Jump to content
Sign in to follow this  
Walktothewater

Avoiding taxes on gold and silver - specifically CGT

Recommended Posts

There's an 800lb elephant wrt. physical gold and silver ownership that doesn't get much attention, namely the risk of massive capital gains type taxes.

 

It's all well and good gold prices going to the moon, but what if the hammer comes down? For example, a 90% "emergency" capital gains tax, reliefs or allowances that suddenly don't apply, or special transaction fees/taxes putting off potential buyers of your metals? I don't see much popular opposition to this, particularly during a crisis situation. Metals in bailment will be the softest of targets. With capital and currency controls at Customs anyone with coins and small bars trying to sell abroad will be stuffed too.

 

Is this just the (de-bunked) confiscation argument but by different name?

 

Thoughts anyone...

Share this post


Link to post
Share on other sites

Well, there's no capital gains tax in Hong Kong anyway and with the world's largest reserves per capital I'd say it is more likely that Hong Kong tries to emulate Singapore and Shanghai and promote itself as a place to trade and store gold without any tax burden.

 

As for confiscation type taxes - you can run and you can hide, but if broke, corrupt and dishonest governments want it, they will take it in the name of the ballot box - too many countries have passed the point were those who take from the tax pot grossly outnumber those who contribute you can't stop them.

 

That being said, any asset and any income stream is vulnerable to being stolen by crooks in office (all in the name of fairness).

Share this post


Link to post
Share on other sites

There is no elephant in the room ( at the moment) ( if you buy the right coin). Paper, on the other hand...

Share this post


Link to post
Share on other sites

yes I accept your point Jake. I have many coins myself bought for cash from different places. They have travelled with me all over. No one but me knows I have them. Ive no doubt many people feel "to hell with paying taxes", and plan to sell their physical bit by bit when, where and to whom and never declare it...

 

BUt the problem arises when you have more than just a few ounces and plan to convert these into something substantial when the times comes, perhaps quickly and all at once. Outright purchase of a rental property, a business with premises, capital equipment etc. What then? How are you supposed to convert say 100oz into a property in London or wherever without getting whacked with a 90% "crisis" CGT rate ??

 

Unless you're willing to implement a total (and quasi legal) lifestyle change - changing tax residency or confusing the tax man with multiple residences all over the world, seeking out "under the radar" buyers of large quantities of physical i.e. effectively "laundering" your metals - I think many investors are gonna get stung at sell time….

Share this post


Link to post
Share on other sites

Yes, this is a very important point, I think that gold "hoarders" are going to be so easy for The Powers That Shouldn't Be to demonise and I don't think that any of us realised just quite how vehemently TPTSB hate gold. On a personal level, one could start develping a small network of people that you trust and would be ready to trade with in the future.

 

There are no capital gains taxes on gold or silver in Germany and that is to me the country with the least amount of tolerance for government abuses, for obvious historical reasons. Hong Kong and Singapore are other obvious choices.

 

The thing that I have done is to make the decision that whatever you have can be taken away by TPTSB in the name of fairness if/when the state goes bankrupt and so the most sensible thing is to work as little as possible before then. A kind of half-way going galt. Tragic that we have to be thinking like this now, what is the hedge for 1984?

Share this post


Link to post
Share on other sites

Yes, this is a very important point, I think that gold "hoarders" are going to be so easy for The Powers That Shouldn't Be to demonise and I don't think that any of us realised just quite how vehemently TPTSB hate gold. On a personal level, one could start develping a small network of people that you trust and would be ready to trade with in the future.

 

There are no capital gains taxes on gold or silver in Germany and that is to me the country with the least amount of tolerance for government abuses, for obvious historical reasons. Hong Kong and Singapore are other obvious choices.

 

The thing that I have done is to make the decision that whatever you have can be taken away by TPTSB in the name of fairness if/when the state goes bankrupt and so the most sensible thing is to work as little as possible before then. A kind of half-way going galt. Tragic that we have to be thinking like this now, what is the hedge for 1984?

 

Totally agree on Germany. One of the reasons I own a property there.

Share this post


Link to post
Share on other sites

Interesting related story of a Californian couple who found a “buried treasure” of 1,400 or so gold coins on their property.

 

http://www.sfgate.com/business/networth/article/Couple-s-gold-discovery-will-be-taxed-at-top-5271261.php

 

Apparently, it’s an open and shut case for the IRS. The value of the find - conservatively estimated at $10m - is to be counted as taxable ordinary income for tax year 2013/14. So the poor buggers must pay almost 50% income tax! Not only that but they’ll face penalties, interest and perhaps legal action if they don’t settle up by end of tax year on April 15

 

I bet they wish they just shut the fck up! LOL :) Even if they argued that the find was a capital gain they'd still be stung for major taxes.

 

This goes back to earlier points, keeping quiet about your physical gold is perhaps the best, and maybe only, way to avoid crucifying taxation. Sell a few ounces here and there to fund small purchases or on-going expenses

 

This also reinforces my view that gold investors are on a collision course with tax authorities one way or another…

Share this post


Link to post
Share on other sites

There's a lot we may not know about the couple who found that gold. Maybe they have another couple of old cans undeclared. Maybe they are happy with 5 million and happy to play by the rules.

The lesson to be learned is to STFU if you find cans of old gold and want to keep it all. But hey, they are 5 million better off! Their find enters the history books and their consciences are clear.

47%taxes are a disgrace however. I bet the European aristocracy know how to pass their gold from generation to generation without paying a penny in taxes...

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

×