Capital Gains Tax. Trying to get my head around it.

[HighlandTiger]

Ok, I've been doing some light reading on the CGT, thanks to the wonderfully easy to navigate HMRC website, (yeah right), and i've come to a couple of conclusions.

 

Ok we all know that sterling coins are CGT free, but what do we do about selling our non sterling coins. Yes there is a limit per year of £11,000 profit before you have to pay CGT, but I think there are other parts of the CGT rules than also apply to coins.

 

Coins are classed as Chattels, and there are a couple of pertinent rules.

TCGA92/S262

There is no chargeable gain on the disposal of a single chattel if the gross consideration does not exceed £6,000.

 

This means that if any single item is sold for less than £6k then it is CGT free.

 

However there is another ruling with regards to "sets" and "collections"

 

CG76632 - Chattels: sets of assets: identifying a set

The special rules which CG76631 tells you about only apply in cases involving a set of assets.

The dictionary definition of a set is a number of things which belong together because they are essentially similar or complementary to each other.

However, that definition does not entirely fit with the rules in Section 262 (4). The dictionary definition would treat all the seats in a cinema or theatre as similar to each other but these would not be a set for Capital Gains Tax purposes.

We, therefore, take the view that a number of articles will only form a set if

• they are essentially similar and complementary

and

• their value taken together is greater than their total individual value.

 

 

So reading between the lines, any coin you sell as long as it's below £6k and isn't part of a set, (say like a proof set of 4 coins etc), it will be CGT free. Which to be honest is most of the bullion coins we have in our possession. 

 

So in other words practically EVERY bullion coin be it British or Foreign will be classed as CGT free.

 

Am I reading this right or does someone else have a different take on this

[II DALTON II]

Capital Gains tax is claimed on DECLARED profits.

 

You catch my drift?

[HighlandTiger]

Capital Gains tax is claimed on DECLARED profits.

 

You catch my drift?

 

LOL, I'm already way ahead of you there. I was just trying to get my head round the rulings that's all. 

 

I can guarantee I will NEVER make ANY profits when it comes to selling my PM's.  

 

[Dieselbhoy]

im totally lost on the whole CGT thing im not the brightest bull in the woods

 

 

Capital Gains Tax Exempt Bullion

Are there any CGT exempt bullion products? The simple answer is yes. Capital Gains Tax is exempt on all British legal currency. This includes gold Britannia coins, silver Britannia coins and gold Sovereigns.

so does that mean if i buy something like say a canadian gold coin i would need to pay CGT,but if i bought a brittania coin or sovereign then i wont, and what about bars of gold or silver even a small 1oz silver bar would that mean id have to pay CGT

a complete minefield in my head with the whole tax thing

[Paul]

(from our beloved BBP  - Blatantly Betraying Privacy)

 

Capital Gains Tax or CGT is a tax on the gain or profit you make when you sell anything, give away or otherwise dispose of something. It applies to assets that you own, such as bullion, shares or property. There's a tax-free allowance and some additional reliefs that may reduce your Capital Gains Tax bill. Most bullion investors will never have to pay this tax due to the size and value of their investment however, it is important that investors know where they stand.

Capital Gains Tax is only payable if an investor realises over £10,900 of profit in one financial year. Be mindful that the £10,900 limit is not the total value of selling your bullion, but purely the profit made from your original outlay. For example, if an investor brought some gold bullion in 2013 for £30,000 and sold it in 2014 for £40,900, no Capital Gains Tax would be due as only the £10,900 profit made is taken into consideration. However, this single transaction would constitute the investors full tax free allowance for the year and any other profit made would be taxable at a rate between 18-28%. Please note the tax free limit of £10,900 is only set for the financial year of 2013-2014 and is reviewed every year. Click here to access the Capital Gains Tax section of the HMRC website for more information.

Please note it is the responsibility of the individual investor and not that of BullionByPost to declare any Capital Gains Tax payable. Here at BullionByPost, we keep records of all transactions made for 7 years however we do not voluntarily forward details on to the HMRC unless specifically requested. We advise that you speak to your accountant in further detail to ensure your personal situation is in order.
 

Capital Gains Tax Exempt Bullion

Are there any CGT exempt bullion products? The simple answer is yes. Capital Gains Tax is exempt on all British legal currency. This includes gold Britannia coins, silver Britannia coins and gold Sovereigns. Meaning, you can make an unlimited tax free profit on investments of any size and value on all these British legal currency bullion coins. CGT is payable on all other gold and silver coins which do not fall into the category and all gold and silver bullion bars are taxable.

View our full range of Capital Gains Tax Free Gold Coins 
 

How to Avoid Paying Capital Gains Tax on Gold? 

Many investors choose to invest in smaller unit gold coins or smaller gold bullion bars in order to pay no CGT, or as little CGT as possible when selling their gold bullion. This can be avoided or minimised by part selling bullion over more than one financial year. For example, if an investor brought £60,000 of gold coins in 2012 which later in 2014 were worth £80,000, instead of realising the full £20,000 profit right away, the investor could sell half the coins in 2014 for a £10,900 tax free profit and sell the remaining gold coins in another financial year. However, please be aware and take into consideration the gold price is constantly changing so the remaining gold coins could be worth less (or more) within another financial year. This is a problem that is unlikely to be an issue when realising the value of silver bullion due to the substantially lower unit prices associated with silver bars and coins.
 

Buy CGT Free British Gold Coins

Despite British gold bullion coins attracting a slightly higher premium than Krugerrands, it is advised most UK investors buy gold sovereigns and half sovereigns for smaller units, and gold Britannia coins for larger 1 oz units. Both British gold coins are Capital Gains Tax exempt and offer the ultimate flexibility for investors.

