Are Gold Coins A Good Investment Uk


Crown Gold Or Fine Gold

Investing in Gold and Silver Coins UK

Gold bullion coins need to be a minimum of 90% fine gold to qualify as investment gold. Older USA, and many European gold coins were made of 90% . British gold sovereigns are 22ct gold , while some modern gold bullion coins are 99.9%, 99.99%, or even 99.999% fine gold . There is no major reason to choose one standard over another in the UK, although some countries have different tax or import charges on coins lower than 24ct.

Gold bars need to be at least 99.5% to qualify as investment gold for VAT exemption.

Gold As A Hedge Against The Dollar

The idea that gold preserves wealth is even more important in an economic environment where investors are faced with a declining U.S. dollar and rising inflation. Historically, gold has served as a hedge against both of these scenarios. With rising inflation, gold typically appreciates. When investors realize that their money is losing value, they will start positioning their investments in a hard asset that has traditionally maintained its value. The 1970s present a prime example of rising gold prices in the midst of rising inflation.

The reason gold benefits from a declining U.S. dollar is because gold is priced in U.S. dollars globally. There are two reasons for this relationship. First, investors who are looking at buying gold must sell their U.S. dollars to make this transaction. This ultimately drives the U.S. dollar lower as global investors seek to diversify out of the dollar. The second reason has to do with the fact that a weakening dollar makes gold cheaper for investors who hold other currencies. This results in greater demand from investors who hold currencies that have appreciated relative to the U.S. dollar.

Should I Buy Gold Or Silver Coins

We’d say buy both. The wise investor has a diversified portfolio, so that a sudden dip in the value of one of their investments won’t wipe out a huge percentage of their fund. Gold, as we’ve seen, generally rises steadily in value, but not spectacularly.

Silver investment performance is much more fluid, giving you more opportunities to make rapid profits or buy cheaply.

A mixed gold and silver investment will give you the best of both worlds, with the dependability of gold and the flexibility of silver.

Frequently Asked Questions

It depends on the markets. Silver is more susceptible to market changes and can gain and lose value quickly. Gold is more reliable, tending to gain value slowly but steadily with faster growth in challenging markets.

Only silver UK legal tender coins are VAT-free. All investment gold bullion is free from VAT and CGT.

We recommend bullion as the safest, tangible investment.

Silver is more affordable than gold, giving you greater flexibility to sell and buy.

Most silver coins are liable for VAT and CGT. Silver is volatile so best seen as a long-term investment. Silver requires more stage space than the equivalent value of gold, adding cost / inconvenience.

Gold is recognised worldwide as a dependable investment, and gold UK legal tender coins are both VAT and CGT exempt.

Gold is more expensive to buy than silver so gives you less flexibility when selling though smaller gold coins are relatively affordable.

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Uk Gold Queens Beasts

The Queens Beasts coins are issued by the Royal Mint in gold and silver, and depict the heraldic Queens Beasts statues representing the royal line of ancestry.

They are not legal tender, but they are valuable as collectors items or for their metal content.

Diameter of 38.61 mm.

Available in £100, £25 and £5 denominations.

Composed of one troy ounce of gold, one quarter troy ounce of gold and two troy ounces of silver respectively.

How To Produce Invoices If You Opt To Tax

2014 Gold Britannia 1 oz Bullion Coin Horse Privy

As opting to tax a transaction is simple – once you have fulfilled the conditions in paragraph 4.4, 4.5 and 4.6, all you need to do is to include the following statement on your invoice.

The next sentence has force of law.

We have opted to tax this transaction.

But note that once youve opted to tax a particular supply you cannot change your mind and exempt it.

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Could I Just Invest In Gold First

Gold still has value in todays society, even if it no longer backs the US dollar or other global currencies. It is still extremely important to the world economy. To verify this point, all one needs to do is look at the balance sheets of central banks and other financial organizations like the International Monetary Fund.

These organizations now control nearly a fifth of the worlds above-ground gold supply. Furthermore, several central banks have raised their gold holdings, signaling long-term concerns about the world economy.

One of the reasons for golds importance in the modern economy is that it has efficiently preserved wealth for hundreds of generations. For currencies denominated on paper, the same cannot be said.

In the early 1970s, one ounce of gold was worth $35. Assume you had the choice of keeping an ounce of gold or keeping the $35 you have now. They would both buy you the same thing, such as a brand-new business suit or a high-end bicycle.

If you had an ounce of gold today and converted it to todays values, it would still be enough to purchase a new suit, but not the $35. In other words, if you kept the $35 instead of the one ounce of gold, you would have lost a lot of money since the value of gold has increased while the value of a dollar has decreased due to inflation.

