Gold coins as investment

[Neilw3030]

After seeing a SC post here for a gold coin, it has got me wondering.
1. Is it viable to collect gold coins for investment
2. Old or new
3. Limited edition or not
4. Tax implications
I am sure more questions will arise over time, but what are thought please, i am guessing that there are a number
of collectors here for investment and rarity purposes.

[Yeti]

Gold is an investment like anything else, take warren buffets advice and you can't go wrong. "Buy when low and sell when high".
I collected around £10k worth of Krugerrands a couple of years back as they were one ounce coins and easy to follow the gold fix as it's done by ounce. I bought my coins at £800 an ounce, watched it go a bit lower around £750 then chickened out when they rose to £850 an ounce and I had other more pressing investments to hand. Then I watched gold go to over £1k an ounce and it's hovered around that since. If it went back down to £800 I'd jump back in...a lot.
I'd personally stick to one ounce krugerands, you can buy sovereigns which are cheaper but I like to reference the gold spot price and know each one of my coins are worth equivalent to the days spot price. Albeit if you want to cash the coin up you'll lose up to 5% which is the spread the bullion dealer will want.

[Brighty]

Royal mint sell gold coins in 1\4 1\2 or 1 oz sizes. Bonus is, through a tax quirk as they are legal tender they are exempt from capital gains tax when you sell them, unlike bullion or krugerrands
https://www.royalmintbullion.com/Pro...old-Coins/Gold

[Neilw3030]

So best to just go cheapest as it's linked to spot price and not do the different more expensive collectible coins?
And sovereign only as its legal tender?

[Mr.D]

So best to just go cheapest as it's linked to spot price and not do the different more expensive collectible coins?
And sovereign only as its legal tender?

If you just want to invest in physical metal then I'd recommend an online service like goldmoney.

You cash up your account and then buy in by the gram.

Your purchase is backed by physically real gold in a vault ( you can even take delivery of it if you want).

The spot price is up to date , the spread is probably the lowest you can find for buying bullion. You can put in a buy or sell order and then sit and watch the spot price for a couple of minutes in real time whilst you decide whether to go through with the transaction.

You won't have to worry about securing the gold ( you do pay a small storage fee for the vault use)

All very simple and quick. You can use goldmoney grams to pay for things without liquidating the physical metal. Essentially they have created a gold backed currency but its not really used for that.

Silver and platinum are also available.

Gold Bullion is also vat free. I'm not sure coins are, could be wrong.

[murkeywaters]

Or if like me spend many a day wandering fields with a metal detector in the hope of a gold coin, there out there but rare as hens teeth plus you have to share the value with the land owner..

[Neilw3030]

If you just want to invest in physical metal then I'd recommend an online service like goldmoney.
You cash up your account and then buy in by the gram.
Gold Bullion is also vat free. I'm not sure coins are, could be wrong.

Is this method free of capital gains, or is it just B of E issued Sovereigns

[Brighty]

Is this method free of capital gains, or is it just B of E issued Sovereigns

Shouldn't think so, just the uk coins which is not just the Sovereigns. Though you'd need to make over £11k in profit for CGT to be payable with any other gold anyway. No VAT on UK coins either BTW

"The Sovereign, Britannia, Queens Beasts and Lunar Bullion coins are exempt from UK capital gains tax for UK residents only, due to being legal tender."

[vulcangascompany]

Theres a big difference between coin collecting and being solely a gold investor - personally i love the sovs but I want the bullion at the cheapest price so avoid places which offer presentation boxes and fancy certificates. Atkinsons, bullion & coin dealers have very good prices and excellent customer service. You can either buy new or ‘secondhand’ there is only a few quid difference in price. Some of Edwardian and Victorian sovs are very attractive but i never pay more than a new price for them.

As with any investment aim to buy low sell high, easier said than done though! Theres been a little pull back under $1300 this week.

[33JS]

If you just want to invest in physical metal then I'd recommend an online service like goldmoney.

You cash up your account and then buy in by the gram.

Your purchase is backed by physically real gold in a vault ( you can even take delivery of it if you want).

The spot price is up to date , the spread is probably the lowest you can find for buying bullion. You can put in a buy or sell order and then sit and watch the spot price for a couple of minutes in real time whilst you decide whether to go through with the transaction.

You won't have to worry about securing the gold ( you do pay a small storage fee for the vault use)

All very simple and quick. You can use goldmoney grams to pay for things without liquidating the physical metal. Essentially they have created a gold backed currency but its not really used for that.

Silver and platinum are also available.

Gold Bullion is also vat free. I'm not sure coins are, could be wrong.

Screw that!

Too many tales of over-sold gold by dodgy companies. If you're buying gold, there's no substitute for holding it in your own hand.

I'd worry that they were selling the same stock to multiple buyers...

