No, sadly you have to sell one metal, which is a tax event and you will also only get spot, and then buy gold and pay the extra premium on the new metal. Goldstackers do refund half the premiums you paid though.
Yep just as I expected. Flipping physical bars privately does sound like a PITA, but could be worth it depending on logistics. Anyone wanna swap a few kilos of silver for an ounce of gold???
Has anyone got an actual tax ruling on this though? As far as the tax department know (through your linked bank accounts), you transfer money into your PM account, and you transfer money back out, that's it. Is there a specific tax ruling that says movements of the money within that Perth Mint account are all individual tax events?
I'm serious though, I think it deserves a ruling. What if you traded in your PM account all the time? (say a hundred trades a year for arguments sake) and didn't sell exact amounts of what you bought in a previous trade. It would be almost impossible to reconcile all that. The best you could do is "$X went into the account, and $Y came out of the account". There are other aspects of the tax system where similar trade consolidation is a legitimate technique.
I did ask about straight swaps but because mine is in a SMSF no one wanted to be the test case, so the dealer sets the rules as to how the swap will occur and I can only think they got plenty of legal advice before hand and have avoided any grey areas which might have the potential to come back and bite them.
Oh well, that is the last of my unallocated gold swapped out to unallocated silver. I guess at a pinch I could swap out my 1 oz of physical gold, I would lose the premiums attached but if it goes up to 83 or 84 that won't hurt at all.
Interesting.. $500 goes in and 2kg of gold comes out Still no tax events... No law against getting a bargain is there? Actually what you say makes sense, if I pictured that side of it at all, it was as pretty much a black box. Reconciling and untangling dozens of trades is a hassle I hadn't envisaged.
I think if you can get away with saying that you own precious metals, without ever saying what type of precious metals you have then you might get away with it. I have silver bars, silver coins, silver rounds and unallocated silver but they are all just lumped in as silver ounces in my spreadsheet. If I sell a high premium coin and replace it with a low premium bar I still have the same amount and type of metal. I would do this with my personal stack but I wouldn't bother with the SMSF, too many regulations. You are also not allowed to buy silver at $20, sell it at $15, immediately buy it back at $15 and record a $5 loss on your tax return. There are offices full of government officials who spend all day catching up with loopholes and shutting them down, I do not have my finger on the pulse of high finance so I would get tripped up soon enough.
If I was doing hundreds of internal trades like that within my PM account, then I most certainly would simplify the whole thing and simply tell the tax department that $X went in and $Y come out. I think it's a perfectly reasonable position you could defend. If they audit you and want to fuss over every single detail of every trade and the percentages bought sold relative to time held and averaged etc, then let them do the calculations. Generally the tax department only care about if you are ripping them off or rorting or gaming the system etc. If you can show that there are reasonable grounds to simply it as money in and money out, and you aren't hiding anything, then I suspect they'd be ok with that. But hey, in the end only an individual tax ruling matters.
If you use AUX and AUG to denominate the holdings would it be treated as a foreign exchange type of transaction?
Fascinating thread. If you were to trade one metal for another (physical for physical) a transaction that yields no profit, then from a taxation point of view, there is nothing to report? Your ledger would record the trade and the new metal holdings of equivalent value between metals based on the spot price of each at the same time slice. If this was documented and witnessed then I wonder how the ATO would view this. The bullion banks do it all the time don't they?
If it was a foreign exchange, then you can elect to claim the under $250,000 threshold for capital gains. I'm not sure that works in practice though. https://www.ato.gov.au/Business/Forex/In-detail/Overview/Foreign-exchange-(forex)--overview/
I can't see why they would have a problem with it, provided you aren't trying to hide or evade anything. The only issue I can see is if come the end of the tax period (30th June) and you've done transactions within your PM account that have technically made a profit and you don't report that profit in that same years tax return. But for example, if you transferred money into a PM account on 1st July, played with it to your hearts content trading every dip and peak etc) and then sold it all and withdrew it from your PM account in that same year, then I can't see why you couldn't just put down your final figure as either a gain or loss. In fact, that's all you can send to the ATO, a final figure. Everyone does this on their personal tax return every year, were you only have the show the final figure for all sorts of stuff, that's all they care about, the "working data" in your etax system isn't even sent to the tax department. Surely this is no different?
And if you don't withdraw dollars, but bullion??? As I said above, say $500 goes in and 2kg of gold comes out... what then? OK I'm being a little optimistic but you get the point
Unfortunately unallocated providers don't seem to offer this option, likely for their own taxation/reporting reasons.. Consenting adults, on the other hand...
If you put $500 in and you don't do anything else, and out pops 2kg of gold because, you know, the moon, then you haven't sold the gold, therefore you have not made a capital gain. Just like buying shares and they go to the moon, it's not a capital gain until you sell them. But of course the interesting point is can you "cash out" gold instead of cash? That's one hairy question. If you put money into unallocated and then "cash out" with a physical brick, then I don't think you have actually cashed out, and in that case it wouldn't be a CGT event.
The problem with the PM depository (and other programs I've used, like BullionCapital) is that each time you trade it gets converted into cash in your account. So as far as the tax man is concerned, that's a capital gains tax event. Just because it's not visible to them doesn't make it less of a CGT event.
I guess it would then become barter, which is subject to tax: https://www.ato.gov.au/Business/GST...-transactions/Bartering-and-barter-exchanges/ They don't say anything about CGT though. So like that guy who traded a red paperclip for a house, it's probably not CGT liable?
