SMSF: swapping silver for gold ???

I have heard two viewpoints on this:

1. you have to treat the swap as a full-on sale of the silver first and foremost and therfore pay tax on the so-called "paper profit" made, and then with what's left over you can buy your gold. Not much of a "swap" if you ask me!

2. Somewhere i read that one can under certain circumstances swap out silver for gold (or vice versa) if the idea behind the swap is to facilitate ease/cost of storage etc..

I mean if one looks at this objectively there really should be no tax payable on this kind of swap out... can anybody comment about this and give me some guidance here?

thanks

 

I swapped some gold for silver this year but I am going to sell the gold I bought at $1600/oz so on paper I should have a $ loss more than anything, but a silver gain.

It was unallocated swap through Goldstackers though so I will have to check what the process was because they may have looked into it in more detail.

 

Any other experiences?

 

Think of it as having two (2) assets in your SMSF such as a Ford GTHO and a Ferrari 246.

Both are valuable; both vehicles and worth similar amounts.

Now ask yourself, if the ATO would let you swap the Ford for another Ferrari or vis versa, without penalty?

 

Most other countries - including the US - would, but the ATO is notoriously narrow minded when it comes to this kind of thing.

 

I don't think the ATO would count swapsies as a financial tool.

It might be worth looking into whether you might be able to classify both your gold and silver holdings as "precious metal holdings" and value it in a dollar amount. That way you can swap all you want as you will still have a dollar amount of PMs which may be higher or lower than the one you started with.

 

I have yet to hear of somebody having the blessing of the tax department or an accountant when it comes to doing a GSR trade of physical inside their SMSF structure or alternatively a bonafide gold/silver valued swap without sales receipts.
Without actually using a bullion dealer as an intermediary to provide a truly independent valuation I can foresee a multitude of questions that would have answers open to interpretation.
If the tax departments interpretation is different from your own what a headache maker.
But I would love to hear a solid plan regarding this topic
REDBACK

 

Unallocated swaps through a dealer might be easier to do. Set premiums, fewer costs associated, more credability.

 

A good analogy is to image you have 1 parcel of shares in your SMSF - do you think you could swap that share for a different share without selling the ones held and then using the funds to purchase the other?

That is not possible. It is a disposal of one asset and purchase of another with all of the tax implications attached.