While some people are seasoned gold investors, gold investment in the UK can be a whole new world for many. In 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.
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 gold 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.
Is timing important with gold investment UK?
The golden question (if you’ll pardon the pun!), is what the prospects are for gold in 2022, and whether now is a good time to buy. Be wary of any gold dealer who guarantees returns. No-one has a crystal ball. As mentioned previously, the exact level at which 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 shrewd 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 in the 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 and 24-carat coins and bars are exempt. UK 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.
How do I buy Gold?
Start off be contemplating what you’re trying to achieve from your investment. Is your primary motivation to maximise returns, or is it to buy small pieces of gold to pass onto grand children one day.
Your investment time-frame and appetite for risk may also help determine whether to go for older numismatic coins or simple bullion coins or bars.
We provide guidance as to which choices will best suit your needs. And for those who feel they want a mixed and balanced tax free portfolio, we offer a service to create a portfolio for you.
More than a decade on from observing a gradual move towards gold as a savings vehicle, we’re seeing the theme become more mainstream.
Interest rates have remained at record lows, meaning bank savings for UK savers yields near to zero.
With supply chains deeply impacted by Covid and Brexit, supply-push inflation is increasing rapidly. Combined with the catalyst of global Quantitative Easing, inflation is mounting a charge upwards.
In reality, this means that leaving money in the bank in 2021 and 2022, returns far less in interest than the current inflation rate.
Add in the very real fear of a global banking crash, and many more people are looking to diversify their savings into precious metals, in order to protect the buying power of their money. We expect to see this theme continue as the world suffers the economic consequences of the pandemic.
Bank savers switching to gold
London, October 14 – Physical Gold Limited, a gold bullion dealer based in the City of London, today reported a massive rise in the number of investors switching out of bank deposits and into solid gold.
With UK interest rates at an all time low, returns on deposit accounts and cash savings are significantly below the rates achieved in the past. In fact many bank savers report interest rates below 1%, even before savings tax is applied.
Traditionally a safe haven to park cash during economic or political turmoil, deposit accounts are now deemed to offer less preservation and protection to savers’ money. The credit crunch has seen banks widening the gap between where they are willing to lend money and pay bank savers. For the latter group, this has meant record low returns.
These poor returns are further threatened by the looming possibility of high inflation. With the framework of record low interest rates, relentless public spending, and the unprecedented move by the Bank of England to print £175bn of new money with Quantitative Easing, the eventual emergence from recession could see the onset of inflation. This would further erode the value of savings, whereby people could see their money able to buy less and less as time goes on.
In an interview today, Dan Fisher, CEO of Physical Gold Limited said:
“There is a growing concern about a currency crash, both in Dollars and Sterling. Gold has protected against the scourge of inflation throughout history and has proved to be the ultimate safe haven asset.”
A new, but very real risk associated with bank savings is that of Counterparty Risk. With many of the High Street banks everyone has grown up with now being bailed out by the UK Government, and examples of overstretching such as Northern Rock, it now means savers have to worry if their money is safe at all. With only £50,000 protected in the UK, any money above this is exposed to the underlying bank’s Counterparty Risk.
Switching money into physical gold coins and bars eradicates any such exposure altogether. The precious metal is independent of any corporate or Government policy, and by its very nature as a physical asset, its value cannot fall to zero. In fact the underlying $ gold price has soared over 200% in the past 5 years alone.
Unlike with bank savings, investment into certain gold coins is totally free from tax, so any gains made on the investment can be kept rather than shared with The Treasury.
Physical Gold Limited has seen many everyday people switching some of their savings into gold and reaping the benefits of the comfort and returns it can provide. Many savers are even contributing regularly as a savings scheme, to gradually build up a golden nest egg.
One of the most common questions I hear is from keen investors wanting to know the best gold coins to buy as an investment.
The most important thing people seem to overlook is the ease in which you’ll be able to sell the coins. It sounds obvious, but so many buyers focus purely on trying to get as much gold for their money when they invest that they forget to consider the liquidity of the gold.
Liquidity makes the best gold coins
Remember that your profit is only realised on physical gold when you actually sell the coins at a profit. So when buying coins your primary focus must be on choosing well-known coins in desirable condition. So please don’t be tempted by an obscure coin just because its £10 cheaper than its globally renowned alternative. With this in mind, any of the well-known bullion coins are a safe bet. These could be Sovereigns, Britannias, Krugerrands, Eagles, etc. You can find a comprehensive list with thorough descriptions at Bullion coins.
A novice should never try to be too smart by delving into the world of numismatic or historical coins. These generally present high potential profit, but also large losses for those without market experience. Proof coins should generally be avoided by the gold investor as you won’t necessarily get the full premium back that they command.
For very modest investors it can be fun to select a variety of bullion coins for your portfolio, perhaps choosing some Sovereign coins with an interesting background or coins with beautiful designs.
This is a series of 11 one ounce 24 carat gold coins (also produced in silver and fractional versions), which are limited in issuance. In contrast to the Britannia or Sovereign bullion coins which are unlimited and mass produced, the Queen’s Beasts coins have been released coin by coin, every 6 months. Once a particular version is all sold, they’re not produced any more.
This relative scarcity, combined with a degree of collectability, has pushed up premiums on these coins far quicker than standard bullion coins.
While the first 8 coins in the series already command high prices, the most recent 2-3 coins are still being produced, albeit not for long. Therefore, premiums on the most recent releases are still only slightly higher than the standard Britannia. While there’s no guarantee that their prices will mirror the earlier coins in the series, there’s a good chance.
However, for those UK investors considering a more sizeable investment you must consider factors such as tax. Capital Gains tax was recently increased for higher rate tax payers in the UK to 28%. That means that if you sell your gold coins at a profit exceeding your annual limit (currently around £12k) then you’ll pay away almost a third of that excess to the taxman. Any other assets you sell in that year will use up that £12k limit too. So if you sell shares or an investment property and make a profit, you’ll no doubt be paying CGT on all your gold profit!
The great news is that with some careful planning and help from a reputable gold dealer, you can source tax free gold coins. Britannia, Sovereign and Queen’s Beasts coins are all free from Capital gains Tax for UK residents due to their status as legal tender. Quite simply the taxman cannot tax the movement of legal currency. For this reason, together with the fact that these two coins are amongst the world’s best known, most UK investors are best off investing into these tax free gold coins.
The most important rule with gold coin investing is that everyone’s situation, needs and motivations for buying differ, and so the best gold coins to buy may also vary. This is where the real value of a knowledgeable gold dealer pays dividends!
While ETFs have provided an accessible way for investors to gain exposure to the gold market there are many fears circulating about their security and integrity. For starters, the fact it is a structured paper asset that not everyone fully understands tends to defeat the object of owning a simple tangible asset like gold. So many investors have been stung over the past 5 years investing into asset-backed securities that were rated AAA by the credit rating agencies, only to see them downgraded to junk status overnight when everyone realised that the subprime mortgages they were linked to would not payout. It transpired that many very sophisticated investors never really knew which assets the bond was linked to or understood their lack of protection against such defaults. So are you more comfortable understanding the risks of holding gold coins or gold funds or ETFs?
