Why buy silver through offshore storage?
The principal advantage is that qualifying physical silver can be purchased without the initial 20% UK VAT charge, provided it remains within the offshore storage arrangement.
This can make a substantial difference to the initial cost of acquiring physical silver.
Offshore storage also means you do not need to arrange secure storage of significant quantities of silver yourself. This can be particularly relevant because silver is considerably bulkier than gold for an equivalent investment value.
However, secure storage carries an ongoing cost, so the VAT saving should not be considered in isolation. Buyers should compare premiums, storage charges, tax treatment and their preferred form of ownership before choosing between the available products.
How is my VAT-free silver stored?
VAT-free silver purchased through Physical Gold is held at Brink’s in Zurich, Switzerland.
The bullion is held on a fully allocated and segregated basis, meaning you retain legal ownership of physical silver allocated to you rather than simply having exposure to the silver price. The bullion is also insured while held within the storage arrangement.
Storage charges apply. Physical Gold currently charges VAT-free silver storage semi-annually, so check our delivery and storage page for the current rate and minimum charge rather than relying on figures that may subsequently change. + Read more
Can I take delivery of VAT-free silver?
The products within this category are specifically offered for offshore storage rather than UK delivery.
If you subsequently decide to import the silver into the UK and take physical delivery, VAT will become applicable.
If your priority is keeping physical silver yourself, choose our standard silver coins or silver bars for UK delivery instead.
The choice is therefore:
Want to take UK delivery?
Buy standard silver coins or bars and pay the applicable VAT.
Don’t require UK delivery?
Consider VAT-free silver held within the Zurich storage arrangement.
Is VAT-free silver completely tax-free?
Not necessarily. VAT and Capital Gains Tax are separate taxes.
Qualifying silver purchased through the offshore arrangement can avoid the initial UK VAT charge while it remains within that arrangement.
Capital Gains Tax treatment depends on the product.
Silver Britannias are British legal-tender coins and are therefore exempt from CGT for UK residents.
Silver bars do not benefit from the same legal-tender exemption, so CGT may need to be considered when bars are sold at a gain, depending on your circumstances and applicable allowances.
This is one of the most important differences to consider when comparing VAT-free silver coins and VAT-free silver bars.
What does fully allocated and segregated mean?
Fully allocated storage means physical bullion is allocated to your holding rather than your investment representing a general entitlement to an equivalent quantity of silver.
Segregated storage provides further separation of the bullion held on your behalf within the storage arrangement.
This is an important distinction for buyers who specifically want to own physical silver rather than obtain exposure to movements in the silver price through a financial product.
What are the costs?
VAT-free does not mean cost-free.
The price you pay for your silver consists of the underlying bullion value plus the applicable premium. Secure storage charges also apply while the silver remains in Zurich.
The overall cost will therefore depend on:
- the silver product you choose;
- the current silver price;
- the applicable bullion or coin premium; and
- ongoing storage charges.
You can check the live silver price and our current storage charges before buying.
What happens when I want to sell?
You do not need to import your silver into the UK before selling it.
Silver held within the Zurich storage arrangement can be sold from storage, avoiding the need to take physical delivery first. Physical Gold’s current VAT-free bar product specifically provides for selling back from storage. (Physical Gold)
Contact our team when you want to sell to obtain a live price and instructions for completing the transaction.
If you already hold silver personally rather than through the VAT-free storage arrangement, see our sell silver coins or sell silver bars pages.
Why buy VAT-free silver from Physical Gold?
Physical Gold is a specialist precious-metals dealer based in London’s Hatton Garden.
Our VAT-free silver service provides a way to purchase allocated physical silver without paying the initial UK VAT charge, provided the bullion remains within the qualifying offshore storage arrangement.
Choose between:
VAT-free Silver Britannia coins – individual 1oz British legal-tender coins with CGT exemption for UK residents.
VAT-free silver bars – 1kg investment-grade silver bars for buyers who prefer larger individual units.
For assistance, call 020 7060 9992 or email info@physicalgold.com.