New to silver stacking...

[mike1097]

Hello,

I hope all is well!

From Youtube videos, and reading the very friendly community posts my fever is getting far stronger... But before I start investing, could you aid me in dealing with some of my thoughts and concerns:

1) I'm confused on capital gains tax, is this added to the price in which you pay for the item, or do I have to something when I eventually sell them, like fill in a tax form? 

1.1) This is putting me off bars as from the financial view, it's worse than certain coins if i'm paying additional taxes... Right? Bars would be far easier to store though... 

2) Some coins are exempt from the capital gains tax like the Britannia, how do I know what other coins are exempt?

3) I'm thinking of doing the November group order - To start with, from a coin point of view, i'm thinking 5 per coin i choose, thoughts? 

Thank you in advance. Any further advice would be greatly appreciated!  

Many thanks,

Michael 

 

 

 

 

[AppleZippoandMetronome]

Hello Michael and welcome to the forum! I'll try to answer your questions even though I wouldn't consider myself in any way an expert here. As far as Capital Gains Tax goes this is the tax you pay on any profit you make from selling your bullion. Any item which has a legal tender value on it - Britannias, Queens Beasts, etc - is Capital Gains Tax exempt so a lot of folks tend to focus on these.

As far as the group order goes I think that ultimately comes down to what you want and what you have the budget for. When it comes to coins I like I personally try to buy them in 5s but that is down to budget - if I had a larger budget (or more narrow interest) I would buy by the tube. I think it is important to buy what you like but also feel it is advisable to stay away from coins with too high a premium - if you are purely stacking for weight then it is best to stick with the cheaper bullion coins - Philharmonics, Maples, Britannias, etc

[sixgun]

15 minutes ago, mike1097 said:

1) I'm confused on capital gains tax, is this added to the price in which you pay for the item, or do I have to something when I eventually sell them, like fill in a tax form? 

1.1) This is putting me off bars as from the financial view, it's worse than certain coins if i'm paying additional taxes... Right? Bars would be far easier to store though... 

2) Some coins are exempt from the capital gains tax like the Britannia, how do I know what other coins are exempt?

3) I'm thinking of doing the November group order - To start with, from a coin point of view, i'm thinking 5 per coin i choose, thoughts?

i think you might be a bit confused about Capital Gains Tax. This is a tax on profits you make when you sell. You put yourself down as a UK member so i will take it you are a UK tax resident. In this case UK gold and silver coins are free of Capital Gains Tax when it comes to selling them.

You don't pay CGT when you buy - that is VAT. Gold coins are VAT free when you buy but only UK gold coins are CGT free when you sell.

Silver has VAT on it in the UK whether coins or bars. UK silver coins are CGT free when sold.

Bars are easier in many ways but they have VAT on them throughout Europe. In some EU countries you can get lower VAT coins (mainly Germany and Belgium) or even VAT free coins (from Estonia) which is what the group order is about. This makes coins and coin bars cheaper to buy.

Yes buying through the group order would be a good way to start but also buying off the forum is a good way too. You will need to upgrade to a premium member to see the selling adverts straightaway - i think this is well worth the expense if you are serious about the gold and silver hobby/obsession.

[mike1097]

15 minutes ago, AppleZippoandMetronome said:

 Any item which has a legal tender value on it - Britannias, Queens Beasts, etc - is Capital Gains Tax exempt so a lot of folks tend to focus on these.

 

Thank you for your reply! 

On Europeanmint, I am noticing many of the coins have say $5 or $0.50 in the description, so as a rule of thumb, if it has a money value like this, then it is capital tax gain free?

.

14 minutes ago, sixgun said:

You don't pay CGT when you buy - that is VAT. Gold coins are VAT free when you buy but only UK gold coins are CGT free when you sell.

 

Yes buying through the group order would be a good way to start but also buying off the forum is a good way too. You will need to upgrade to a premium member to see the selling adverts straightaway - i think this is well worth the expense if you are serious about the gold and silver hobby/obsession.

Thank you for your reply!

Okay, thanks for the information, and yes i'm from the UK. When I do sell my bullion, do I have to do anything further like fill in a tax form? It's my understanding that we are allowed £11,400 of profit before paying tax... How am i supposed to remember the price I bought them to know the profit? E.g End of this year I have £1000 worth of silver, I sell it 20 years later and that £1000 is now £1500, am is supposed to remember the specifics that i payed for something 20 years ago, with specific amount? 

I'm thinking at first I will be doing it based on weight, then at a point will move to more rarer things to increase my overall portfolio worth.