Press reports are speculating that only 10% of the traded ETF value is backed by actual gold. With a distinct lack of auditing, its difficult to know for sure what the exact figure is.
Jefferey Christian of the CPM Group confirmed that gold is leveraged around 100:1 at a Commodities Futures Trade Commission (CFTC) Hearing on March 26, 2010. This means that there are around 100 claims for each ounce of gold in existence and so not enough gold to be delivered to everyone who has been promised paper gold.
So the question remains would you be able to access the value of your ETF if half or more of the investors decided to withdraw at the same time?
The term counterparty risk has become far more used and relevant over the past few
years. This term didn’t seem relevant to bank deposits a decade ago it went without saying that leaving savings in a high street bank was safe. But things have changed dramatically. Now we’ve seen our major high street banks on the brink of collapse. Who would have believed me 15 years ago if I’d have predicted that RBS, Nat West and Lloyds would be mostly Government owned?
The 2008 credit crunch saw bankruptcies to seriously major corporations from General Motors to Lehman Brothers. I saw many friends who had built up shares in Lehmans over many years of work and anticipated those stocks providing their retirement. No-one could have predicted that they would lose value so quickly and Lehman would go under.
We then saw the next phase of counterparty risk with Sovereign debt. Investors who thought they were taking on very little risk by investing in Government bonds faced the very real prospect of not being paid out in full. Countries such as Ireland, Greece, Portugal and Spain need help from the EU and IMF to repay their debts. There is every chance that bondholders will not receive all the capital back.
And now, in the new Covid world, Government debt is at record highs and corporations are struggling to adapt and survive under the new world parameters.
With physical gold, there is NO counterparty risk. It doesn’t matter if a Government fails to repay bonds, a corporation goes bankrupt or even if the gold dealer you bought the gold from ceases trading. You will always have the physical asset to do with as you like.
By investing in gold mining stock, ETF or Gold funds each poses some sort of counterparty exposure and a threat to the value of your asset. Remember paper gold is a promise to pay, not the real thing!
3. Risk Profile
If you’re considering a choice between mining stocks and physical gold, its crucial to realise that these are different asset classes with entirely different risk profiles. Firstly, investing in mining stocks means your investment is linked to the performance of one company. As a paper asset, if that company underperforms, or even worse goes bankrupt, there is a chance that your investment becomes worthless. The value of gold coins and bars can never fall to zero or anywhere near because of the intrinsic gold content. During times of global economic turmoil mining stocks and bullion perform quite differently. Terror threats, currency depreciations, huge unemployment, record deficits and banking crises don’t provide conducive conditions for equity markets, which is why we’ve seen more and more people fleeing to the safety of gold bars and coins. Generally, while mining stocks have the potential for impressive returns they tend not to outperform physical gold during times of crisis such as the recent credit crunch. During sharp market declines such as the 1987 stock market crash, mining stocks become correlated to the broad equity markets rather than the price of bullion.
4. Comprehensive Insurance
If the reason you want to invest in gold is for portfolio insurance then make sure you have a Comprehensive policy! Everyone knows that gold provides security against economic and political unrest, making it the perfect safe haven asset in the current world in which we live. In that case, you want this wealth protection to be thorough. By investing in paper gold its like buying an insurance policy with get-out clauses. In other words, it doesn’t provide full coverage. There are still risks attached such as counterparty risk. By investing into physical gold, its like having the most comprehensive insurance available, putting your mind at rest that no matter what the next financial headline is, your physical gold holding will provide the necessary balance.
5. Tax Efficiency
In the UK, there is the opportunity to own physical gold coins which are completely tax-free. All investment grade gold is VAT exempt. You pay no income tax while holding the gold and UK coins such as the Britannia and Sovereign are Capital Gains Tax-free due to their status as legal tender. Compare this to paper gold such as a mining stock or gold funds where you’ll have to pay income tax on any dividends and capital gains tax if you sell the shares at a profit. With CGT now up to 28% for higher rate taxpayers, that’s nearly a third of your profits!
Accessibility in times of crisis is crucial. After all, gold should act as your crisis hedge. Over the past month, we’ve read about the attempted ink-cartridge bombers and MI5 revealing renewed threats to the UK, France and Germany. The Eiffel Tower has been evacuated twice in recent months. If one of these attempts gets through and the financial system collapses for a week or so how easy is it to access funds through your gold ETF, mining shares or Gold funds? By holding the physical metal itself, especially in the form of globally recognised coins, you hold the ultimate liquidity.
Because we only sell the most liquid types of gold and silver coins and bars, were able to offer all our clients a Buyback Guarantee. We promise to repurchase any metals sold by us, regardless of how much time has lapsed since purchase. This provides you with the knowledge and comfort that if you need to quickly sell any, or all, of your holdings, then well facilitate that for you.
In fact, we go a step further, as we believe our role in buying back is as important as our guidance when selling. We give you a sell it now market rate for all your gold or silver if you need to sell immediately. Alternatively, if you’re able to wait, we make a note of your intention to sell and try, as brokers, to match with buyers over the coming weeks. If there’s a solution that works, then you’ll obtain an enhanced price, as were essentially cutting out the wholesale element.
you own something real, with a tangible value. But often, selling that physical asset can be more challenging than offloading its paper or electronic counterpart. Fine wine, art and property are such examples. They may be appealing investments, but you only realise your profit if and when you’re able to sell that asset.
For this reason, it’s important to have an exit strategy in place even before you buy the asset. How many times have you heard of someone holding out for a price on their property, only to be told its only worth what someone will pay.
The best starting point is to ensure the asset you buy is as liquid as possible. For example, if you buy an investment property, ensure you don’t narrow your possible future buyers, by purchasing an obscure property like a converted lighthouse. The reason 2 bed flats are such popular investments, is because they’re easy to sell, thus achieving the best possible price.
Gold investment and propertyare comparable in this way. Its crucial to buy gold or silver which is world renowned and desirable. At Physical Gold, we only sell very liquid gold and silver, providing the backbone of our buyback guarantee. We don’t offer obscure collectors pieces, as we believe liquidity plays a key role in maximising returns.
What selling options do I have?
If you purchased well-known, liquid coins, then you have various selling options. Certainly if they’re pre-owned coins they’ll possess an additional value over and above their gold content reflecting their additional history, relative rarity and desirability. If you’re able to sell these coins off piece meal, to private individuals, you’ll obtain the best possible price, as you may be able to find investors and collectors willing to pay higher premiums for certain coins.
At the opposite end of the spectrum, there’s the convenience of a local jeweller. The compromise is that the jeweller is likely to melt the metal down for jewellery and pay you below market rate.
