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2.7 Record keeping requirements for dealers in investment gold coins
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Guidance on correcting errors is in Notice 700/45: how to correct VAT errors and make adjustments or claims.įurther guidance on the Margin Scheme is in The Margin and Global Accounting Scheme (VAT Notice 718). You must also deduct the value you have attributed to the items from your Global Accounting purchase record. If you’ve included the coins in Global Accounting purchases, remove the items from the scheme and adjust the total purchases in the period.
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If you’ve mistakenly included investment gold coins as purchases in Margin Scheme stock records, delete the entry and note it accordingly. You cannot sell investment gold coins (see paragraph 2.1) under the Margin Scheme. 2.6 Investment gold coins and the Margin Scheme The test of normal selling price must take into account these factors and be based on the condition in which the gold coin type is most frequently traded. On the other hand, if the majority of a particular coin are in ‘proof’ condition, then the value of the proof coin is more likely to reflect the normal selling price. These may have been issued in a number of finishes and if the majority of a type of coin are in for example ‘brilliant uncirculated’ condition then, other things being equal, the brilliant uncirculated value will reflect the normal selling price. The second, generally more recent, are primarily produced as a store of wealth. These will normally be worn from circulation. The first consists of relatively older issues made to circulate as currency. Investment gold coins fall into 2 broad classes. The finish influences the normal selling price of coins. 2.5 Conditions affecting the normal selling price Similarly, if a coin type is usually valued at more than 180% of the gold value, because of its interest to collectors, but an individual coin is in such poor condition that it is worth less than 180% of its gold value, that coin (like others of its type), will be subject to VAT at the standard rate. It does not matter that an individual coin is of special interest to collectors, if the usual price of the coin type falls within 180% of the value of the gold contained therein, all coins of that type will be exempt. This is the price that can most usually be demanded for a particular type of coin. For this reason, exemption depends on the normal selling price. Administration of the exemption would become burdensome for traders and HMRC alike. If exemption depended on the actual selling price of an individual coin this would lead to inconsistency. Of the 3 criteria in paragraph 2.1a, only the selling price of the coin is subjective.Ĭoins are minted in various finishes and will be sold at a variety of prices. So, a gold coin type may be a single issue for one year, or have been produced for almost 2 centuries, as in the case of the British sovereign. This is because changes of superficial design do not alter the gold coin type or description. The definition for VAT purposes is wider than the one which coin experts (numismatists) normally use. 2.2 Coin typesĪll gold coins that have the same denomination (face value), size and gold fineness as those described at paragraph 2.1 and section 3, are exempt from VAT. You should treat coins that do not fall within 2.1a. But you must be able to show from your business records that any such coin meets the criteria. A gold coin on the lists in section 3.Ī coin not on the lists can still be exempt from VAT if it falls within the description at 2.1a. is of a description of coin that is normally sold at a price that does not exceed 180% of the open market value of the gold contained in the coinī.is, or has been, legal tender in its country of origin.is of a purity of not less than 900 thousandths.Investment gold coins 2.1 Definition of an investment gold coin Traders dealing in investment gold coins. You should read this notice alongside Gold acquisitions, imports and investments (VAT Notice 701/21) which gives further information about dealing in gold coins. provides a revised list of investment gold coins whose supply is exempt from VAT (in section 3) - readers are advised that, because there are several changes from previous lists, they should refer directly to the lists for qualifying coins.explains that an investment gold coin is exempt from VAT and explains which coins can be considered as investment gold coins (see section 2).Details of any changes to the previous version can be found in paragraph 1.1. This notice cancels and replaces Notice 701/21A (February 2011).