CGT on the sale of physical gold and the 30 day rule

[madrid]

Do you pay capital gains on the sale of physical gold which you own but is held by a company such as BullionVault - and I don't mean gold coins - I mean allocated or unallocated gold in a pooled account. And the 30 day rule that applies to shares - does that apply to the sale and repurchase of physical gold in a pooled account. If the 30 day rule does apply - would it apply if you sold the gold and then repurchased it in a different domicile to the UK like the USA or Switzerland through the same company like Bullion Vault? And what if you sold physical gold and then bought physical silver in it's place? Is there a special capital gains treatment for this transaction?

[pawncob]

VAt details:

http://www.hmrc.gov.uk/manuals/vgoldman ... ld1100.htm

[section 44]

What's the relevance of "physical" gold. Is there non-physical/intangible gold? Acapulco gold?

[maths]

Not an issue I've had to consider but believe the position is as follows:

Do you pay capital gains on the sale of physical gold which you own but is held by a company such as BullionVault - and I don't mean gold coins - I mean allocated or unallocated gold in a pooled account.

Yes.

And the 30 day rule that applies to shares - does that apply to the sale and repurchase of physical gold in a pooled account.

Yes. The legislation which refers to "securities" (eg shares) extends the term to basically indistinguishable assets (commonly referred to as fungible assets).

If the 30 day rule does apply - would it apply if you sold the gold and then repurchased it in a different domicile to the UK like the USA or Switzerland through the same company like Bullion Vault?

Yes; the asset purchased is identical to that sold.

And what if you sold physical gold and then bought physical silver in it's place? Is there a special capital gains treatment for this transaction?

30 day rule shouldn't apply and hence no special rules.

[collich]

"Securities" do not mean fungible assets. Securities are basically debts that are held as an investment and capable of giving rise to a profit (i.e. loan stock)

[maths]

Collich, not so.

S 106A TCGA 1992 contains the "30 day rule" relating to "securities".

S 104 defines the term "securities". More specifically subsection (3) provides that "securities" means:

"....and any other assets where they are of a nature to be dealt in without identifying the particular assets disposed of or acquired....".

In essence, assets which may not be separately identifiable.

The term "fungible assets" extends to, inter alia, shares, securities and foreign currency.

[collich]

I take it back

When I wrote that I didn't have access to the legislation. I have since read s.104(3) and seen that securities has a special definition for Part IV TCGA.

Very interesting - I hadn't appreciated this. Thank you

[section 44]

Same here, I hadn't apperciated the wide meaning of securities and that it would extend to investment gold.

[Fraser217]

If the 30 day rule does apply - would it apply if you sold the gold and then repurchased it in a different domicile to the UK like the USA or Switzerland through the same company like Bullion Vault?

Yes; the asset purchased is identical to that sold.

Is there the possibility that HMRC would want to treat gold on BullionVault separately for each of the vaults that BullionVault offer, ie put them in separate Section 104 pools for CGT purposes? For example on BullionVault we can buy gold stored in the London vault and gold stored in the Zurich vault. If these were in an amalgamated Section 104 pool then we could sell London gold one day and buy back the same amount of Zurich gold the next day (for generally very close to the same price) and thus obviate the '30 Day Rule' for CGT.

In TCGA92/S104(3) it says fungible assets should only go in the same Section 104 pool if they were to be treated as a single listing in the event that they were placed on a recognized stock exchange. However would that apply in this case?

BullionVault do actually have separate listings for London gold and Zurich gold on their live order board. The difference in price of the gold between the different vaults is generally very small, typically a 0.1% to 1% difference. Though in principle there is no reason why the price difference may not become much larger under certain circumstances. In the contract notes issued by BullionVault they always specify the vault from which the gold was purchased or sold, for example "Buy 0.098 kg @ 30,190 GBP/kg Fine gold kilos in London vault".

So the question is are these two more fungible than they are not fungible, and what view would HMRC take.

[bd6759]

Maths explained it clearly 13 years ago.

S104(3) does not say that.