VAT & Gold

[Stu]

There has been some discussion in other threads regarding stocking up on silver from the EU before Brexit to take advantage of the system as it stands before low vat silver becomes unobtainable here in the UK. What has been running through my mind is what will happen with gold? As I understand it, the U.K. reluctantly released physical gold from attracting VAT when pressures came to bear from the EU and assumingly to make uk bullion dealers competitive with their European counterparts, much like the betting industry. My question is, do folks think our lovely post eu government, regardless of colour, will reimposed vat on gold when we are sovereign again? Personally, I think they will as there is a tradition for this, a lack of support for real money and no reason for them not to grab a few extra shekels where they can.

Should this come to pass, those with a physical stack would see a 20% increase in the fiat value of their stack immediately as I am guessing like silver, the resale price from private individuals would reflect the all in price? The flip side, obviously is anyone looking to add to their stack would pay 20% more. Do we stack up on gold also in this short timeframe given the above? Would we see more folks from here backing miners in shares or allocated gold accounts like bullionvault ( without vat ) as a result?

Just to focus minds, if vat was applied at today's spot, you would be looking at approximately £1200+ per Troy Oz as you are no doubt able to calculate. 

Your thoughts would be appreciated. 

 

 

[KDave]

I fear you may be right and gold is already too expensive at over 1k an ounce. I hear there are discussions on whether or not to tax chewing gum, which means anything and everything no matter how small or ridiculous is on the table to get money for the coffers in 2017 Britain.

Pure speculation here - perhaps on bullion there would be a tax, but for 'collectables' there would be exceptions? Either way I would imagine paper instruments for gold would reign in such a case for regular investing. Gold would become a long term hold if bought as physical, but it would still sell.   

There is also the possibility that CGT free status of coins could be revoked under similar circumstances. It is not so unlikely that it can't happen, but we can but play by the rules as they are, and hedge against the possibilities. Personally I am going to keep buying what I was going to buy anyway and not speculate on where the goal posts could be in 2 years time. 

The important question right now though - should I go long physical Wrigleys Extra Ice Peppermint Chewing Gum before the new tax is imposed or not? 

[Vern]

If silver does get hit from Europe with vat there might be a window of time between this and a possible gold inclusion of vat in the UK.

All the cards would have to fall just right, but it's possible I guess. 

That would seem to favour physical silver over gold for us in the UK, but you would still need to find a buyer of your silver to have the funds to convert to gold in the window that may or may not happen. 

So many other things to consider in this scenario and too many what if's, I just go with what I like. 

[4Nines7Hills]

VAT was removed from investment Gold to help competition they would be stupid to re apply  it after brexit , although I suspect they will, as its was  also stupid not having investment Silver on the margin scheme as that hindered UK competitiveness  but that is  what they chose.

Surely encouraging your citizens to invest in precious metals is preferable to the country and ecconomy then everyone being in debt but owning really nice huge tellys with limited resale value.

[Mcgrimes]

3 hours ago, 4Nines7Hills said:

Surely encouraging your citizens to invest in precious metals is preferable to the country and ecconomy then everyone being in debt but owning really nice huge tellys with limited resale value.

The general population saving isn't beneficial for the economy; people spending money on things they don't need is.

And in this sense, VAT on whatever they can justify is their way of the economy benefiting from people buying gold.

[4Nines7Hills]

until it all crashes badly like it has several times in the past