Pay in silver?

Tossing around the idea of getting some pay in silver.If say i clear $650 a week, would it be possible to get a 10oz coin (eg dragon $10 presume they're legal tender) and $300 fiat.My idea is I'll have a lot lower taxable income as in I'll clear $310 a week.Thoughts anyone.My payer will do it if its legal.Cheers

 

I put it to an account once ,
She liked the idea
But she said NO

 

Gotcha, thanks for quick replies.Out of interest could i deposit a 10 oz dragon into my bank and get $10?(not that I would)

 

Its a pity i cant be paid in silver, but then with less tax paid by myself and countless others who would do this, how would our pollies be able to get pay rises.It wouldnt be fair on them

 

Based on the research I did for BB in the recent Political Policy thread, there doesn't seem to be any restriction on being paid in whatever currency you choose - including silver and gold. Hence it is totally legal.

However, as GP said, if the purpose is to avoid income tax then even though you are being paid in Aussie legal tender I think they'll apply the same policy as though you were being paid in a foreign currency. Hence, the income tax will be calculated based on the exchange rates applicable at the time the income was received or derived - i.e. the prevailing silver/gold price. They'll probably have to make a determination to decide on exactly which prices etc to use but at the end of the day you probably won't be any better off (and will have the hassle cost of having to deal with the ATO on a matter that would probably piss them off).

Edit: The biggest catch will be how the business treats the expense and if their treatment is different to the PAYG treatment of your income.

 

I remember that, that guy was a legend.

 

A legend but also one in a lot of trouble...
http://www.rapidtrends.com/robert-kahre-vs-the-irs-and-doj/

In fairness, he paid workers $114m and expected to get away with it!

 

Surely the only purpose is to avoid income tax - why all the 'ifs'?

 

So it I deposit a Perth Mint 1oz kook in the bank for me its worth $1, but if my employer puts in the same for me its worth spot to the tax man? Doesn't sound correct???

after a rethink, the bank will never give a kook when doing a withdrawal, silly me

 

The rules are always written in favour of the rule makers
That's why if you play they're game , you will always lose
Unless you play by your own rules

 

What if it's not designed to avoid tax, but you just prefer face value bullion coins over fiat?

 

Then it's totally legal but your liability would be calculated on its A$ equivalent value.

IMHO the complication arises because of the Australian legal tender aspect. If you were simply paid in bullion then simple pimple and all legal and above board. But if you are being paid in Perth Mint coins with an A$ legal tender value substantially different to its A$ value then that's where it gets murky and the ATO would accuse people of setting up a scheme for tax avoidance purposes.

Edit: Oh, and as per forum rules, absolutely no taxation advice is being provided here (just a personal interpretation of the law).

 

If you were self employed sole trader (all your assests belong to business & personal) and received a lot of cash as payment. You could easily pay yourself whatever you wanted to declare and purchase silver with the rest... So long as your didnt go crazy beyond your perceived income lifestyle and didnt tell anyone..

But if you got auditted you could be screwed....

 

I found this when I to was researching this, the following is a Court Case

Paid in sovereigns

The gold sovereign is still legal tender for 1. Although you can legally pay a debt of 1 with a
gold sovereign, you would be daft to do so as they are worth much more.

However this triggered an idea in the mind of Mr Chandler. He was a director of St James Plates Ltd, which made plates for the printing industry and is still in business.
He employed Philip Jenkins at a wage of between 29.50 and 65.02 a week in 1976/77. They agreed that they would reduce his wage to between 1 and 4 a week but pay him in gold sovereigns. Because his wages were so much lower, they fell below the tax threshold, so no tax was paid. Jenkins then sold the sovereigns and got an amount that equalled his normal wages.
It was argued that the sale of the sovereigns was not taxable as it was a capital gain and not income, and so qualified for another allowance for capital gains tax. Inland Revenue said that the tax was due on the real value of the sovereigns and not their legal tender value.

The High Court agreed. Under tax law, the profits of employment are taxable as wages. This included profits from selling gold coins in which the wages have been paid.
So the case was dismissed with costs. Mr Jenkins had to pay a statutory fee to the court. He gave them a sovereign.

Jenkins v Horn. Ch D [1970] 52 TC 591.

 

And Also have a read of this case CUSACK V FC of T (2002 ATC 4678),

Mainly these parts,

16. Australian currency, whether notes or coin, including gold coin, when being used as legal tender to discharge monetary obligations is valued at its face value without regard to its intrinsic worth, if any, and without regard to any applicable issue price determined pursuant to s 14A of the CA. There is thus only one value of gold coins when used as currency and that is the face value of the coin. The contention that there are two forms of Australian currency with different values is fallacious. Gold and other coins made of ``noble'' metal only have a value different to the face value of the coin when the coin is not being used as currency for any purpose and is regarded simply as a commodity.

&

20. The issue price or inherent value of ``noble'' metal coins issued under authority of s 14 of the CA is irrelevant for the purposes of the ITAA unless the coins themselves are used, not as currency as legal tender to discharge a monetary obligation, but, as commodities or objects of exchange. When used as commodities, such coins have a value which is ascertainable in the market for such commodities. That value is measured and expressed in monetary units which in Australian currency are called dollars. The value may or may not be different to the face value of the coins, depending upon the interaction of supply and demand in that market: see for example, the discussion of the treatment of gold coins as commodities, as opposed to currency, in
Treseder-Griffin v Co-Operative Insurance Society Ltd [1956] 2 QB 127 at 146ff (CA).

21. Where the income of a taxpayer is earned by the receipt of ``noble'' metal coins as commodities, the intrinsic or market value of the coins as income is to be expressed for the purposes of the ITAA in terms of Australian currency. That is, the value of the coins is to be expressed in monetary units of Australian currency as provided for in s 8 of the CA: s 21(1) ITAA;
Californian Copper Syndicate Ltd v Harris (1904) 5 TC 159; FC of T v Energy Resources at ATC 4949; FCR 61. The taxpayer is not to be assessed to taxation on the nominal value of the coins as currency: in this respect there is no difference in approach under the ITAA and under the Income and Corporation Taxes Act 1970 (UK) in respect of which a similar argument to that made by the applicant on this application was rejected in
Jenkins v Horn (Inspector of Taxes) [1979] 2 All ER 1141.

 

^ The third last line seems contradictory but probably because it's in legalese.

Edit: of your first post i mean. The second one seems pretty clear. Good finds.

 

Would have thought the coins would be counted as face value, after all that's what the gov set the tender at!!

Interesting idea none the less...