What are the most common questions about Gold Investment UK?

While some people are seasoned gold investors, gold investment UK is a whole new world for others. The past decade gold investment has evolved to become far more mainstream, but most investors remain novices. As such, we regularly help our customers answer questions they have about the market, buying process and how to sell.

One thing’s for sure, you shouldn’t be embarrassed or shy to ask these questions. You need to feel comfortable and understand any asset if you’re considering investing your hard-earned cash. As leading gold investment UK specialists we’ve heard all possible questions many times.

Got questions about gold investment? Download our FREE 7 step cheat sheet here

But what are the most common questions we receive?

Type of gold

Clearly, there’s a choice when you come to buy your gold. Questions range from whether you should buy bars or coins, 22 or 24-carat gold, or whether various year coins are worth investing in over others. It’s certainly worth doing your research independently as well as seeking advice from experts. Together you should be able to make the right choice. Gold should always be seen as a medium to long-term investment, so there’s no rush to buy. Make sure you’re happy with the type of bar or coin you wish to buy before taking the plunge. While we at Physical Gold focus on selecting the best type of gold for investment purposes, other gold merchants are simply shops and might try to persuade you to buy a type of gold which they have in stock and can’t shift.

The simple answer to these questions is that the best type of gold will vary from individual to individual, which is why our consultation process starts from the beginning and looks at your specific motivations and needs.

Insider's Guide to gold and silver

Is timing important with gold investment UK?

The golden question (if you’ll pardon the pun!), is what the prospects are for gold in 2014, and whether now is a good time to buy. Be wary of any gold dealer who guarantees returns. Noone has a crystal ball. As mentioned previously, the exact level you enter the market isn’t crucial as gold generally gains in value above the rate of inflation in the long term. However, a good dealer will certainly help you buy in a trough to pick up that extra bit of value and also help you select gold which offers value at that time of purchase. For example, it may be a bad time to buy Maple Leaf coins as there may be a shortage leading to inflated premiums, whereas other coins may provide a buying opportunity as they’re currently trading cheaper.

One shrew method of eradicating the timing issue is to drip-feed money into gold or split your investment into 2 or 3 tranches. Therefore you iron out some of the volatility and secure various prices, hedging your bets.

Are there tax-efficient ways of buying gold?

If an investment is the main purpose for buying gold, then it’s not only your buy and sell price which contributes to overall returns. Tax plays a crucial role also. Everyone wants to know the best ways to invest in gold. Seeking guidance from a reputable gold dealer will help select tax-efficient gold as gold investment UK has several tax advantages. Anyone who’s watched James Bond films may dream of owning huge gold bars. But selling them may incur 28% Capital Gains Tax. Others may not realise that 18-carat gold attracts VAT, whereas 22-carat coins and bars are exempt. Tax-free gold coins are usually a safe bet for cash investors, and Pension Gold is a great method of adding bullion to your retirement plan while avoiding VAT, CGT and receiving tax relief on your purchase.

How do I store gold?

Questions range simply from where to store gold, to the exact requirements and costs of each specific option. Certainly, if you’re seeking security and protection from your physical gold, then allocated and segregated storage is the only sure way to be safe. Ensure you receive the correct paperwork to prove your ownership. We’ve heard of horror stories of where gold bought and supposedly stored wasn’t available when clients wished to taken delivery of that gold. Other rumours suggest that unallocated gold accounts will crumble if too many investors wish to sell at the same time.

PHYS01_Animated_Gif_2_MPUBloomberg CME Precious metals conference

We try to cover all these questions during our consultation process and then discuss common queries in our regular blogs. Next Friday (23rd May) I will also be answering questions on a gold merchants panel hosted by Bloomberg for their exciting Precious Metals Forum. Register ASAP if you want a spot.


Store gold in your stomach to avoid paying tax? One man did!

Its not uncommon for people to go to extreme lengths to protect their wealth. We always harp on about protecting your hard earned assets with gold, but one over-zealous investor in India took it a step too far. Gold has always been part of the DNA of Indians, but one chap took this literally.

