FAQs

[Last updated December 2014]

We get quite a few challenging questions through our contact page. So far we have responded to everyone who’s contacted us, so please feel absolutely free to fire off your questions. Or you can post comments – check out the comment form at end of this page or on other pages. Below is a selection of what our readers have asked, and our responses.

In this section

Q: Can US citizens use the online bailment services you talk about?

A: Yes, for now anyway. The future is less certain due to FATCA and as this recent decision by VIA-MAT seems to suggest.

Q: Do FATCA rules apply to metals held in bailment abroad (US citizen)?

A: It almost all cases, yes. You will have to report the assets on both FBAR and 8938 forms. But since the assets are physically held abroad you can always go collect them and keep them in your direct possession, in your foreign property or safe deposit box, which doesn’t have FATCA reporting requirements.

Q: Is there Capital Gains tax on gold jewellery?

A: Our read of this is it depends on what your taxing authority considers to be liable assets. In the US, the answer is probably yes since the IRS has a very broad definition of capital gains including profitable disposal of boats, cars, furniture, collectibles, and other personal items.

Q: Is jewellery an alternate way to transport gold across borders?

A: Yes it is, but you must be careful to ensure that it’s considered personal possessions like your laptop, clothes etc. and not deemed to be “goods imported” or goods of a commercial nature. See our section on Customs duty & import taxes for more info.

Q: Is it cheaper to buy metals in Hong Kong and get them shipped to Canada? What taxes in this case do I have to pay?

A: Cheaper? Probably. Buy premiums in Hong Kong can be ridiculously low. Since you’re having them delivered directly to Canada by the vendor remember that if coin purity is less than 0.995 you’ll need to pay Canadian sales tax. In any case, expect a letter from the customs people asking you to confirm this. Make sure the couriers receipt has the correct harmonised system code(s) and makes it clear the items are not commercial goods. Reputable dealers familiar with international shipping should know all this anyway.

Q: If the UK were to adopt repressive measures against precious metals, could customers of UK-based BullionVault and GoldMoney be compromised in any way (force majeure?)

A: Nothing we’ve read in the fine print makes us believe BV and GM customers would be immune from such measures. This is why a diversified approach to storage is recommended.

Q: I live in UK, I want to buy silver Britannias because of the CGT exemption. So how can I legally avoid or minimize VAT on 1oz silver Britannias?

A: We notice this question comes up a lot on various discussion forums. There is a perfectly legal way that works, read about it here.

Q: I have inherited some foreign gold coins. What is my Capital Gains tax (CGT) liability (Scotland)?

A: Good for you! HMRC will assess your basis, that is your deemed purchase price in order to assess CGT liability, as the fair market value at the time you inherited the coins. See here for more details.

Q: Should I put gold in my ISA?

A: You can’t put physical precious metals, as per our definition, into a UK ISA even if you wanted to. If you insist on putting physical gold into a UK ‘tax wrapper’ then go the route of a SIPP.

Q: Should I put gold in my self-directed IRA?

A: Depends on your individual circumstances(!?). Coin-oriented self directed IRAs are quite popular though. See here.

Q: Should I buy silver coins or rounds?

A: With every purchase you should have one eye on how and where you want to store, and how and where you’ll want to eventually dispose of the items. For small silver items, we prefer locally recognizable 1oz silver coins. In our (limited) experience of this issue, silver rounds or odd shaped ingots are not very popular outside the US.

Q: What are the best gold coins to hold for an American citizen?

A: In terms of most ideal coins for disposing of later within the US, probably 1/2oz or 1oz gold Eagles (modern $25 and $50 Dollar denominated US Mint gold bullion). Although anything we list here will be pretty much just as good.

Q: I’m going to Hong Kong on a business trip. Can I buy and bring back gold coins to EU/Germany?

A: Yes. We suggest staying under the EUR10,000 “monetary instruments” limit so you don’t have the hassle of declaring. Keep receipts and insist they are personal possessions in case you do get stopped. Check out our general advice here.

Q: Are Saint Gauden $20 gold coins better than Eagles?

A: Better in what sense? More than likely it means better profits for the dealer who wants to sell you “semi-numismatics”. Read our section on What’s the deal with numismatics?

Q: I don’t want to fill out a form 1099-B or report anything to the IRS, what coins should I avoid?

A: We cover this here.

Q: My dealer says I should buy Eagles, Buffalo’s and other US Mint gold coins only, and should avoid foreign coins. Is this right?

A: Foreign coins can usually be bought for lower premiums in the US and there’s no harm having a few in your portfolio. In fact they can be ideal for taking outside of the US where, to the vast majority of dealers we’ve ever dealt with, gold is gold whether it’s an American Eagle or an Austrian Corona. See here for more on this topic.

Q: Are there any coins exempt from Capital Gains tax in the US?

A: None that we know of.

Q: Should I just keep all my metals at home and tell no one?

A: Ask anyone who has ever lost or had coins stolen and they will say maintain at least three (3) different storage options. However, we accept that for small portfolios keeping everything close and anonymously at hand probably makes sense.

Q: What’s the difference between online and traditional bailment?

A: “online bailment” is simply a term we invented(!). The key difference is online bailment services provide an unallocated, also known as pooled, type bailment which means you own part of one or more large bar(s) or pool of bars/coins. However, some online bailment services are moving towards registered bar ownership for larger clients.

2 comments on “FAQs
  1. Lynn says:

    I have a follow-up to the question, “Do FATCA rules apply to metals held in bailment abroad (US citizen)?” Is the answer still “yes” if precious metals are held abroad by a domestic institution, i.e. Hard Assets Alliance, Delaware Depository, etc.? To clarify, these companies partner with foreign depositories, banks, etc., to store clients’ metals abroad. Hard Assets’ web site states: “Exempt from US reporting requirements. As a domestic institution, GBI’s US customers are exempt from both the FBAR and Form 8938 filing requirements if offshore metal storage is elected.” However I cannot find information anywhere to verify this claim.

  2. Brian Stanko says:

    Hi,
    You posted a link regarding the import implications of bringing gold coins into Panama. Thanks for that.
    Do you have any information on the export of gold coins and bars from Panama that are in excess of $10,000 USD?
    Thanks

Comments or questions are most welcome