Which Sovereigns Should You Invest In

Once youve decided to buy gold sovereigns as an investment, the next big decision is how much to invest and what type of coins to acquire.

The most sensible and prudent strategy is to diversify your investment.

Obviously, this depends on your personal circumstances and you should only ever invest an amount youre comfortable with.

Here are some of the types of gold coins you may want to consider

Pre-1604 Sovereigns

Gold sovereigns minted in 1604 or before are highly desirable due to their scarcity and rarity value.

Bigger and heavier than todays sovereign and made from purer 23-carat gold, their prices are not affected by the market price of gold and they can fetch thousands.

Definitely the specialist domain of collectors rather than purely speculative gold investors.

Post 1604 Sovereigns

Even a sovereign which is in a relatively poor condition can command an extraordinary price, especially if they are rare.

Only ten examples of The King George III 1819 Sovereign are known to exist and a fine example achieved a staggering £186,000 when it went under the hammer in 2013.

The more modern 1859 Victoria Ansell coin – named after the chemist George Ansell, who helped to develop the stronger alloy used by the Royal Mint in Sovereign production – is another rare Sovereign. Less than 25 are believed to exist and, back in 2012, a fine example sold for more than £15,000

At Warwick & Warwick, we are experts in coin valuations and frequently sell rare gold sovereigns at auction.

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The Gold Mining Sector

The mining sector, which includes companies that extract gold, can experience high volatility. When evaluating the dividend performance of gold stocks, consider the company’s performance over time in regard to dividends. Factors such as the company’s history of paying dividends and the sustainability of its dividend payout ratio are two key elements to examine in the company’s balance sheet and other financial statements.

A company’s ability to sustain healthy dividend payouts is greatly enhanced if it has consistently low debt levels and strong cash flows, and the historical trend of the company’s performance shows steadily improving debt and cash flow figures. Since any company goes through growth and expansion cycles when it takes on more debt and has a lower cash on hand balance, it’s imperative to analyze its long-term figures rather than a shorter financial picture timeframe.

Investing In Gold Bullion Coins

Buying Gold Coins – Everything You Need To Know

British legal tender gold coins also include the Queens Beasts and Lunar series, Gold Standard, Royal Arms and Gold Sovereigns and Britannias.

Face value denominations range from £10 for the 1/10 th ounce Gold Britannia, to £100 for the 1oz. flagship version, for which you should expect to pay at least fifteen times its face value. With a wide choice of sizes, these coins represent a relatively affordable route into gold investment.

They are minted in limited numbers and many are quickly snapped up by savvy investors, so you may need to consider alternative coin ranges or years of issue, to create the investment you want. Remember that unlike other gold investments, these gold coins are VAT and CGT-free, and represent a reliable, easily stored and enjoyable basis for starting or building your investment strategy.

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Invoicing When You Buy From A Person Who Does Not Trade In Investment Gold

This section has force of law.

You must issue an invoice on behalf of the seller if:

  • the value of the purchase is more than £5,000 or
  • you make more than one purchase from the same supplier and the total value of your purchases from that supplier has gone over £10,000 in the last 12 months.

It must contain all of the relevant details specified in paragraph 6.4.

Also, the invoice must include the following declaration which must be signed by the seller:

I declare that to the best of my knowledge the details shown on this invoice are correct. .

About The Special Accounting Scheme

The Special Accounting Scheme for gold is to be used for the transactions in gold listed at paragraph 11.2 between VAT-registered traders.

Under normal VAT procedures, if youre a VAT-registered trader selling goods you issue a VAT invoice and receive payment for the price of the goods and the VAT due on the sale. You then account to us for this VAT on your next VAT Return.

The scheme transfers the responsibility for paying the VAT on certain transactions in gold from the seller to the buyer.

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Bad Guys Or Simply Salesmen

E.E. Cummings famously wrote “a salesman is an it that stinks Excuse”. We would find it hard to improve on his observation.

There are many salespeople employed by many companies to talk you into buying the product they are trying to sell. Most sales personnel are paid at least partly on commission, so no matter how sincere they may try to be, there is always a conflict of interest, yours versus theirs. We offer no prizes for guessing which takes precedence. Also, even where sales staff are not paid commission, there will be targets, and if these are not achieved, the salesperson will be under pressure to justify retaining his paid employment. This includes coin salesmen.

It is easier for any business to attract and recruit sales staff if they pay a generous commission. It must also be easier for the sales team if the company does not apply many rules of conduct. This means that many salespeople will tell you what you want to hear if it helps them sell you something. It may not be the truth, and probably isn’t.

If you buy coins, or any other product, from such a salesperson, or such a company, it is almost certain that you will not be making a good investment.

