Gold coins glitter after VAT ruling
Sunday 14 May 1995
In the 1970s it was quite common for private investors to buy a few gold coins to add to their portfolios, but even that was stamped on by authority. When exchange controls were lifted in 1979, VAT was charged on gold bullion bars, although not on coins. Fraudsters purchased gold coins, melted them, turned them into ingots and claimed back the VAT when they were sold.
In April 1982 VAT was imposed on coins too. Private investors could not reclaim the VAT and stopped buying.
Only antique coins worth much more than their gold content escaped. Now, thanks to an EU directive, private investors can again buy modern gold coins for a fraction above their gold content, and still escape the 17.5 per cent VAT.
Provided certain rules are observed, the directive allows dealers to sell any second-hand item worth less than £500 without collecting VAT on the retail price. If the item is made from precious metal, it has to be sold above its metal content's market value. Gold coins, including British sovereigns, Australian Nuggets, Canadian Maple Leafs and South African Krugerrands are in this category, provided they are not fresh from the mint nor have just been brought in from outside the EU.
Although the directive was not specifically implemented to cover bullion coins, Customs and Excise accepts that the legislation embraces such material.
Not all dealers operate the scheme, so check before you buy. Dealers also still pay tax on the difference between the cost of a coin and the price it fetches. Nigel Tooley, in charge of Spink's bullion department, says the spread between bid and offer price of bullion coins has not altered significantly.
However, gold coins are a much cheaper way of buying gold than gold chains and charms, which carry a big mark-up.
There is 0.2354 troy oz of gold in a sovereign, which means its bullion value last week was about £57.50. In bulk dealers would buy at £57 and sell at £59.
However, its retail price depends on the quantity purchased. For a small order, the retail price on Friday was £63 each. For larger orders of, say, 50 or more, the price falls to £60 each.
- 1 Sainsbury's '50p challenge' poster telling staff to encourage customers to spend more placed in shop window instead of staff room
- 2 Five-year-old Iris Grace is raising awareness of autism through her extraordinary paintings
- 3 HeForShe campaign: Iceland to follow up Emma Watson speech with UN women's rights conference – for men only
- 4 Car tax disc changes: Two days to go - and they affect you much more than just not displaying a piece of paper
- 5 Teenagers irritable because early school hours mess with their biological clocks
Five-year-old Iris Grace is raising awareness of autism through her extraordinary paintings
Car tax disc changes: Five facts you never knew about your (almost obsolete) tax disc
Isis an hour away from Baghdad - with no sign of Iraq army being able to make a successful counter-attack
Car tax disc changes: Two days to go - and they affect you much more than just not displaying a piece of paper
The Aral Sea: Nasa pictures show how what was once the fourth largest lake in the world has become almost completely dry
Isis, we are told, is a 'clear and dangerous threat to our way of life'. I’m sorry, but I just don’t buy it
Exclusive: 'Putin's Russia has been my biggest regret,' says Nato's outgoing Secretary General
The Osborne Ultimatum: Chancellor’s benefits freeze bombshell will affect ten million households
There’s no excuse for Dave Lee Travis’s behaviour, but we need to keep a sense of proportion
Should gay sex be illegal? 16% of Britons think so
Mark Reckless becomes second Tory MP to defect to Ukip in a month
- < Previous
- Next >
iJobs Money & Business
£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...
NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...
£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...
Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...