If you’re new to investing in gold and silver, then a typical concern is ensuring the gold or silver you buy is authentic and of a high grade. The motivation for most gold investors is to reduce their overall risk, so the last thing they want is to risk buying bogus coins or bars. Certainly, for the novice, the safest bet is to buy from a reputable dealer.
Research is crucial to ensure the credibility and integrity of the dealer (and as such, the metals they provide). At Physical Gold we operate a very tight process to ensure sub-standard or counterfeit metals don’t enter our system.
Gold and silver sourcing and numismatic checks
We source our metals direct from manufacturers or mints, or from authorised dealers, ensuring their provenance is known. Gold or silver purchased from the public is tested and verified by our numismatic team and rejected if it doesn’t meet our strict standards.
Accreditations / track record
We are proud members of the British Numismatic Association (BNTA), which means we adhere to a strict code of ethics and guidelines on all our metals. Membership requires prior vetting and approval by existing members, to verify a dealer’s integrity. Regular stolen and fake goods alerts are circulated within the BNTA so that we’re aware of any forgeries on the market. Look out for the BNTA logo to ensure your dealer is accredited and has signed up to such code of ethics. We’re also members of the British Numismatic Society, an organisation made up of coin professionals, established as far back as 1903.
Certificate of authenticity
We can provide a Certificate of Authenticity upon request with a purchase you make through us, guaranteeing its authenticity and that your purchase has been checked and meets our standards.
It’s not what you do, it’s the way that you do it! It’s possible to gain exposure to gold and silver in many ways, but the outcome may be completely different from one to another. The most common ways to get involved with gold investment are;
By purchasing physical bullion, buying shares in an exchange traded fund (Gold ETF), a traditional fund or mining company, or riskier option such as spread betting, futures or contracts for difference (CFD).
Gold ETF, fund or Physical Gold. Which option is best for me?
Each option of exposure to precious metals has its merits. The right choice will depend on your individual objectives. For example, if you have a high appetite for risk, then you may fancy your luck investing in a mining company. Alternatively, if you’re looking to actively trade the market, then electronic options such as ETFs will be the most efficient way to achieve the short-term speculation.
However, the most powerful benefit offered by gold and silver, is balance and protection. As well as professional traders, regular, everyday people buy gold and silver to REDUCE their overall risk.
Electronic and paper options provide investors with exposure to the market, but they also present additional risks. This undermines the value of gold & silver as a crisis hedge, or as portfolio insurance in the first place. Investment experience should also play a role in deciding which type of gold investment to opt for. Certainly derivatives should be left well alone by most people as they’re far more suitable for experienced investors. If the market moves against you, the amount you lose isn’t just limited to your original investment due to leverage.
Similarly, if you’re tempted to invest into a gold mining company, far more research is required. Not only do you need to understand the gold market itself, but also you’ll need to examine into the underlying mining company, it’s structure and the ability of its management. Selecting a gold fund reduces the risk of depending on one company’s performance. However, you’re still investing into mining companies rather than gold itself. At the end of the day, you only actually own a piece of paper. Your exposure is not only to the underlying compaies within the fund, but also to the manager’s of the fund itself.
A Gold ETF can be a better way of gaining exposure to gold itself, but it too represents certain risks. The fund may be leveraged, so that the amound invested into the ETF isn’t necessarily backed up by the euqivalent amount in gold bullion. This means that if sufficient holders of the gold ETF wished to sell their holding simultaneously, there possibly won’t be enough physical gold to satisfy all those sales.
Costs and tax efficiency
Undoubtedly, if your buying cost is your main focus, then ETFs and funds are the cheapest ways to buy gold or gold related companies. The cost of manufacturing gold coins and bars is more expensive than simply buying something electronically. However there are other costs to consider. Funds generally have ongoing management fees to pay. Physical Gold needs to be stored which costs money, although an increasing number of investors are taking personal possession of their coins and bars to storage cheaply at home.
A major factor commonly overlooked is tax efficiency. Investment grade gold is VAT-exempt and certain coins are Capital Gains Tax (CGT) free making ownership fully tax efficient. For the few percent extra you pay when buying, you may well be saving up to 28% later when you sell at a profit.
CGT more important 2022 and beyond
In 2022 and beyond, CGT is a prime target for the UK Government to raise taxes in an attempt to reduce some of their furlough-induced debt. The two areas that have been discussed for amendment are;
The current CGT tax free allowance of £12,300 could be reduced. Calculations predict that reducing this threshold to £5k, would double the Treasury’s income from CGT. Abolishing the allowance entirely would triple tax receipts
Increasing the rate that CGT is charged at to match an investors income tax level (up to 40-45% for some!)
Clearly, once you’ve invested in gold, any changes to CGT are out of your control. Therefore, physical gold and silver coins are by far the safest way of providing long-term stability and remain tax efficient.
It’s also the most suitable way of passing wealth down the generations. Trust me, kids prefer to receive something tangible with real value than a piece of paper promising worth. They present the most secure method of protecting your family’s wealth in a tax efficient way.
Genuine gold coins can be a fantastic investment, a treasured heirloom to hand down through the family or an opportunity to protect your wealth for the future. Many people have already heard about these advantages, and more besides, but how do you take the next step to own gold? It’s unlikely that you have a ‘gold coin shop’ at the bottom of your road and, as we’ll discuss below, even if you did it might not be a good idea to buy from there! So, how exactly do you buy gold coins?
The advantages of gold coins
Gold is, first and foremost, a great way to protect your wealth. It’s not linked to stock market prices and so, in times of recession and market crashes, gold will often hold its value & provide a safe haven. This is because Gold is universally recognised as having an intrinsic value, so there’ll always be demand for it, which isn’t always the case with Company stocks and shares.
Coins, in particular, are considered to be a very liquid asset because they’re
smaller, they’re easily divisible. This means that if you required a relatively small amount of cash, you could easily sell a small portion of your holding.
In this way, the appeal of gold coins is enhanced by the fact that some dealers will even offer a buy-back guarantee for these coins due to their liquidity, typically at a higher price for their weight than bars.
As well as the opportunities for selling your coins in the future, there are also immediate purchase advantages. Coins are often available at a lower premium and are extremely tax efficient. This is because UK gold coins are technically legal tender within the UK, so there’s no VAT to pay and no Capital Gains Tax at the point of sale.
The different types of coin
There are many different types of gold coins on the market, but one of the most common UK coins, which benefits from the tax advantages mentioned, is the British Britannia. Like other well recognised gold bullion coins, it’s one ounce in weight and is a sound investment choice, whether you’re just starting or an experienced investor.
You can see a more comprehensive list of your bullion coin options here, including the South African Krugerrand, which is another common option for investors who want to diversify and move away from solely investing in UK coins.
