Some countries (such as the UK) do not charge capital gains tax on profits earned from buying and selling gold bullion coins. Out of every taxed profit earning commodity, why exempt gold in the shape of a coin?
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Have you googled the topic? The second link for example says it would be because these coins are legal currency.– NoDataDumpNoContributionCommented May 16 at 16:34
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1I realize the excuse. But still, the government could release the coins not as legal currency. After all, no one buys them based on the face value, rather based on the metal value.– HanMahCommented May 16 at 16:38
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Is the metal value higher than the face value? What are these values? And maybe there is only a limited supply?– NoDataDumpNoContributionCommented May 16 at 16:42
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Here's a $5 coin catalog.usmint.gov/… being sold for $800– HanMahCommented May 16 at 17:02
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Interesting, but the metal price seems to be only ~600 USD for 0.243 oz of gold. Maybe collectors items?– NoDataDumpNoContributionCommented May 16 at 17:07
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1 Answer
why exempt gold in the shape of a coin
Gold in the shape of a coin is not generally exempt from capital gains tax.
Coins minted by the Royal Mint as legal currency in the UK are exempt from capital gains tax in the UK.
But still, the government could release the coins not as legal currency.
Historically, many countries treated (and still treat) gold and silver differently since they represent a "raw" money value. They were the (real, claimed, or perceived) basis of legal currency. Your gains on selling gold against government currency were then considered as the government money losing value instead of you gaining value. Although this no longer applies to most countries, there remains favourable tax treatment due to the historic views.
But the continued modern practice, at least in the UK's case, is likely to just make products from the Royal Mint, a state-owned company, more attractive so that it generates a profit or relies less on government funding. It is comparable to the practice of many countries that give preferential tax or other treatment through various means to treasury/sovreign debts.
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2So it's just a way to subsidies a state owned business based with a historic concept that has been changed in every way except for to subsidies a state owned business? I guess it makes sense. I was hoping for a more logical reason, but politics aren't always logical. Thanks!– HanMahCommented May 17 at 4:02
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"Although this no longer applies to most countries" All of the net gain in the value of gold since 1979 has been from government money losing value. macrotrends.net/1333/historical-gold-prices-100-year-chart In 1920, gold was worth $21/pound. In 2024, it's worth $2,400. That's a factor of 115, of which 7.7 is real appreciation, and 15 is inflation. And the US has lower inflation than most countries. Government money losing value absolutely is the main cause of gold prices increasing. Commented May 21 at 2:43
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In contrast, in Germany gold is treated like other goods: privately selling (physical) gold has the same income tax implications (income type) as privately selling scrap metal. Or works of art. (BTW, income from renting/leasing out is also not capital gains, but its own type of income) Gold coins and buiilion are VAT exempt under certain conditions, though. But then, books have a different VAT rate from screws as well... Capital gains is the income type for certificates on gold, or on shares of a coin producer. Commented May 22 at 11:24