Gold bullion accounts

[AgeingBabyBoomer]

Hi,

Not long ago joined gei, and I am looking ot hedge a portion

of my savings into physical gold.

So far I have looked into three companies, and tried to compare their

services:

 

Kitco - so far as I can make out, there are only two options,

buy unallocated gold, or take delivery and sort out your own

secure storage.

Unallocated gold seems a bit risky (Puplava advises against it),

and I don't live in a fortress, so a safe deposit box would be my

only option.

 

Apparently, once the gold has been out of the vaults, it is

regarded as tainted as it may have been tampered with, and

may not fecth its full value on resale. Not to mention the hassle

of shipping the stuff securely to whereever.

 

 

GoldMoney - looks very convenient, but doesn't explicitly say if the

gold is allocated or not.

Hosted in Jersey - which could be useful for tax purposes (for them

at least).

I didn't care much for their sliding scale of prices, which are way

above spot, and only reduce slightly with the amount invested.

 

The gold grams idea is neat, I just wonder what their transaction

charges are for these essentially internal transfers..?

 

 

BullionVault - very impressive website, with lots of info.

Gold is bought as a slice of a numbered bar, so it is definitely allocated,

and the gold has to exist in their vaults. They also store it for you

at what seem to be quite inexpsnsive rates.

Also, you can move between gold and cash inside the same account.

 

 

Has anyone knowledge of any others and the details of how the gold

is kept, allocated etc?

 

To my mind, BullionVault looks like the most secure (or at least has

the most reassuring marketing materials) and easy to use for a UK based bod.

 

Opinions to confirm or deny this would be welcome.

 

(Possibe suitable topic for CW radio...? Hey, frizzers...?)

 

Cheers

ABB

 

PS Has nayone considered that all these internet based traders (not

just gold) would be unavailable if the internet 'went down' for

whatever reason? (e.g. major financial crisis).

 

Another consideration is being able to trade by phone in this eventuality.

[grunff]

I can't comment regarding security, I only know about as much as you do. After going through the process I chose to give BV a go, and I have to say they're as slick as they first appear. Everything works just as expected, and any questions are dealt with quickly and efficiently.

[frizzers]

I like http://www.goldmoney.com/ , but be careful if you make large purchases and you want to time the purchase. Better to cost average in.

[chas and dave]

BV's been great for me.

 

Now > capital gains - if you sell gold bulliong from BV to realise a gain, and then go invest straight off in goldmoney, or a gold etf, or Central Gold Trust or krugerrands - would that be viewed as a new and different investment, or would the tax office view it as the same investment, therefore gains would not be relaised if reinvested within 30 days?

 

(mostly I am able to spell OK)

[AgeingBabyBoomer]

Thanks for the replies so far.

 

chas and dave, don't get me going on CGT -

I haven't a clue, but like you envisage anumber of

scenarios in which the amount of tax payable

is unclear.

 

e.g. suppose I make multiple buys at BV, then sell

separately for various amounts of gain.

Is the gain attached to the allocated gold lots (analogous to

shares and hence any losses could be offset against each other),

or is the whole thing aCGT black box and tax payable on the

difference between the amount invested and amount cashed

out in a fiscal year....?

 

I'm damned if I know

 

ABB

[Newbear]

Here's another question about Goldmoney. They also deal silver bullion. In the UK I understood that this attracts VAT. But on the phone Goldmoney told me you pay no VAT to buy silver from them. They assured me this was legal but could only explain it by saying "there is no manufacturing involved". Can this be so? Anyone understand this?

[sigmadelta]

I think I heard somewhere that you don't have to pay VAT if you don't actually take physical delivery.

Goldmoney store it for you, but you don't take delivery in the strict sense of the word.

 

Here's another question about Goldmoney. They also deal silver bullion. In the UK I understood that this attracts VAT. But on the phone Goldmoney told me you pay no VAT to buy silver from them. They assured me this was legal but could only explain it by saying "there is no manufacturing involved". Can this be so? Anyone understand this?

[AgeingBabyBoomer]

I'm still not sure about silver and VAT - I found a page

emenating from chards where it states there is no VAT

to pay if no physical delivery occurs.

(if it does, the deliverer is obliged to notify HMRC...allegedly).

 

As far as I can tell, with allocated gold, the CGT situation is

the same as for a share, and gold is most definitely VAT

exempt as of 1/1/2000.

 

I believe (from trying to understand info on the HMRC

website) that if hysical delivery of gold is taken, then

you might have to notify HMRC even though it is VAT

exempt, in cae you turn it into jewellery, which is VAT liable.

 

Simple huh?

 

Best bet seems to benever to take delivery - though

that does't help dispell the rumours about phantom

supplies backing up the whole investment...

 

ABB