It’s sensible to buy coins that can be sold easily
A vibrant secondary market is an absolute must when it comes to purchasing coins. This is simply because you will want to sell them at some point in time in order to realise your investment, along with a tidy profit. But, far too many investors buy obscure gold coins because they think it’s rare and has a numismatic value. When they try to sell it, they can’t find a buyer. So, it’s imperative to invest in coins that can add liquidity to your portfolio.
Royal Mint gold coins
These could be well-known gold coins like the Britannia or the Sovereign. Both these coins enjoy a reputation that stretches far and wide across the world and can be sold quickly at any place, any time. It’s also important to note that these coins are easily available and can be purchased in large quantities with bulk discounts. The Britannia, for example, does not command a rarity value as its editions are all fairly recent and do not go back centuries. They are mass-produced and are easily available with low premiums.
Buy gold coins for collection purposes
Investing in old, collectable gold coins (also known as numismatic coins) is a popular hobby for many, and collectors can make decent profits at any point, should they decide to liquidise their collection.
However, numismatics (rare, gold-bullion coins which are not quite at the point of being formal collectables) is a professional discipline of study, and for the casual or even professional gold investor, it’s normally recommended that you stay with modern gold coins.
If you do have a specific interest in numismatic or semi-numismatic coins, however, it is possible to purchase these via the same routes as those described below.
Is it possible to combine a passion for collecting with profits?
Several investors develop a passion for collecting over time. If you are developing a collection, it doesn’t necessarily mean that you should forego profits altogether. There are several collectable sets of coins available in the market that are attractive to investors as well, as collectors. A case in point would be the Queens Beast series of coins, which are released by the Royal Mint.
The set features the legendary Queens Beasts and two new releases are introduced into the market every year. The challenge of collecting the entire set lures several collectors. At the same time, these coins are an excellent investment, as values can go up by as much as 40% in one year. Therefore, they tick both boxes for the buyer – collectability and good profits.
How to buy gold coins in the UK
Once you’ve reviewed the information about gold coins and decided on your approximate purchase requirements, you have several options for the actual purchase itself. The main routes to buy gold coins in the UK are:
a registered and approved gold dealer
an online private seller (using a marketplace such as eBay)
an online portal seller
Each of these options can have their own strengths and weaknesses.
Registered and approved gold dealer
An approved gold dealer will typically be able to provide you with the best price, the best quality and the best choice of gold coins, due to their position at the heart of the gold marketplace and their associated buying power.
They offer added security with regard to quality, flexibility in the quantity you wish to buy and expertise when it comes to guiding you on which type of coin to purchase. Gold can be purchased for many reasons and a reputable gold dealer will be able to guide you on which type of gold coin will best meet your objectives. They should also have added services such as insured storage of your gold coins – should you prefer not to store them yourself. A reputable dealer should be BNTA accredited. The BNTA oversee the coin trade within the UK and dealers must meet certain criteria before they are awarded accreditation.
It’s important to discuss your investment objectives with your dealer at your first meeting or call. Once you can secure a place on the dealer’s mailing list, you will get to know about the best deals in advance. If a specific coin that you’re interested in becomes available, you’ll be the first to know. A clever way to purchase gold coins at lower prices is to wait until the market becomes quieter. Needless to say, there could be excessive demand in a busy market and prices would stay up.
Some jewellers will often hold small quantities of gold coins, sometimes with the intention of selling, as they would a ring or necklace.
The coins held at professional & reputable jewellers are likely to be genuine but may not be of the trading quality sold by a gold dealer. They’re also likely to hold a limited quantity and may possibly charge a larger margin, due to the likely intention that the gold is a gift, rather than an investment. Not a bad option if you want to buy gold coins in small quantities.
Gold collectors, and owners, can sometimes turn to marketplaces such as eBay to sell their gold to the mass market.
Whilst it can be tempting to sniff out a bargain on sites such as this, purchases from private sellers come with risks such as being fake, or low-to-middling quality and there is a lack of purchase guidance that you would receive from a reputable dealer.
Some bulk sellers now offer automated online portals for gold purchases. This can be an attractive proposition for smaller purchases of perhaps one or two coins.
For larger purchases, however, these portals are usually unable to offer personalised guidance on your chosen gold, which can make all the difference to your returns and the value of your gold holding at a later point.
How to structure your gold coin purchase
Once purchased, you may decide that you wish to keep your coins at your home. If this is this case, we would recommend installing a security solution such as a safe. Alternatively, if purchased from a reputable gold dealer they will probably be able to offer you a secure storage solution.
There are also other options for your gold purchase, which may align with your wider investment objectives. A regular savings plan might be attractive – reducing your initial outlay and helping you save in smaller, manageable contributions to your overall gold coin holding. A gold dealer can discuss the options with you and help decide on the most suitable route forward.
The ‘secret’ to buy gold coins successfully is simply to understand why you are buying gold and to make a purchase based on your long-term aims.
The reasons for someone in their 50s purchasing a single gold coin to pass to their grandchildren, for example, will be very different from the reasons behind a 30-year-old purchasing to hedge their existing investments.
In each of the above scenarios, experts are there to help ensure your purchase is exactly right for you – furthering your overall aims and benefiting you and your circumstances.
Making tax-efficient investments
Tax efficiency is a key consideration for any investor. UK investors are fortunate to have VAT and CGT savings on UK gold coins. There are VAT exemptions on all investment-grade gold, which includes coins and bars (such as 1oz, 100g and 1 kilo). However, gold coins that are legal tender in the UK are also capital gains tax-free. This means any profits that you make from the sale of your investments in the UK gold Britannia or Sovereign will not be subject to capital gains tax. But, if you were to invest in a non-UK gold coin like the Krugerrand, the profits from its sale can be taxed.
Call Physical Gold for the best advice on buying gold coins
Physical Gold is one of the most reputed online dealers of precious metals such as gold and silver (bars and coins) in the UK. We have investment advisors who can guide you on the best gold coins you can buy. Our team makes recommendations and imparts advice after discussing your investment objectives. Give us a call today on (020) 7060 9992 or contact us through our website. We can help you build a robust portfolio by investing in the right gold coins.
Historically gold ownership has been associated with super wealthy sheikhs and the elite. However, the financial landscape has shifted to such a degree that it is now crucial for the average man in the street to consider the best ways to invest in gold.
Gold mining shares
While gold investment may be a new concept to many, share ownership is far more commonplace. So a good place to start may be gold mining shares. Just like other stocks, the price of these companies can go down as well as up and the shareholders will receive dividends if the company does well. A word of caution though is that your risk exposure is to one company only rather than to the gold price. This means that all your eggs are in one basket, so if that particular company has poor management or they struggle to discover new gold reserves, it can struggle or even go bust.
High risk gold mining shares
The possible rewards to the investor are high, but unfortunately so are the possible risks of total loss. The recent gold price adjustment meant that many miners were operating at a loss until the price recovered, leaving many precariously close to closure.