Check Baird & Co in London as they have keen prices and secure delivery.

[Mr.D]

Is this method free of capital gains, or is it just B of E issued Sovereigns

No

[Mr.D]

Screw that!

Too many tales of over-sold gold by dodgy companies. If you're buying gold, there's no substitute for holding it in your own hand.

I'd worry that they were selling the same stock to multiple buyers...

Check Baird & Co in London as they have keen prices and secure delivery.

I'd be more worried about your gold bullion ending up stolen.
Why bother holding it yourself. Its not going to be worth jack if society falls anyway. Never understood this aspect of gold trading. Its an investment opportunity like any other. I don't go asking for barrels of oil or bags of sugar in other markets.

[Yeti]

Hatton garden metals seem to be the cheapest over spot. I used them to buy my one ounce coins. Fabulous company and reviews all seem to agree.

[Padders]

Hatton garden metals seem to be the cheapest over spot. I used them to buy my one ounce coins. Fabulous company and reviews all seem to agree.

I know them, they are reliable trustworthy people.

Be careful that you buy from a reliable source as there are plenty fake coins out there. I was chatting with a gold buyer up North earlier in the week and he showed me a perfect half Sovereign which was in 18K rather than the 22K gold of the genuine article. The weight was spot on and to the untrained eye it looked like the real deal, gold testing acid would also be fooled as 18K reacts like 22K but the x-ray gun doesn't lie. Under magnification you could see where the coin had been moulded rather than stamped but it was good enough to fool me. He has seen several like it in both half and full Sov size. I remarked that it was hardly worth doing but he pointed out that there is a £20-30 difference in value between one in 22K and 18K so make enough and pass them off and it is like printing money but obviously illegal. He identified it, bought it as 18K and melted it.

[Andyg]

British coins like sovereigns and Britannia's are free from VAT, GGT and inheritance tax (as its calculated on the face value of the coin). Therefore a £5Britannia (1oz) might be worth over £1k, however is treated the same as a £100 (for example) note by HMRC.

My understanding is that Foreign coins and bullion are not!

As for being an investment, your decision, however personally I would recommend a small holding in precious metals as part of a balanced portfolio especially as a long term investment.

[M3NTALIST]

Subscribed.

[miguelh34]

Bullion by post is a good place to buy in the uk. Coininvest.com is another great company to deal with based in Germany

[Neilw3030]

Good advice, thanks guys. I'm not looking for a lot, a slow start really.

[vortgern]

Good advice, thanks guys. I'm not looking for a lot, a slow start really.

Just buy a full sovereign every now and then

[M3NTALIST]

Or start collecting a series. At the moment the fourth of ten coins is due to be released, they're called the "queens beasts" and are available in different sizes and metals. The one ounce gold coin is £100 legal tender so exempt from taxes that sometimes punish us.
They are being released every six months and I'm hoping that the ten represents a better investment than the weight in gold, not sure if it will though.

[ellomoto]

British coins like sovereigns and Britannia's are free from VAT, GGT and inheritance tax (as its calculated on the face value of the coin). Therefore a £5Britannia (1oz) might be worth over £1k, however is treated the same as a £100 (for example) note by HMRC.

My understanding is that Foreign coins and bullion are not!

As for being an investment, your decision, however personally I would recommend a small holding in precious metals as part of a balanced portfolio especially as a long term investment.

Almost... ALL gold bullion and coins are VAT free.
British legal tender coins Sovereigns, Britannias and Royal Mint Proofs,(22CT normal coins 5p, 10p etc) are CGT free and considered at face value for IHT purposes. I am 99% sure that British Guineas are NOT CGT etc exempt as they are no longer legal tender.

Foreign coins and bullion of any origin are not CGT etc exempt.

I use https://www.bullionbypost.co.uk usually pretty much the cheapest and very reliable.

[subseastu]

I looked into this briefly a few years ago but unfortunately funds had to go somewhere else. One thing I notice is that the gold bars seem to be available slightly cheaper than the coins. I don't know the reason for this but is it worth just concentrating on 1oz bullion bars instead of coins?

[Saint-Just]

Are bullion bars legal tender?

[vulcangascompany]

Are bullion bars legal tender?

No

[KavKav]

Theres a big difference between coin collecting and being solely a gold investor - personally i love the sovs but I want the bullion at the cheapest price so avoid places which offer presentation boxes and fancy certificates. Atkinsons, bullion & coin dealers have very good prices and excellent customer service. You can either buy new or ‘secondhand’ there is only a few quid difference in price. Some of Edwardian and Victorian sovs are very attractive but i never pay more than a new price for them.

As with any investment aim to buy low sell high, easier said than done though! Theres been a little pull back under $1300 this week.

Agreed, Paul Atkinson is a great guy to deal with!