After complaining of severe stomach pains, the un-named 63-year old Indian citizen visited his local hospital to investigate the cause. Surgeons were stunned upon opening his stomach to find twelve 1oz gold bars.

Apparently the patient had told hospital staff hed accidentally swallowed a plastic bottle cap to hide the real source of his discomfort. His motivation to store gold in his stomach had been to smuggle the bars into India and avoid import duty.

Unfortunately for him, doctors handed over the twelve bars, each weighing 33g, to police. Subsequently theyve been forwarded onto customs who are conducting their own probe.

Follow our 7 step cheat sheet to esnure you invest in gold successfully. Download our FREE pdf here

Better places to store gold than your stomach?

While owning physical gold bars and coins negates any counterparty risk, it also presents the challenge of storing the metal. Its very important that wherever you choose to store your gold, you also insure it. With prospects for gold set fair for the remainder of 2014, all your prudent diversifying into gold could be undone if it is subsequently stolen and you dont have adequate insurance coverage.

There are a few options available to store gold. The easiest is to store the gold with the dealer from

PHYS01_Animated_Gif_2_MPUwhom you bought the coins or bars. Most should be able to provide specialist facilities not only to store the gold but do it in a safe way so the gold never gets damaged or tarnished. Any fee charged should also include insurance, covering the remote possibility of theft from the facility. Its important to ensure that your gold is legally ring-fenced from other gold owners, the gold dealer and even the storage company itself. This way your holding is protected regardless of the performance of any other third party. The key phrases you should look for are that the gold is Allocated (real gold bars and coins as opposed to an electronic fraction of a huge bar) and Segregated (ring-fenced).

If youre considering investing in gold and want to save money, you may wish to take delivery of your gold direct to your home. Youll need to call your house insurance providers to determine if theres an additional premium to pay to ensure your holding is covered under your current policy. Some people prefer to keep them in a home safe. However, I support the theory that this is the first place that burglars check when they break in. In this case, Ive heard of many buyers keeping their gold in obscure places around the house as they believe any burglar would never look there. Secret places vary from the bottom of a Frosties cereal packet, to hiding gold in a soup and then freezing it.

Falling in between these two storage methods is keeping gold in a bank or third party safe deposit box. These can be cheaper than a dealer storing for you but the facility isnt specialised in looking after precious metals which may compromise the gold. As gold ownership has grown over the past decade, weve also heard many stories of banks running out of safe deposit space.

But I also want to avoid duties and taxes

Youll be relieved to know that resorting to swallowing your gold to avoid duties isnt necessary.

There are enough reputable gold dealers based in the UK that theres no need to risk buying gold in some exotic country and smuggling it back to the UK. You shouldnt pay any more for gold in one place to another.

If you buy physical gold for investment purposes, then you should always stick to whats known as Investment Grade gold. This is gold of 22 carats or higher in the form of a bar or coin. This excludes gold jewellery, less pure forms of gold and gold ore or dust. The major advantage of investment grade gold is that it provides a VAT exemption in the UK.

When you come to sell your gold, it is possible that youll attract Capital Gains Tax (CGT) if youve made a profit. As a UK individual, youre currently permitted to make 11,000 capital gain in any one tax year without incurring CGT. This sounds great but the allowance is used up by all your asset sales in that year not just gains made from gold. So if you sell shares or a second property along with gold, its likely that youll breach this threshold.

Insider's Guide to gold and silver

There are two ways of legitimately avoiding this tax on your gold sales. You can either sell your gold strategically so that you only sell enough each tax year to fall within your threshold. Or you can simply stick to tax free gold coins such as Sovereigns or Britannia gold coins. As UK legal tender, these coins are CGT free.

So if you want to protect your gold from duty and theft, it may be easier to invest in UK Sovereign coins and store gold in a precious metals depository. Otherwise, you may develop quite a stomach ache!