Gold funds such as the Blackrock Gold & General provide the advantage of spreading exposure amongst a basket of gold mining companies, reducing overall risk. However, as an investor, the value of the fund still doesn’t directly track the gold price. You have to pay management fees for the running of the fund and you only ever really own a piece of paper, meaning your investment is at risk from poor management and the underlying companies going bust.
A more direct relationship with the gold price would be with
an Exchange Traded Fund (ETF). This tracks gold far more closely and can be suited to those looking to trade in and out of gold and play the market, as charges and margins are low. However, these gold investments have an Achilles heel. Just like with shares and funds, the investor only owns the asset electronically or on paper. There has been much speculation recently that ETFs and ETCs only hold a fraction of actual physical gold compared to the amount of outstanding investment in their funds.
This means that if many investors chose to sell at the same time, there wouldn’t be the amount of gold behind the scenes to cope with the sell off and the whole structure would collapse – leaving many penniless. These concerns have manifested recently into a dual market – Electronic gold funds and physical gold – with a majority of investors wishing to move over to owning real gold bars and coins.
The only way to invest in gold with total peace of mind is to buy gold coins and bars. These can be delivered directly to your door from reputable gold dealers so that you get direct access to your gold. This means that investors are immune to any companies going bust, poor fund managers, or even Governments collapsing!
Production cost of gold coins and bars
Margins are higher when buying physical gold as there is a cost associated with refining, producing and distributing gold bullion. Therefore it is far better suited to those seeking medium to long term security rather than active traders.
However, there are now a number of innovative physical gold products which further enhance the case for investing into solid gold. All investment grade gold is VAT exempt in the UK. Certain British coins have the added advantage of also being Capital Gains Tax free. Gold bullion now even qualifies for your pension with SIPP Gold, providing the chance to buy gold bars at up to 50% discount through tax relief. Finally, a very accessible way to invest in gold is through Gold Savings. This offers the chance to set up a monthly savings scheme whereby investors gradually build a holding in gold coins rather than save with a traditional bank.
Buying gold coins
Gold coins can be a great addition to the portfolio of any investor as they provide divisibility. But, one should know more about coins, before investing. There are three categories of gold coins. New releases are coins released by mints across the world. These are purchased by collectors and investors alike. They carry low premiums and are easily available. However, one should bear in mind that some premiums may be charged by well-known mints like the Royal Mint for packaging and presentation when these coins are purchased.
The second category is collectable coins. These coins can be rare and old. Many are limited edition releases and enjoy huge interest from numismatists around the world. Due to their rarity and demand, collectable coins attract large premiums and they are unaffordable for smaller investors.
Lastly, there are bullion coins. These are affordable, easily available and can be purchased in bulk with large discounts. It’s also important to focus on buying coins of different sizes, weights and dimensions as this adds flexibility and divisibility to the investment portfolio.
Gold bars are popular as well
Of course, gold bars are also a popular investment vehicle and attractive to several investors. However, one needs to bear in mind that buying a large bar implies that you can only sell it once. This is where divisibility becomes a key consideration, which we have discussed earlier. Owning smaller pieces of gold allows you to sell them off in smaller quantities when the market price is right. One can take advantage of the different price points in the market by continuously selling small quantities. But, gold bars do not support divisibility, as they are good for a single sale at one given price.
The good news is that bars are increasingly becoming available in smaller sizes. So, putting some of your investment in these can create balance for your portfolio. Another reason to invest in gold bars is lower production costs. Coins have a more intricate design element to them and higher production costs due to detailing, polishing, designing and other costs of manufacture. Gold bars are usually rectangular and simply have a purity number, serial number and refinery mark.
Always check the purity when buying a gold bar
As discussed, a gold bar will have these critical pieces of information engraved on its face. When making a purchase, it is of paramount importance that one checks these numbers. Most gold bars are produced with a purity of 99.9% and the bar will convey this information as 999.9. Never buy a bar that does not have a serial number or refinery stamp, as there is no guarantee that the gold contained within the bar is pure. Gold bars should ideally be purchased from a specialist gold dealer and one should compile a list of reputed gold dealers in the country before making a purchase.
Our specialist team of gold experts would be happy to hear from you
Physical Gold has a team of gold experts who can assist you in every step of the way when you buy gold. They can help determine the purity and advise you on what to buy and when. The advice they impart is backed by years of experience and solid research. Call our team today on (020) 7060 9992 or get in touch with us online.
With tensions in Syria reaching boiling point, a few years ago, it hasn’t gone unnoticed that the price of gold had steadily risen at the time as the world prepared for conflict. Since then, a plethora of myriad challenges has hit the world economy. It has now been a long 12 years since the days of 2008 when the world faced its most severe financial crisis.
The US sub-prime housing market collapse triggered off a chain of events that eventually brought global financial institutions down to their knees. The period witnessed the demise of Lehman Bros and a large number of global financial institutions followed suit. But, economists all over the world had hoped that in time, the crisis would dissipate, and the world economy would be buoyant once more.
Ongoing crisis fuels gold price
This was not to be. Instead of a healthy recovery, the global financial markets simply settled into a bearish and sluggish phase that lasted for most of the decade. A change of guard at the helm of the great nations could not provide a viable solution to the problem. On the other hand, geopolitical events around the world continue to queer the pitch for a recovery.
The uncertainty surrounding Brexit and government debt across Europe created a problem. Of course, there was a renewed escalation of conflict in the Middle East, along with the increasing threat of global terrorism that led to greater levels of economic uncertainty. This was further compounded by other factors like the US-China trade war.
At the height of the recession, gold reached its highest ever peak in August 2011, when the spot price of 1 ounce of gold touched $ 1900. This rise was attributed to wary investors moving away from market-linked instruments and hedging their risks by investing in gold. Now, in 2020, we can once again see the spot price rising all the way up and it has already reached above the $1600 mark. Investors are once again depending on the safety of gold.
The reliable safe-haven investment is now technically in a bull run again after gaining more than 20% from its June lows. Tracking the tax-free gold price is essential if you’re to time your entry into the market well and maximise returns.
When is gold tax-free?
Tax regimes can vary dramatically around the world, so we’ll just focus on the tax treatment of gold in the UK. All investment grade gold is VAT exempt, meaning you’ll pay no tax when you buy. To qualify as investment grade, the gold needs to be 22 carats or higher in purity and in the form of a bar or coin. So this instantly discounts the merits of lower grade jewellery, or gold in the form of dust as tax-free gold.
Owning physical gold bars and coins doesn’t produce any dividends like a gold mining share might, so a holder also avoids paying any tax while holding them.
The final piece in the jigsaw is whether any tax will be applicable upon sale – known as Capital Gains Tax (CGT). Generally speaking, any profits you’ve made are liable for CGT once you’ve breached your annual allowance. So, if you sell gold bars or foreign coins such as Krugerrands, you may have to pay CGT.