[Saint-Just]

No

Thank you. I thought so much and used my question as an answer to the previous post: collecting bullion bars instead of British coins mean you’ll have to pay CGT.

[draftsmann]

British coins like sovereigns and Britannia's are free from VAT, GGT and inheritance tax (as its calculated on the face value of the coin). Therefore a £5Britannia (1oz) might be worth over £1k, however is treated the same as a £100 (for example) note by HMRC.

Wrong, as far as inheritance tax is concerned.

[33JS]

I'd be more worried about your gold bullion ending up stolen.
Why bother holding it yourself. Its not going to be worth jack if society falls anyway. Never understood this aspect of gold trading. Its an investment opportunity like any other. I don't go asking for barrels of oil or bags of sugar in other markets.

Disagree. Gold is a very small, easily transportable and high value/weight with the 'romantic' side attached. Oil and sugar are a bit more specialist and not every Arthur Daley gets into them.

Plenty tales of dodgy 'vaults' holding vastly oversubscribed holdings that cannot meet all customers demands.

Again, check Baird and Co. See the difference in price between them:

http://www.goldline.co.uk/bullionCoi...nId=288&yp=342

and bullionbypost at:

https://www.bullionbypost.co.uk/gold...-queens-beast/

£16 on a single coin, Queen's Beast. Not a high percentage, but still 16 Quid!

[Brighty]

Wrong, as far as inheritance tax is concerned.

Thought that would be too good to be true, convert your millions into coins, leave them to the kids and only decalre 10% of their real value and avoid IHT

[mr noble]

Rather an apt e-mail just popped into my inbox.


Here's the link.

I agree with above, if you're getting into this for investment purposes and not as a collecting hobby or due to the impending zombie apocalypse, then you're far better off investing in a gold ETF (ETC) or directly into the mining companies, which will also pay you a dividend....something that gold coins do not do, and many other investments do.

http://www.hl.co.uk/news/articles/wh...WSI&Override=1

[draftsmann]

Thought that would be too good to be true, convert your millions into coins, leave them to the kids and only decalre 10% of their real value and avoid IHT

Chapter and verse is section 160, Inheritance Tax Act 1984, which applies the open market basis of valuation with no exceptions.

That said, there is scope for creative planning. Imagine if you will a box made from bullet/bomb proof glass. Into the box you put £1M. You then close the box. Immediately a time-lock is activated. The box now cannot be opened for, say, 100 years. The result is that you can now see your £1M but cannot enjoy access to it. What would you say is the market value of the glass box containing the locked-up £1M? More than £1M? Equal to £1M? Or less than £1M?

Now imagine instead of a glass box a suitably termed financial instrument...

Welcome to my world.

[Kingstepper]

That said, there is scope for creative planning. Imagine if you will a box made from bullet/bomb proof glass. Into the box you put £1M. You then close the box. Immediately a time-lock is activated. The box now cannot be opened for, say, 100 years. The result is that you can now see your £1M but cannot enjoy access to it. What would you say is the market value of the glass box containing the locked-up £1M? More than £1M? Equal to £1M? Or less than £1M?

Now imagine instead of a glass box a suitably termed financial instrument...

Welcome to my world.

Can't be worth more than £1M.

As a layman I'd guess the value is the sum today which would be worth £1M after 100 years compound interest?

[draftsmann]

Can't be worth more than £1M.

As a layman I'd guess the value is the sum today which would be worth £1M after 100 years compound interest?

Pretty much. A tame actuary will make certain assumptions and crunch some numbers. His counterpart in HMRC Capital Taxes will make the same assumptions and arrive at the same or a similar very discounted valuation. It is still subject to IHT but obviously based on the discounted figure.

[Andyg]

Wrong, as far as inheritance tax is concerned.

You sir are unfortunately correct - just asked my IFA. Which is a bit of a bummer.

Would this also apply to my watch collection.

[draftsmann]

You sir sir are unfortunately correct - just asked my IFA. Which is a bit of a bummer.

Would this also apply to my watch collection.

Unfortunately it’s one of my areas of expertise, as the astronaut, lion tamer and train driver courses were full so I became a tax adviser...

Same goes for your watches and other chattels, I’m afraid.

[Alansmithee]

I wonder if this guy was charging a handling fee?

[Andyg]

Unfortunately it’s one of my areas of expertise, as the astronaut, lion tamer and train driver courses were full so I became a tax adviser...

Same goes for your watches and other chattels, I’m afraid.

As suspected. Many thanks.

Being good at tax is much more useful than a lion tamer.

[Kingstepper]

British coins like sovereigns and Britannia's are free from VAT, GGT and inheritance tax (as its calculated on the face value of the coin). Therefore a £5Britannia (1oz) might be worth over £1k, however is treated the same as a £100 (for example) note by HMRC.

If this worked (IHT wise) something like penny blacks would be a good investment!