New Vs Secondary Market Products

2017 Full Sovereign Gold 10 Coin Investment Bundle

Generally speaking, secondary market coins and bars will cost less than their new equivalents, in which case, they are the better buy. Because their premiums are lower, they are often in greater demand, and are therefore not always instantly available, and you might have to wait. This years brand new coins are usually more readily available, but will usually be at slightly higher premiums than secondary market coins. For example, as we write this secondary market bullion sovereigns can be bought at a lower premium than the 2022 gold sovereign.

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When You Can Reclaim Input Tax

If you opt to tax a particular supply of investment gold youll be able to reclaim all the related input tax as youll be making a taxable supply of investment gold. To reclaim all your input tax youll need to be able to show that none of your input tax relates to any exempt supplies of investment gold.

If you make exempt supplies and are registered for VAT, you may not be able to reclaim all of the input tax you incur. Normally you can only reclaim input tax incurred on goods and services used, or to be used, in making taxable supplies. Youll find more about this in Partial exemption . But there are special rules about reclaiming input tax you incur on some of the goods and services that are directly attributable to your exempt supplies of investment gold.

These special rules are set out in paragraphs 5.2, 5.3 and 5.4.

Gold Is Easier To Store Than Silver

The more-for-your-money aspect is a double-edged sword, though. Silver takes up more physical volume than gold. Since the same size investment literally buys more silver than it does gold, that means silver holdings will take up a lot more space will cost more to store and transport. Oh, and it tarnishes too.

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Advantages And Disadvantages Of Buying Gold Bars

The first thing to keep in mind is that there is no right or wrong investment when it comes to buying gold bars or gold coins. There are several things to consider when making a choice based on your needs: how long you want to hold on to it, where you will store it, and your exit strategy.If you plan on holding gold as a short-term investment, you may prefer the flexibility of owning several smaller bars. You can then sell them as and when you wish. However, buying ten 100g gold bars will cost you more than buying a single 1kg gold bar.This is because of something called the premium, which is the cost added to the gold price. The premium factors in costs such as manufacturing, handling, packaging, insurance and delivery. The best way to keep premiums down is to buy larger bars. At the time of writing you would pay around 1.5% less if you bought a 1kg gold bar instead of ten 100g bars, saving approximately £750.

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Gold is one of the most efficient stores of monetary value. At todays prices, you could easily fit over £12,500 worth of gold, a 250g bar, in your pocket not that we would recommend it. The equivalent value in silver would weigh over 15kg. Due to its compactness and value, storing gold bullion is much more convenient comparedto gold coins or silver. In any case, we recommend that all gold bars or coins are stored in a vault or domestic safe for security and peace of mind.

What Is The Difference Between Allocated And Unallocated Gold

Gold Investing UK 2021 – Best Methods to Invest in Gold for UK Investors

In a nutshell, allocated gold is solid bullion that is owned by someone. Owning allocated gold is the only way to properly own bullion and is independent of the price that banks give it meaning it is the ultimate safe investment. You might need to pay a little more in the way of storage costs, but allocated gold is the truest way to invest in this commodity.

Unallocated gold is an imitation of gold investment. The gold remains in the property of the bank and is backed by a banks reserves, meaning that buyers in allocated gold are effectively investors in the bank and receive premiums in return. This is the most common form of gold investment worldwide.

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Is Buying Gold Coins A Good Investment

Please Note: This website was created by William T. Barry and the links provided along with any reviews may produce affiliate commissions if you decide to invest.

This does not affect the deal you get from the Precious Metal Companies and in some cases may provide additional benefits.

Hope you enjoy reading,

Dollar Bill.

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Advantages And Disadvantages Of Buying Gold Coins

One of the main advantages of buying gold coins is that they are smaller and, therefore, more affordable than most gold bars. Theres also greater flexibility and control when it comes to selling.

Owning ten 1-oz gold coins compared to a 10-oz gold bar means you do not have to sell all your gold at once. You could sell one or two coins when needed, and keep hold of the rest.

It is possible to collect gold coins. Most coins are valued at their weight in gold or silver, but there are certain coins that have a greater value due to their rarity or provenance.

Collector’s coins, called numismatic coins, can sell at a very high premium, and their prices are dependent on various factors. However, learning about all the different aspects that affect the value of numismatic coins takes a lot of study. For most people, standard bullion coins are a simpler and safer investment.

Depending on where you are based, one of the best reasons to invest in gold coins is that you could be exempt from CGT. This is because some coins are still treated as legal tender.

The Sovereign, Britannia, Lunar and Queens Beasts are exempt from CGT for UK residents. This presents a significant tax advantage, especially compared to other gold coins and even gold bullion bars.

However, the downside to buying coins is the larger premium. One way of reducing costs is by purchasing coins in bulk. We offer discounts for purchases of 2 or more coins.

Interested in buying gold coins?Find out more here


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