However, the amazing loophole lies with British coins. Namely UK Britannia and Sovereign gold coins are actually legal tender in the UK. As such, the Treasury can’t tax you on their movement, essentially rendering them CGT free! So if you want to avoid paying tax when buying, holding and selling gold – Sovereign coins are a great place to start.
What influences the tax-free gold price?
There are several variables which contribute to the price of Britannia and Sovereign coins. Firstly, the age and condition of the coins. Generally, brand new coins will trade at a 1-2% premium to circulated coins. In my opinion, older coins offer better value as you’re unlikely to receive the same premium you paid when you come to sell brand new coins.
Secondly, the number of coins you’re looking to purchase will impact the price you pay. Generally speaking, you should benefit from economies of scale with the premium you pay shrinking as you buy more.
Physical gold price affected by supply and demand
The fact that the UK gold coins are real and tangible, rather than simply paper gold like ETFs or mining shares, means that supply and demand will also influence the gold price. If the market experiences high demand and/or restricted supply, then you may find yourself paying higher premiums for the same coins.
Finally, the place from which you source your gold coins will have an impact on price. Buy direct from the Royal Mint and you’ll pay over the odds due to packaging and presentation. However, purchasing from a reputable gold dealer should keep premiums to a minimum.
Where can I track current gold prices?
If you don’t want to have to call a gold dealer every 5 minutes to gauge prices, it’s useful to be able to trace the approximate price on the internet. There is a relatively easy way to do this. Reputed gold dealers will display the current price of gold on their websites.
As you may be aware, the price of gold is a dynamically moving number and is usually reflected on a ticker, which is displayed at the top of the website. The display gets automatically updated every minute. By checking the ticker, you can stay up-to-date with the current price of gold. Also, in today’s day and age, there is an app for just about anything. Several gold apps in the market can also track the price of gold in real-time and keep you updated.
If you’ve already bought gold coins, you may simply want to track their value. While the factors discussed above will determine the exact price, it is possible to estimate its value from the gold spot price. This price moves throughout the day and is fixed twice daily – known as the London fix. These fixes can be found on the LBMA website or the live price with a gold dealer such as Physical Gold Ltd. You can then simply add a premium of between 7-12% to obtain a decent guide to the price of tax-free gold.
Call us for any advice on buying gold
At Physical Gold, we have a specialist team who can advise you on all matters related to the sale and purchase of precious metals. This includes guidance on the price of gold and how to invest in tax-free gold. We are one of the most reputed online precious metal traders in the country. Call our gold experts today on (020) 7060 9992 or simply reach out to us via our website. Our friendly customer service team is always at hand to ensure that you make the right investments when it comes to gold and silver.
Before the demise of Lehmans, AIG and the collapse of thousands of other financial powerhouses – the words “Counterparty risk” was generally used as more of a conjectural concept. Today the phrase is used to describe both the cause and effect of our global financial status-quo. Counter-party risk reduces confidence in financial instruments. Savings accounts, government bonds and low risk equities are now seen as a matter of last resort owing to its higher risk and lower reward reputation. The literary meaning of a savings account defies the purpose in which it should be used. It’s difficult to save if the level of return is less than the rising costs of living. It’s impossible to save, if the institution responsible for holding your savings has ceased to exist. The phenomenon of counter party risk goes beyond possible and now exists in a wide and spreading sphere of probable.
People can lose money in financial instruments regardless of the vigour of their investment.
Third party ownership of assets creates counterparty risks
Owning an undervalued mining stock with great earning potential and little (perceived) downside risk still attracts the prospect of a board of directors manipulating its value. Equally, its bank’s reluctance to lend money and/or inflated borrowing rates has contributed to the demise of many companies over the last few years. Whilst Gold ETF’s track the price of physical gold – if a large proportion of holders were to sell their holdings, there wouldn’t be enough physical gold to cover peoples’ investments. The most prevalent example of counterparty risk is buying a low yielding government bond in Greece 7 years ago, only to discover that investors were forced to write up to 50% off their investments.
In order to save money, you need to be earning more than inflation (3.6%) in addition to any currency devaluation. In order to have themoney you need to ensure you have minimised counterparty risk by taking ownership and possession of the investment you have bought. Precious metals are an obvious example of this with the population turning to gold in times of austerity. Often the causes and effects of counter-party risk are the same:
Causes & Effects of Counterparty Risk
3rd parties taking uncalculated risk’s
Exposure to debt in weak markets (e.g. Greece)
Cost of borrowing increased
Overall confidence diminished – reduces amount of cash and/or investment in entity
Foreign Exchange exposures prevalent in uncertain markets
Exposure to rouge traders
How physical gold investments beat counterparty risk
Physical gold is considered to be a safe bet. Several factors in the financial markets established physical gold investments as a safe asset class. One of the prominent factors is the lack of counterparty risk. As explained earlier, counterparty risks exist when the fulfilment of an investment is dependent on a third party. Stocks and shares of listed companies depend on the performance of that company. In order to generate returns, the stock must perform well in the equity markets. However, holding gold in its physical form nullifies this risk, as the asset is owned and controlled by you. Many people enquire about the advantages of buying gold in its electronic form. This is otherwise known as a gold ETF.
Many investors do not realise that gold ETFs are equally subject to counterparty risks. In many cases, the company that issues the ETF sells large quantities of the paper investment, without ensuring that it is appropriately backed by sufficient gold holdings. As a result, if several investors wish to call back their investments, it becomes impossible for the company to fulfil the payback. In this way, almost every investment vehicle that is linked to the global capital markets carry counterparty risks. The only way to nullify these risks is to own immovable or tangible assets like gold, silver, real estate, etc.
Will counterparty risk continue to rise?
The last financial disaster of 2008 witnessed the demise of large financial institutions like Northern Rock and Lehman Bros. Once again, 12 years down the line, the world is poised to face another possible financial debacle. Government debts are on the rise in several developed economies around the world. The collapse of the Greek economy in 2008 was partially due to the country’s government debt being disproportionate to the GDP.
Currently, China’s government debt is estimated to be 300% of the country’s GDP. If we look at the world around us, we realise that increasingly, companies and financial institutions are declaring bankruptcy. In the UK, there is a real risk of a housing market collapse. Downward adjustments of credit ratings are on the rise. Additionally, there is economic uncertainty created by political events like Brexit.
All of these factors will continue to put pressure on the global economy and create a toxic situation that could result in yet another global economic crisis. This will lead to a significant decrease in the number of counterparties that are willing and able to take on the risks of global institutional investors. Many watchful investors have already started moving their investments to gold. The current spot price of gold has risen to around $1600 and continues to rise, inching closer and closer towards the all-time market high of 2011. Clearly, investors are moving to the safe haven of gold.
