The possession of precious metals such as toronto gold, silver, platinum, palladium and titanium in their forms such as investment coins, ingots, rare coins and ingots is subject to the capital gains taxation. Gains on most other assets held longer than a year are also subject to a longer-term capital return rate of 15-20%. This applies not only to gold coins and bullion, but also to most exchange traded funds (ETFs), which are taxed at 28%.
On the sale of such holdings, when held for more than one year, capital gains tax is payable. Many tradeable financial securities such as stocks, mutual funds and ETFs are subject to both short- and long-term capital gains tax, but sales of physical precious metals are only once taxed. This applies regardless of whether you inherit gold, receive it as a gift from a blood relative, or sell it, and must pay capital gains tax on any gains.
Let us understand how the capital gains tax is calculated in the case of inheritances or gold gifts. Gold can be held in physical form in the form of jewelry, coins, ingots and others.
Precious metals in the form of ingots, ingots and wafers with the required degree of purity are recognised and accepted on the Canadian financial markets. The supply of precious metals (gold, platinum and silver) which meet the purity requirements of the definition of a precious metal in paragraph 1.3.2.3 paragraph 1) and the supply of financial services are excluded. Investments in metal quality in connection with buying and selling on international stock exchanges lead to worldwide precious metal prices.
Sales of gold, platinum and silver in ingot form, ingot, coin or wafer with a purity of less than 99.5% gold (platinum) or less than 999% silver are taxed at 7% and 15%, respectively. The sale of these metals in defined purity levels, but not in the form of ingots, ingots, coins, wafers or granules, is subject to taxation of 7% or 15%.
Taxes may be levied on palladium products, copper products, numismatic coins, retail prices in excess of $1,000, accessories and processed items. Silver, platinum and palladium ingots as well as coins that are legal tenders incur sales taxes, but are exempt from sales tax if shipped to an address in Iowa.
Taxes may be levied on coins whose gold or silver content is not recognised as a means of exchange or means of payment (taxes on platinum, palladium, copper or gold and silver ingots) if these ingots do not have a stamp or imprint on their weight, purity, accessories or processed objects.
The sale of gold bullion can trigger a capital gains loss in the eyes of the Canadian tax authority. This could lead to a hefty tax burden, even if an investor manages to get the market to appreciate the value of his gold significantly. Ultimately, Black says, it makes more sense to invest in a gold mining company than to buy and store a gold bar.
In fact, all the gold, silver and platinum bullion coins produced by the Royal Mint are classified as CGT-free investments, including Gold and Silver coins.
This is certainly not an unreasonable amount, but it is a reduction in the meagre returns that investors earn with gold. For example, owning a PFIC saves investors 40% in taxes.
This could lead to a hefty tax burden, even if an investor manages to get the market to appreciate the value of his gold significantly.
At its core, the issue is not whether gold, silver or any precious metal should be considered an investment or currency, but rather whether it should be any other physical property, such as clothing, cars, furniture, etc.