Paying income tax on silver sales

B

BootyBandit

New Member
If you buy silver and then resell it do you have to pay income tax? if your selling over 1kg ect.. but not frequently like say 20kg per year ($20 profit on each bar)
 
Apologies GP. Comment edited.

A little perplexed we have to pretend this isn't the case for most transactions. It is widely advertised on other threads that a private PM sale has it's "advantages". :/
 
Most accountants would advise that the sale of bullion is a capital gains event - either a gain or loss.

Posting comments like the one above on a public forum does *not* help - it puts the wrong attention on the forum.
 
If you can hold onto the bullion for more than 12 months prior to sale, I am of the understanding the CGT is lowered significantly
 
If you hold it for 12 months is 50% reduction in CGT just like a house sale after 12 months. Which is a good saving.
 
I figuer u would have to pay income tax when u make a certain amount on it? because its generating an income, wouldnt u have to pay 48% in the dollar of profit?
After talking about this with my workmate stackers and my accountant... its come to the conclusion that i opened a company with a trust just for tax purposes.
My work mate suggested i open a company like he did ( hes older then me, in his say mid 40s) for the fact the company tax rate is 28 or 27%, something around that margin.
My accountant (who works for BHP and has for other big players here in Perth) futher suggested opening the trust linked to the company, so when it comes time to sell,
it can be distributed evenly across the company and trust ( the trust being untaxed).... collectively meaning overall im taxed at 15%
sooo if i made lets say $1 million profit on my bullion
A) taxed at my personal rate = 480k taxed of 1 mil
B) taxed at my company rate = 280k taxed of 1 mil
C) taxed at my company with linked trust rate = 150k of 1 mil


thats how its been explained to me...
 
Silverbullet08 said:
I figuer u would have to pay income tax when u make a certain amount on it? because its generating an income, wouldnt u have to pay 48% in the dollar of profit?
After talking about this with my workmate stackers and my accountant... its come to the conclusion that i opened a company with a trust just for tax purposes.
My work mate suggested i open a company like he did ( hes older then me, in his say mid 40s) for the fact the company tax rate is 28 or 27%, something around that margin.
My accountant (who works for BHP and has for other big players here in Perth) futher suggested opening the trust linked to the company, so when it comes time to sell,
it can be distributed evenly across the company and trust ( the trust being untaxed).... collectively meaning overall im taxed at 15%
sooo if i made lets say $1 million profit on my bullion
A) taxed at my personal rate = 480k taxed of 1 mil
B) taxed at my company rate = 280k taxed of 1 mil
C) taxed at my company with linked trust rate = 150k of 1 mil


thats how its been explained to me...
Click to expand...

I'd like to hear more about this if something like this is possible/legal?

I was also under the impression that it is CGT not income tax.

Has anyone set up a system like this before?
 
Silverbullet -

The increase in value on the silver would be taxed at Capital Gains Tax rates not Income tax rates
 
Hey im not sure if it would come under income or CGT , because the year that u sell it in would be defined as a source of income would it not?
My accountant has been a good friend of mine for many years now, and this is simply what she has advised me to do.... also the company is to start my E*TRADER account too... and eventually industrial\commerical properties.
like i said, my workmate has alot of bullion and 14 properties and does it all in his companies name, my accountant suggested i get the trust to.
Im still having my eyes opened as im still new to all this... and looks to be working for my best interest.

ATM im having my current bullion transfered into my companies\trusts name.... and from now on only buying in its name.


Dr.GOLD : no its not illegal , as my accountant wouldnt do anything remotely risky like that, we both have too much to lose... she just knows alot of loop holes with tax work... and has done many various sports stars (AFL and others)


perhaps have a more indepth chat with ur accountant to come up with a stratergy for urself.
 
Silverbullet08 said:
Hey im not sure if it would come under income or CGT , because the year that u sell it in would be defined as a source of income would it not?
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If you are trading ie buying and selling silver/gold as a source of income the profit (loss) should be treated as income and taxed as such.

If you are buying as an investment (same as an investment property or shares) the profit (loss) should be treated as a Capital Gain (loss) and taxed as such.
 
I would love to see that retested - I think it predates the introduction of CGT. Would be *fantastic* if it were held up.
 
This is the bit I like - "The applicant bought 2 kg of gold on 10 May 1978 for $9,989.00. "
 
Silverbullet - Not doubting your accountant's advice, but there are many errors in your postings

BootyBandit - I'd suggest taking taxation advice from a public forum may not be such a great idea
 
So how would it work if say you bought for example 10 peices of silver at different times over a couple of years lets say ranging in price from $20 - $40. The price dips and you sell a peice for whatever reason. If there is no way of telling each peice apart is there any rules on what you report. Do you treat each peice as an average price or at individual purchase price for each peice?
 
metalzzz said:
So how would it work if say you bought for example 10 peices of silver at different times over a couple of years lets say ranging in price from $20 - $40. The price dips and you sell a peice for whatever reason. If there is no way of telling each peice apart is there any rules on what you report. Do you treat each peice as an average price or at individual purchase price for each peice?
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Can depend on what form the pieces are.
If they are collectable coins, you might be able to consider each piece a personal collectable under the value of $500, in which case they would not be subject to CGT :).

Now what exactly constitutes a collectable ? ... that's an interesting question.....
A silver proof coin in a box with coa? .... what about a 1oz koala in a capsule?... 1oz dragon ?
.... perhaps some might argue some old 10oz silver bars are collectables...


I am not an accountant so I really have no idea what I'm talking about - just relating some info available on the ato website
 
metalzzz said:
So how would it work if say you bought for example 10 peices of silver at different times over a couple of years lets say ranging in price from $20 - $40. The price dips and you sell a peice for whatever reason. If there is no way of telling each peice apart is there any rules on what you report. Do you treat each peice as an average price or at individual purchase price for each peice?
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if you are carrying on a business then it would depend on which inventory costing method you are using.... fifo, avg cost etc... so you could choose which method you are going to use etc.
 
trew said:
Silverbullet - Not doubting your accountant's advice, but there are many errors in your postings

BootyBandit - I'd suggest taking taxation advice from a public forum may not be such a great idea
Click to expand...


Yes I was expecting that, that's pretty much the just of the terms I could understand as she was throwing her detailed accounting jargon over my head lol :)
I am just a simple tradie haha
 
Silverbullet08 said:
Yes I was expecting that, that's pretty much the just of the terms I could understand as she was throwing her detailed accounting jargon over my head lol :)
I am just a simple tradie haha
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I suggest you get your accountant to explain more clearly to you why you are doing all of this.

The company tax rate is 30% (not 28%), but companies are not able to halve the tax for capital gains of assets held more than 12 months.
So if you trade in and out, you are better off paying 30% rather than 48%, but if you hold for more than 12 months, the company still pays 30% but you personally you would pay 24% at most.

I really don't know much about trusts so won't comment - although I once knew a guy who said his accountant included his dog and his cat in his trust :)
 
Silverbullet08 said:
Yes I was expecting that, that's pretty much the just of the terms I could understand as she was throwing her detailed accounting jargon over my head lol :)
I am just a simple tradie haha
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Mate, as trew said, if you cannot understand what she is telling you, you need to ask her to explain it, as many times as needed, until you do understand it.... It's your money, not hers, and the penalties from the Tax office if there's a mistake or misunderstanding fall on you not her.

You owe it to yourself to learn what you can, and have her explain everything to you in terms you understand. If she cant, then much as she's a friend or whatever maybe another accountant is best, or at least get a second opinion from someone who can explain, in terms you can understand, what her strategy is.
 
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