Call us to discuss how you can protect your investments
At Physical Gold, the investment advice we impart to investors like yourself is backed by research on the global economy, capital markets, bond markets, commodities and precious metals. Our advisors are best placed to guide you on how to minimise your risks. In the current economic climate. Call our team on (020) 7060 9992 or get in touch with us via our website. We can help you build a safe and robust precious metals portfolio that can protect your investments.
Investors have always turned to gold and silver when it comes to precious metal investments, particularly in times of geo-political tension. Of course, gold has historically been the go-to asset class for precious metal investors. However, silver has become incredibly popular in recent years, in anticipation of expected price rises. But, what are the considerations that one needs to take when buying gold or silver?
Setting investment objectives
Depending on your objectives and investment amount, you’re usually best buying physical gold and silver coins as opposed to bars. These can be bought online from specialist precious metals dealers. Check out www.bnta.net for reliable brokers. Buying more coins at once will provide quantity discounts while maintaining divisibility. Infact, divisibility is one of the most important considerations when making investments in precious metals. Gold and silver bars can be great value for money, simply due to lower manufacturing costs.
However, when selling, a large bar can prove detrimental to your investment objectives. A bar can be sold only once, at a single price point. However, coins offer the possibility of spreading your investments. So, it is important to think ahead when actually making your investments.
Identifying a reliable broker
As stated earlier, the best way to purchase gold and silver is to go through a reliable broker. An online broker would be able to give you a wider variety of choices when it comes to both bars and coins. Of course, the first step is to check whether the broker is registered with a regulatory body like the BNTA. However, there are a few more things to consider before doing business with the broker. Ideally, you should be able to get a guaranteed buyback scheme from most reliable brokers. They should also be open to discussing your investment plans and offering free advice.
Discussing your investment objectives
Once the broker has been identified, make it a point to build your investment plan, using advice from the broker. If you are keen on purchasing particular gold coins and silver coins, you should let your broker know. That way, you would have a better chance of getting to know in advance when purchasing opportunities appear in the market. Ensure that your broker adds you on their mailing list. Doing this is an essential step to becoming a smart buyer as you would benefit from advanced notification of any good investment opportunities.
Stick to your key considerations when buying
It is important to remain guided at all times by the key fundamentals of building a portfolio, such as balance, liquidity and divisibility. Tax efficiency may also be an important consideration for you. UK coins are free from Capital Gains Tax. This is because they are legal tender in the UK. When buying coins, always ensure that you buy gold and silver coins with low premiums. Most dealers will offer you good discounts when you buy in bulk. Never buy obscure coins as they are hard to sell off later on. The Britannia and the Sovereign are possibly two of your best options when it comes to buying coins. If you are interested in coins with numismatic value, you can combine collectability with profits.
Call Physical Gold to find out about the best options in buying gold and silver
Physical Gold is one of the most reputed online precious metal brokers in the UK. It would be beneficial for you to call our advisory team on (020) 7060 9992, before purchasing gold and silver. We can also be contacted online via our website. Call us today.
Is gold storage something you’re thinking about? Are you interested in purchasing physical Gold or silver, but concerned about where you’ll store it? Our infographic highlights the various options available; to help put your mind at rest.
The main advantage of owning physical gold is that it’s the real thing! There’s no counterparty risk, as there’s no electronic trading or paper involved. It’s as real and solid as can be and something that you have the pleasure of holding in your hand.
But how do you keep a precious metal safe and secure?
Insured delivery direct to your door
Delivered to you fully insured, our delivery is discreet, so the whole neighbourhood won’t know what you’re taking delivery of. It’s packaged in plain, padded envelopes, safely and securely. We also track every package that we post, which allows us to follow up on any queries and provide reassurance on when you should expect your delivery. If your gold or silver is in stock, and you place your order before 2pm, then we should be able to get it to you by the next working day. Before 1pm to be precise. Should your order be out of stock then we’ll aim to deliver it within 2 – 3 days – depending on the stock availability. From 2018 all gold orders benefit from free UK delivery.
Once you’ve received your package and signed for it, there are several options for you to consider regarding storage:
Many people choose to keep their gold stored safely at home and there are many options available for home storage. A steel safe is the most obvious choice for safety and security – preferable bolted down to the floor. But if bolting the safe isn’t an option, then try to keep them safe somewhere out of sight, like in a cupboard, hidden by other items.
You can also use everyday household cupboard items, like tins, packets of cereal, boxes of tea bags etc. to hide and conceal your gold, but it’s important that you remember where you’ve stored it so it doesn’t accidentally get thrown away. There are many different steel safes available for home use. These include fireproof and waterproof ones. There are even models that can be unlocked by using your fingerprints. They can also be installed inside the flooring, underneath the carpet.
There are a number of ingenious secret storage items that you can purchase from PhysicalGold.com, such as clocks or wall sockets, to help you conceal & store your precious metals.
Hiding things under the mattress is also more common than you might think, but whichever home storage option you choose, you must ensure your home insurance covers the total value of the gold. The advantage of keeping your gold at home is that you know exactly where it is, you can keep it close and touch it, as often as you wish.
Bank Deposit Box
Safety deposit boxes at banks are considered to be extremely safe and secure, so it’s worth visiting your bank to ask about the availability of one if this is of interest to you. Many banks have been withdrawing these facilities over the past few years though, so there may be a waiting list or a box may be quite difficult to acquire.
Safety Deposit Facility
A third-party safety deposit facility offers boxes for you to rent to keep your small, personal household items safe. These facilities are usually open 9 – 5pm for you to visit and generally cost between £100 – £1000 per year to rent.
Since tariffs are expensive, it could work well as a short-term arrangement. The benefits of using a safety deposit facility are that your valuable assets are stored away from your home.
Additionally, these boxes are available in various sizes and you can choose one according to your requirements. Of course, one of the disadvantages of this arrangement is that you cannot access the box at any time of your choice. You can only do so when the facility is open. Also, there could be a natural disaster like a flood that could damage your belongings stored inside the box. In many cases, the operator may refuse to re-compensate you for your damages when this happens, simply because their insurance may not cover it
Professional Vault Storage
The most common (and safest) gold storage option is to arrange for the secure storage of your gold with your chosen dealer, as they have access to secure vaults. These professional vaults offer 24hr safety and security, giving you reassurance and peace of mind. The vaults are highly secure and generally don’t allow public visits, but rest assured your gold will be personally allocated and stored separately in a fully segregated account, within your own little section in the vault.
At PhysicalGold.com, pension gold, silver coins and gold coins are stored at Loomis International, UK – one of the UK’s most secure gold storage facilities. Silver Bars are stored at Network Securities in the Channel Islands – a specialist vault facility that has dual controlled security systems and a direct connection to the local police station.
So if you choose to store your precious metals with us, we can reassure you that all of our stored gold and silver is fully insured, segregated and completely ring-fenced and you can request home delivery of your gold at any time. However, given the high levels of security involved, it’s often not possible for the public to request to view their gold, but we can assure you that it is there – safe and secure.