With wealthy gold investors in mind, anyone planning on spending a substantial amount of money on gold should look no further than sovereigns and the gold Britannia coin. To help highlight the potential benefits of buying British gold coins, a gold investment of £50,000 in September 2007 would be worth over £150,000 in November 2011. If this gold investment was made in any way other than British gold coins the gain would be liable to Capital Gains Tax. Therefore the tax saving to a CGT paying individual looking to realise this investment would be up to £28,000. Obviously if the gold price continued to increase and the investor chose to hold on to their gold the tax savings could be even greater.

If you have any further questions regarding Capital Gains Tax, please speak to your accountant or click the following link to visit the CGT section of the HMRC website: https://www.hmrc.gov.uk/cgt/

[Dave]

Anyone even thinking about capital gains and other taxes should not be stacking , the reason to stack is the deliberate avoidance of such taxes and complete privacy of your dealings, remember this when your uploading your latest purchase onto your computer , and how helpful you can be to the tax and vat man

[garthy]

Capital gains tax is separate to income tax.

 

Our capital gains tax free allowance per year is £10,900, That's quite a bit when you take into account the amount you first paid for your gold or silver.

 

Say you bought a 1oz gold coin for £800 and sold in for £1000 your capital gains would only be £200, thing is the tax man will never know the amount we paid in the first place unless we tell them. 

[Dieselbhoy]

"HMRC's bank account for any outstanding PAYE and Class 1 NICs for the tax year ending 5 April 2014."

 

so does that mean you can sell an amount on the 4th april then a day or two sell another amount and you could avoid it as you could say they states per tax year and not in a 12 mnth period

[Dieselbhoy]

Capital gains tax is separate to income tax.

 

Our capital gains tax free allowance per year is £10,900, That's quite a bit when you take into account the amount you first paid for your gold or silver.

 

Say you bought a 1oz gold coin for £800 and sold in for £1000 your capital gains would only be £200, thing is the tax man will never know the amount we paid in the first place unless we tell them. 

ahhhh getting what you say, i suppose in that way you are better buying from a private dealer than one that will keep your records and give to the robbing swines at HMRC

[garthy]

"HMRC's bank account for any outstanding PAYE and Class 1 NICs for the tax year ending 5 April 2014."

 

so does that mean you can sell an amount on the 4th april then a day or two sell another amount and you could avoid it as you could say they states per tax year and not in a 12 mnth period

 

Yep

[Paul]

If you are seriously worried about CGT and its implication for yourself.

 

You need to ask your own accountant or question the HMRC directly yourself

 

Everyone here is different and will give a different opinions as a proportion of users here who value freedom and privacy from banks/credit & loan companies/government/HMRC etc. and will do everything than can to keep out of their gun-sights

 

Some folk will give you an opinion which may fall a little outside of the law

 

(often a little 'thanks', 'acknowledgment' or a 'like' goes a long way to encourage people to reply as opposed to answering responses yet further questions)

[garthy]

ahhhh getting what you say, i suppose in that way you are better buying from a private dealer than one that will keep your records and give to the robbing swines at HMRC

 

I'd like to think no dealer would pass on our purchases to HMRC but you never know, there are some I wouldn't trust 100%, bullion by post springs to mind.

[Dieselbhoy]

I'd like to think no dealer would pass on our purchases to HMRC but you never know, there are some I wouldn't trust 100%, bullion by post springs to mind.

yeah i found that out the other day i was already set to buy my first purchase of them but then read the thread up on the forum and then decided to look elsewhere

[motorbikez]

I think people are getting too bogged down with the minutia of CGT, in practice if you apply a little common sense no one who spends less than 30-50k a year need worry about this tax and as Paul says if it is of major concern to you go and see a professional such as an accountant to clarify things for you.

 

I think there may be an indexation allowance as well so don't worry about it.You could gift some coins to your wife etc,you could sell some coins on the 5th of April then some more on the 7th so potentially you would have without splitting hairs £44K tax free.You may also be able to set losses against your profits etc etc etc.

 

What I'm saying here is you have to be a very very heavy investor to bother about this.

[Paul]

I sense 95% of people on the board will not be affected in one way by CGT & most will be planning to unload in their pension years 1oz at a time to supplement their pension(s) or if there is a significant upside rise in coming years

 

Anyone with £100,000+ invested in gold would not have to ask here about CGT because they would have had to foresight to plan and get advice on the best strategy of how to minimse their personal taxation from their accountant professional prior to buying the £100,000+ of gold

 

If you get the fee of your accountant back in tax saved it is indeed money very well spent

[motorbikez]

I sense 95% of people on the board will not be affected in one way by CGT & most will be planning to unload in their pension years 1oz at a time to supplement their pension(s) or if there is a significant upside rise in coming years

 

Anyone with £100,000+ invested in gold would not have to ask here about CGT because they would have had to foresight to plan and get advice on the best strategy of how to minimse their personal taxation from their accountant professional prior to buying the £100,000+ of gold

 

If you get the fee of your accountant back in tax saved it is indeed money very well spent

 

 

Agree with that 100%

[Pete]

I think after the falls in PMs some of us would be facing capital losses, not gains, if we were selling right now.

Capital losses can be carried forward into future years - whoopee !!

Now if Brits are free of capital gains and you sold at a loss then I assume you cannot accrue the capital loss ?

[Dune69]

From what i remember from a few years ago manly dealing with shares at the time.. You can gift your spouse part of your investment and they can then use their allowance .. £10,900 each

If i remember rightly you can also carry forward losses from a previous year to offset against gains