSF branded NGC label via COR grading
50% discount off of TSF mugs for Platinum Premium Members. (see info in Platinum Lounge)
Platinum Premium Members: Offers from selected Dealers - 15 dealers currently in the programme

Interested in Travelling?
Join our sister forum: The Travel Forum and share your journey.
The Travel Forum

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Some of the abbreviations were confusing at first. 

PM - Perth Mint. 

PM - Precious metals. 

PM - Private message. 

Can be worked out in context but it's confusing to begin with. 

I believe there is already a glossary somewhere on the site, it was done ages ago.

Stacker since 2013

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I have added a few topics to the Wiki section just to start the ball rolling.

I didn't want to refine content, as time consuming, as this is I assume still under testing / trial.

 

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On 21 April 2016 at 08:18, lightjaw said:

Just to let people know I have not forgotten this thread, I have been promoted at work so this week is a bit mental. I will get back on it on the weekend.

Promotion eh? Sounds like a good excuse, if one were needed, to add more ounces to the stack.?

“Nowadays people know the price of everything and the value of nothing.” Oscillate Wildly

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