Investors have two main options when it comes to storing their gold. They can either store it at home in a safe or suitable storage solution, or they can have it professionally stored on their behalf. There are many brokers that offer this as a service who will offer to store any gold you buy from them in an allocated vault, or you can also store it in a bank vault. The size of your portfolio will likely determine which option you go for but there are also other things to consider such as ease of access and the responsibility of keeping any gold you store at home safe and secured. The best method of storage is probably to use a combination of different storage methods, as by doing so you spread the risk of anything happening to your gold.
Having a safe stored in your home is an ideal solution for people with a smaller number of gold holdings since you can access it at any time. The one downside to storing your gold at home, however, is that you are solely responsible for its security. This means that you will need to ensure any gold is insured, otherwise, you won’t be applicable for any kind of pay-out should anything happen to it. Your home insurance costs are also likely to go up if you have a large amount of gold stored at home.
How should you actually do this?
If you choose to store your gold in this manner, then you should make sure that your safe is bolted to the wall or floor for security reasons and that it is hidden in a secure non-obvious place. It is also wise to let someone you know, and trust have access to its location and passcodes as well, just in case you fall ill or are unable to access it yourself for whatever reason.
There are several home safe options available in the market. You can also choose from a variety of sizes and locking systems. Fireproof safes are an excellent option to protect your valuables at home. These are manufactured using dual-layer steel walls and doors. They are pretty durable and are able to withstand a serious fire hazard and temperatures up to 1000°C. So, you can rest assured your valuables wouldn’t be destroyed. Many home safes feature padded flooring, so your gold and silver items aren’t scratched. Locking systems are pretty secure as well. The new generation home safes are manufactured with an optical fingerprint reader, as well as a digital lock. Several fingerprints can be stored on these safes, allowing access to trusted members of your family. This is also a great emergency option if you are unable to access the safe due to circumstances like ill health. You can have these safes bolted to the floor, secured inside the wall or installed underneath the carpets into your floorboards.
Other forms of storage
One common mistake made by a lot of investors is to hide their gold in a sock drawer or under the mattress, which is often the first-place thieves tend to look. If you’re storing your gold at home but don’t want to use a safe, then any hiding place you use should be subtle or clever enough that most people wouldn’t think to check there. Some people store their gold in everyday items such as fake cookie jars and hollowed out books. This is probably too obvious a hiding place as a lot of people have used these methods in the past. Another aspect to consider is that if you’re going to hide your gold under the floorboards you should also make sure you cover it with something like a cabinet or bookshelf.
Paying to store your gold in a third-party vault, not only delivers confidence that your precious metal is secure, but these types of services are almost always guaranteed to be insured. The benefits of storing your gold in a vault are that it can save on insurance costs and you’ll have peace of mind that your gold is secure. You can access your gold at any time and you’ll be provided with a unique code to allow you to access your vault. Vaults are guarded 24 hours a day, 365 days a year, unlike your personal safe which can be left unattended daily, when you leave the house.
Up until a few years ago, it was quite common to store your gold in a bank vault as it was a cheaper option for investors and guaranteed security. Banking hours and bank closures, however, have led consumers to distrust this method of storage, as it means they can’t access their gold whenever they need it. Very few banks offer gold storage services nowadays as the additional security needed is costly. Therefore, you would likely have to travel some distance to access your gold if it was stored in a bank.
Keep your gold safe and secure with Physical Gold
When purchasing gold through Physical Gold you have the choice of protected door to door delivery or high-security storage in one of our specialist vaults. Investing in gold isn’t risk-free so don’t leave yourself open to loss. Choose a solution that’s right for you and always choose a trusted provider. Call for expert advice on 020 7060 9992 or email email@example.com.
With the tax year end upon us, now’s the time that many take a hard look at their finances and make investment decisions for the following year. But if you’re one of the savvy investors already owning physical gold, then you’ll know buying gold and silver aren’t affected by the tax deadline.
Tax year-end brings a fresh start
If your money is currently in an ISA or savings account, then the tax year end might have you rethinking your investments and considering gold (or silver).
If you’re one of the thousands of investors wanting to move your money around, to reduce your tax exposure and maximise your gains, this article will provide insight into some important tax considerations, which every investor should know about.
Many investors just think of ISAs as tax-free investments, when in reality, they’re limited tax-free investments – meaning there’s an upper limit to how much you can save. The ISA limit for 2019/2020 remains at £20,000 maximum, but you can’t roll over any unused portion to the next year, so you have to use it or lose it.
Regular savings accounts are taxed
If your money is in an old fashioned, regular savings account, you’ll be charged a tax on any interest it generates. This makes a savings account quite unappealing for those who’ve already maxed out their ISAs. Especially with the highest available rates being around 1.5% and the majority of interest rates currently yielding sub-1% even before tax!
Capital Gains Taxes on assets you sell
If you’re looking into selling an asset or Buy-to-Let property that you own, you’ll likely end up paying Capital Gains Tax on the profits of that sale. This is especially true for those who’ve already reached their CGT allowance for the year. Many forms of Gold, on the other hand, are actually CGT free.
The lifetime allowance could affect your pension
The lifetime allowance, which was previously reduced from £1.25 million to £1 million, is a limit on the value of payments on your pension and could affect many people who’ve already reached this new allowance total. If you’ve saved into your pension throughout your working life, you could already be at this limit and you’ll be taxed heavier than in previous years. Check the Money Advice Service dedicated page for the latest allowance rates and related information.
UK Gold Coins have no Capital Gains Tax and no VAT
Physical gold has always been a worthy investment and gold investments make a great addition to any portfolio. Due to there being no upper limit on how much you can purchase in a year and certain forms of gold falling into the bracket for CGT and VAT free investments, it is looked on favourably by many investors. Currently, all bullion coins that are classed as legal tender in the UK which includes coins such as gold Sovereigns and gold Britannias, are CGT exempt. They are also VAT free providing the coins were minted after 1800 and classified as legal tender.
Coins to buy from Physical Gold
If you want to consider an investment that will appreciate tax-free, then take a look at our tax free-gold coins (including the 2019 Gold Sovereign and the Dragon Queen’s Beast) or our CGT free Silver. PhysicalGold.com even offers the opportunity to add gold to your Self Invested Personal Pension (SIPP) to achieve a balanced portfolio. Currently, the UK Government are willing to pay up to 45% towards the cost of your gold if you invest through a SIPP. This is applicable to all investment-grade gold bars or wafer that are professionally stored and have a purity of at least 99.5%.
Contact Physical Gold for 2019/2020 Financial Planning
Providing you’re looking for an investment that will help you diversify and protect your assets, whilst avoiding CGT and VAT (for gold), you can’t go wrong with Physical Gold. Call us without delay on 020 7060 9992 to speak to us or complete our contact form. We can provide guidance on how gold can comfortably fit into a wider investment portfolio for the financial year ahead.