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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.
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.
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!
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, 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.
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.
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%.
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.
Image Sources: Geralt
Daniel Fisher formed physical Gold in 2008, after working in the financial industry for 20 years. He spent much of that time working within the new issue fixed income business at a top tier US bank. In this role, he traded a large book of fixed income securities, raised capital for some of the largest government, financial, and corporate institutions in the world and advised the leading global institutional investors. Daniel is CeFA registered and is a member of the Institute of Financial Planning.