Now that the two main drivers supporting the Australia economy have stumbled (property and mining) – and the Australian dollar taken a beating – there is renewed interest in precious metals Down Under. Australian gold investors are having a fantastic 2015 so far.
The taxation of gold and silver in Australia is similar to the US or UK: There is a buy-side tax (Goods and Services Tax), a sell-side tax (Capital Gains) and the metals can be included in a self-directed retirement scheme, called a Self-Management Super Fund (SMSF). In other words precious metals are de-monetized and treated just like shares, bonds, or real estate.
Like Canada, Australia falls into an ambiguous category of being neither precious metal friendly nor unfriendly. Despite the harsh tax treatment, gold and silver is mined in great quantities, retail premiums are low and ideals of free-markets and transparent government are deeply ingrained in the populace
Goods and Services tax (GST)
Gold bars or coins 0.995 or more fine and silver bars or coins 0.999 or more fine are deemed to be ‘investment grade’ and are exempt from GST. Since gold Sovereigns, Krugerrands and American Eagles (US 50 dollars) and pre-2013 Silver Britannia’s are not ‘investment grade’ they are subject to GST. Understandably these are not hugely popular coins with Australian investors. Notably any gold or silver coin with numismatic value is also not ‘investment grade’ and thus subject to GST regardless of fineness.
Australian tax payers can avoid GST entirely by buying privately from non GST-registered sellers, ie. the majority of infrequent or one-off traders. You can find these on eBay and Silver Stackers. Visitors to Australia (ie. non- tax residents) can get GST costs refunded as explained here.
Identification is required by bullion dealers for trades worth A$5,000 or more. Cash transactions greater than A$10,000 must be also reported. Check out our Premiums section for information on gold and silver premiums at Australian bullion dealers.
Capital Gains tax (CGT)
CGT rules in Australia are similar to those in US/UK/EU. Capital losses can be offset against capital gains, and net capital losses may be carried forward indefinitely. One key difference is a 50% discount on CGT if assets are held more than one year. There’s also a tax free threshold of nearly A$20,000.
By spreading net capital gains over several years, using the 50% discount and staying near the threshold Australian tax payers can avoid significant CGT upon disposal of physical precious metals. It’s also worth noting that collectables less than A$500 have no CGT. The Australian Taxation Office may deem your numismatic coin(s) as being collectible(s). Best check with a competent tax accountant.
Self-Managed Super Fund (SMSF)
We are suspicious of all tax shelters because of the uncertainty around who exactly has direct title and physical ownership of the metals. Please see What is a physical precious investment? for more about our views on this subject.
Australian SMSFs in this regard are no different from IRA (US) or SIPP (UK) schemes. Nevertheless, a SMSF does allow for physical gold and silver to be included. Two reputable companies worth further investigation are FirstGold and Guardian Gold.
Duties and import tax
There is no limit to the amount of monetary instruments you can travel with in or out of Australia. The issue is you must declare amounts over A$10,000. Depending on your visa your personal affects (owned for more than a year) can enter Australia free of duty and taxes. Your precious metals may or may be deemed personal affects and there’s a serious chance you must pay GST on precious metals brought in Australia. We highly recommend asking Australian Customs and Border Protection (ACBP) about your specific importation before arriving in Australia.
There is no Australian tax or duty on the import or export of so-called investment grade gold and silver items as per Australian Taxation Office (ATO) definitions. See Goods and Services tax (GST) above or check out GSTR2003/10. However, ACBP have been known to slap the GST on imports of precious metals with a tax-now-refund-later approach. In some cases, the items have been seized before an assessment is made.
If your items meet the ATO definition of investment grade, and thus exempt from GST, we suggest you bring along a copy of GSTR2003/10 to show to the ACBP officer. Alternatively you can obtain in advance something called a “private binding ruling” for your importation directly from the ATO. This is a legal document that ACBP must abide by.
See our section on Internationally transporting precious metals for more details about travelling with precious metals generally.