cheap coin insuranc

Discussion in 'Superannuation' started by charlief1, Jan 7, 2013.

  1. charlief1

    charlief1 New Member

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    Hi All,
    Im going to buy silver coins and just leave them in a safety deposit box to comply with ato's as they are "collectibles" ...

    Im struggling to find someone who can provide insurance? (more compliance).

    Its a small amount of coins, no more than 15k. Any ideas or recommendations on who can insure such a thing that wont cost an arm and a leg?
     
  2. Banga

    Banga New Member

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    Won't need insurance if they are bullion coins.
     
  3. charlief1

    charlief1 New Member

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    Thanks, yeah I know but they are not, im going for silver 50's etc. For my research, they are the most liquid and recognisable. Perhaps others might have an opinion on that im not sure what the most liquid silver bullion coin is?
     
  4. Banga

    Banga New Member

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    50's are traded for silver value by the kg so are called junk bullion. That is unless you have individual valuable uncirculated coins that trade at a premium to their silver content, they would be regarded as collectible. Otherwise they are bullion.
     
  5. charlief1

    charlief1 New Member

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    thanks, perfect. im reading too much into the ato and their face value vs real value comments perhaps
     
  6. Banga

    Banga New Member

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    Yeah nerve racking dealing with that mob. Bullion coins includes any coin that trades for its content at spot plus the trading premium. So that includes junk 50s, pre decimal, sovereigns that aren't collectible, and the latest kooks, eagles etc. Some stackers value limited runs of bullion coins and trade them at premiums but they are still bullion coins in the eyes of the ATO. One ounce is the same as another to me.
     
  7. charlief1

    charlief1 New Member

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    Thanks you have been very helpful. I was looking at this in the same way but searching this forum, a few discussions have sort of dropped with no resolution.
    The way i figured it, it was a $1100 fine for non compliance. I was looking to balance that against cost of storage and insurance and see what my chances where.

    I take it gst wont be applied to a few kilos of silver 50's?
     
  8. Banga

    Banga New Member

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    Yep no GST because they are still currency. You can pick them up sometimes on this forum but thy are hot.
     
  9. goldpelican

    goldpelican Administrator Staff Member

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    Please show the legislation where there is no GST on coins because they are still currency.
     
  10. charlief1

    charlief1 New Member

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    Beauty.
     
  11. Au-mageddon

    Au-mageddon Active Member

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    Agreed.

    My belief was anything that is not classed as a precious metal ie < 99.9% Silver or < 99.99% gold would be subject to gst.
    I would expect this would include any pre-decimal coins, including 1966 50s.
     
  12. charlief1

    charlief1 New Member

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    ok so coins such as 50's are highly liquid.
    Trade off is they appear to attract gst, i need to store and insure them as they are classified as collectible.

    Does anyone have a bullion suggestion, no larger than an ounce, fits the liquidity desire and trading at or near spot?
     
  13. Banga

    Banga New Member

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    I have asked a couple of bullion dealers in the past about GST because they are quick to tell you it is chargeable on sovs. There is confusion as this extract from a thread from Goldpelican on 2010-07-08 shows:

    Thought it was time this was made a sticky for once and for all.
    This post does not contain taxation advice - if in doubt, contact the Australian Tax Office or an accountant.
    This post is under discussion below, and the contents may be updated over time to reflect corrections etc.
    From indirect tax - exemptions gst:
    Section 40-100 in the GST Act, in conjunction with paragraph 13-10(b) in that Act, provides an exemption for precious metals.
    The term 'precious metal' is defined in section 195-1 of the A New Tax System (Goods and Services Tax) Act 1999 (the GST Act). The section provides that 'precious metal' is:
    1. gold (in an investment form) of at least 99.5% fineness; or
    2. silver (in an investment form) of at least 99.9% fineness; or
    3. platinum (in an investment form) of at least 99% fineness; or
    4. any other substance (in an investment form) specified in the regulations of a particular fineness specified in the regulations.
    There are three components to this definition.
    * Firstly, the substance must be gold, silver, platinum, or specified in the regulations.
    * Secondly, the substance must be of at least the specified fineness.
    * Thirdly, the substance must be in an investment form.
    No regulations have been made to specify any substance other than gold, silver or platinum. To be precious metal for the purposes of GST, the metal must therefore be gold, silver or platinum.
    The requisite fineness is clear from the definition.
    From Goods and Services Tax: What is 'precious metal' for the purposes of GST? (GSTR 2003/10)
    7. The first supply of precious metal after its refining may be GST-free under section 38-385. Apart from transactions that fall within the ambit of section 38-385 (or section 38-185, which is about exported goods), supplies of precious metal are input taxed under section 40-100.
    8. Precious metal is defined in section 195-1 as follows:
    precious metal means:
    (a) gold (in an investment form) of at least 99.5% fineness; or
    (b) silver (in an investment form) of at least 99.9% fineness; or
    (c) platinum (in an investment form) of at least 99% fineness; or
    (d) any other substance (in an investment form) specified in the regulations of a particular fineness specified in the regulations.
    9. No regulations have been made to specify any other substance. To be precious metal for GST purposes, the metal must therefore be gold, silver or platinum.
    ...
    29. To summarise the above, for gold, silver or platinum to be in an investment form for the purposes of the GST Act, it must be in a form that:

    - is capable of being traded on the international bullion market, that is, it must be a bar, wafer or coin;
    - bears a mark or characteristic accepted as identifying and guaranteeing its fineness and quality; and
    - is usually traded at a price that is determined by reference to the spot price of the metal it contains.
    What does this mean?
    In order to be "GST free" (more correctly, treated as input-taxed for GST purposes), precious metal must meet the above purities, and qualify as an investment form. Examples of investment forms are bullion bars, and legal tender bullion-quality or specimen-quality coins. Proof coins do NOT qualify as an investment form, and should be liable for GST to be collected. Palladium is not classed as a precious metal for GST purposes, and is therefore also liable for GST, regardless of form.
    Examples of "GST free" silver in Australia:
    * silver bars that are at least 99.9% fine
    * silver bullion grade Kookaburra/Koala/Lunar coins from the Perth Mint
    * some imported silver coins such as Canadian Maples, American Silver Eagles and Austrian Philharmonics
    Examples of silver that SHOULD attract GST in Australia:
    * Numismatic proof issue silver coins from the Perth Mint or RAM: non-investment form of silver
    * UK Brittanias: 92.5% (sterling)
    * $10 Australian coins such as State series: 92.5% (sterling), and non-circulating legal tender
    The GST status of the 1966 50c coin is not clear to the author at this point in time:
    * it is still legal circulating tender, and may be GST free
    * it does not meet the definition of an "investment form" of silver, and may be GST liable
    * it is the opinion of the author that this coin should be GST free, as it is legal circulating tender issued for circulation, however I have not seen a ruling to this effect
    Examples of "GST free" gold in Australia:
    * gold cast and minted bars that are at least 99.5% fine
    * gold bullion grade Kangaroo/Lunar coins from the Perth Mint
    * some imported gold coins such as Canadian Maples
    Examples of gold that SHOULD attract GST in Australia:
    * Numismatic proof issue gold coins from the Perth Mint or RAM: non-investment form of gold
    * Sovereigns: 91.67% (22k)
    * Krugerrands: 91.67% (22k)
    * American Gold Eagles: 91.67% (22k)
    * $200 10 gram Australian coins such as Koalas: 91.67% (22k) and non-circulating legal tender
     
  14. errol43

    errol43 New Member Silver Stacker

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    Charlief1... what about $10 state coins...Legal tender at $10 each...you can then count them as cash savings. .6 oz silver in each one and can be bought at around spot.

    Regards Errol 43
     
  15. charlief1

    charlief1 New Member

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    Ok Thanks, thats very interesting. Working with KJc's website.
    https://www.kjc-gold-silver-bullion.com.au/PD/1kg-lot-of---$10-sterling-silver-coins-(50-coins)/439
    = about $1.13 AUD per gram of silver.

    https://www.kjc-gold-silver-bullion...-australian-50-cent-silver-rounds--80-25-/292
    = about $1.12 AUD per gram of silver.

    Nothing in it. But are these a numismatic or a bullion product?
    Trying to make sense of the ATO, paying above face value for a coin = numismatic. Buying bullion needs to be 99% pure.
    What a headache.
     

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