[sixgun]

10 minutes ago, mike1097 said:

Thank you for your reply! 

On Europeanmint, I am noticing many of the coins have say $5 or $0.50 in the description, so as a rule of thumb, if it has a money value like this, then it is capital tax gain free?

Thank you for your reply!

Okay, thanks for the information, and yes i'm from the UK. When I do sell my bullion, do I have to do anything further like fill in a tax form? It's my understanding that we are allowed £11,400 of profit before paying tax... How am i supposed to remember the price I bought them to know the profit? E.g End of this year I have £1000 worth of silver, I sell it 20 years later and that £1000 is now £1500, am is supposed to remember the specifics that i payed for something 20 years ago, with specific amount? 

UK silver coins - Royal Mint coins are CGT free. Everything else is not so graced.

CGT is not quite as straightforward as that - there will be inflation to factor in, then there was all the storage costs and insurance costs and purchase costs and selling costs......and so many costs you never quite managed to make a profit. So perhaps you shouldn't worry. You could maybe use family members CGT allowances, sell across tax years......

A person might for example only sell Royal Mint coins through dealers, then sell everything else keep privately. Then no-one would know. That might be what some people might do.

No-one should be paying CGT.

[mike1097]

4 minutes ago, sixgun said:

UK silver coins - Royal Mint coins are CGT free. Everything else is not so graced.

CGT is not quite as straightforward as that - there will be inflation to factor in, then there was all the storage costs and insurance costs and purchase costs and selling costs......and so many costs you never quite managed to make a profit. So perhaps you shouldn't worry. You could maybe use family members CGT allowances, sell across tax years......

A person might for example only sell Royal Mint coins through dealers, then sell everything else keep privately. Then no-one would know. That might be what some people might do.

No-one should be paying CGT.

I see. 

So only Royal mint coins are CGT free? Even if non Royal mint coins have money value like the $5 ect?

 

[sixgun]

1 minute ago, mike1097 said:

I see. 

So only Royal mint coins are CGT free? Even if non Royal mint coins have money value like the $5 ect?

 

Only Royal Mint legal tender coins are CGT free in the UK.

The value stamped on the metal from the official mint is there for legal reasons to make the metal a coin and legal tender in their country of issue. A bar can be a coin if the bars is from the official mint and has a value stamped on it.

[mike1097]

7 minutes ago, sixgun said:

Only Royal Mint legal tender coins are CGT free in the UK.

The value stamped on the metal from the official mint is there for legal reasons to make the metal a coin and legal tender in their country of issue. A bar can be a coin if the bars is from the official mint and has a value stamped on it.

 

Ahh okay! I just noticed on the Britannia it has '100 pounds' on the coin, meaning it's legal tender. In theory then, if Royal mint was to issue a 'bar' like yours with a money value, it becomes legal tender as well, and becomes exempt? 

Are other legal tenders from other countries not exempt because their legal tender is different, hence doesn't come under the exemption rule? 

[sixgun]

Just now, mike1097 said:

Ahh okay! I just noticed on the Britannia it has '100 pounds' on the coin, meaning it's legal tender. In theory then, if Royal mint was to issue a 'bar' like yours with a money value, it becomes legal tender as well? 

Are other legal tenders from other countries not exempt because their legal tender is different, hence doesn't come under the exemption rule? 

Yes if the Royal Mint issued a bar with a currency value on it then it would become legal tender.

Coins from other countries are not legal tender in the UK and so are not exempt from CGT.

[mike1097]

1 minute ago, sixgun said:

Yes if the Royal Mint issued a bar with a currency value on it then it would become legal tender.

Coins from other countries are not legal tender in the UK and so are not exempt from CGT.

Well thank you for taking the time to help me  

[mikeiones32]

 

11 hours ago, mike1097 said:

How am i supposed to remember the price I bought them to know the profit?

 

From my time buying silver / gold, I would recommend creating a simple spreadsheet to log all your purchases down from day 1 in for this exact reason (or a pen and a book if you want to go old-school) 

a page for silver and a page for gold at least, so you have some history to look back over. A year in it makes for interesting reading on buying habits, prices paid, £ average per oz etc.

 

[Agpanda]

Hi and welcome

[vand]

Worth remember that you only have to pay CGT on PROFITS above £11,800. You need to buy a LOT of silver and/or the price to go up quite a lot before that kicks in.

 

[Elements]

15 minutes ago, vand said:

Worth remember that you only have to pay CGT on PROFITS above £11,800. You need to buy a LOT of silver and/or the price to go up quite a lot before that kicks in.

 

That’s true Vand altough that’s the annual allowance for all CGTaxable assets annually per person.  There may be a situation where silver gain/loss from sale might be quite small but when sold in the same year as other CGT liable assets maybe a buy to let property sale, or significant share sale (outside an ISA) the gain/loss from silver sale may become reportable.

[StackemHigh]

I was under the impression that if the coin had the treasury backing ie pobjoy mint producing £ sterling then it would be CGT free. Is this correct?

[Martlet]

1 hour ago, StackemHigh said:

I was under the impression that if the coin had the treasury backing ie pobjoy mint producing £ sterling then it would be CGT free. Is this correct?

They are usually Isle of Man, Jersey, and so on, not technically UK legal tender.  

[Finbinfin]

Welcome to the wonderful world of stacking!

As regards CGT: It's your responsibility to record the purchase and sale price if you think you'll become liable to CGT (by earning over the 11,800 threshold on non CGT exempt items). Even if it's 20 years apart, the taxman will say well you bought all that with the aim of generating a long term capital gain so we expect you to demonstrate what you owe.

I think getting a few each of some different coins sounds like a plan. If you think you want to collect series like the kookaburra or want a flavour of the various countries' standard bullion, it's a good way to find out what you like! 

[Coolsmp]

Get an excel spreadsheet and track your silver/gold investment.. then you can see over time how much uve invested and add the spot price on a particular day... there needs to an end point to your stacking. For example, its seems pointless stacking in say 25 years time when your 60 as the silver spot is not likey to increase much if your planning on cashing in at say 65.

[silenceissilver]

22 hours ago, sixgun said:

No-one should be paying CGT.

Exactly! Let's be clear about it, CGT on PMs is a crime, just as VAT on silver. Is there a PM trade association in the UK to lobby for their abolishment?! If you try to save money in a save way, you are punished. Is there a tax when you withdraw your savings from your bank account? No, so why on precious metals?!

If you sell in Germany, there is no capital tax at all, if you bought your PMs at least one year before you sell. For this you need to keep the receipts, obviously. I have no clue if is legal to just cross the border with your metals without declaring it but I guess only to a certain extent. But who knows what taxes and export regulations will be like in 20 years! I have heard one German "gold expert" on Youtube who said the Krugerrand/bullion coins where introduced in 1967 because there was a demand for gold without serial numbers, bars have. No clue if this is really true but it could well be, I guess.

[sixgun]

59 minutes ago, silenceissilver said:

Exactly! Let's be clear about it, CGT on PMs is a crime, just as VAT on silver. Is there a PM trade association in the UK to lobby for their abolishment?! If you try to save money in a save way, you are punished. Is there a tax when you withdraw your savings from your bank account? No, so why on precious metals?!

If you sell in Germany, there is no capital tax at all, if you bought your PMs at least one year before you sell. For this you need to keep the receipts, obviously. I have no clue if is legal to just cross the border with your metals without declaring it but I guess only to a certain extent. But who knows what taxes and export regulations will be like in 20 years! I have heard one German "gold expert" on Youtube who said the Krugerrand/bullion coins where introduced in 1967 because there was a demand for gold without serial numbers, bars have. No clue if this is really true but it could well be, I guess.

i will not be paying CGT on my stack. i will make sure i am resident somewhere where there is no CGT. The pirates can go sling their hook.

[Groundup]

This thread is very interesting and informative and I have gained a lot of useful information from it.

The OP asked about CGT, he also asked about form filling/reporting, so even though UK coins are CGT free, do you have to report/fill forms in, that you have sold (UK coins), if it's under or over CGT allowance.

Just to add I don't like filling any forms out hence the question.

 

[Elements]

39 minutes ago, Groundup said:

This thread is very interesting and informative and I have gained a lot of useful information from it.

The OP asked about CGT, he also asked about form filling/reporting, so even though UK coins are CGT free, do you have to report/fill forms in, that you have sold (UK coins), if it's under or over CGT allowance.

Just to add I don't like filling any forms out hence the question.

 

You don’t need to report it if the gain is lower than the annual allowance, unless you have sold for a loss and want to declare the loss to carry forward and offset against a future potential gain.

You declare trades on your self assesment form. You notify HMRC if you want to fill one in

[Coolsmp]

Tax man always wants a cut of everything.. tell em nothing🤐

[ChrisSilver]

Welcome to The Silver Forum, some interesting questions there and some good answers

[gji25]

what you don't tell them, the less thay shall know