Selling Gold and the Tax Man: What You Didn’t Know

Oct 27

Gold is typically considered a safe investment, but did you know that the precious metal actually falls into a higher tax bracket?

Paying Taxes For Gold Transactions

Gold is typically understood as a very safe investment. Like clockwork, its value climbs up the charts in times of economic uncertainty, and its value drops low enough to buy it in large hordes in times of economic bliss.

In a pinch, regular folks sell scrap gold at the best prices when they need to liquidate their gold assets fast –and they buy it when the going is good.

On a larger scale, gold is bought and sold on the stock market and many traders have made their fortune selling the precious metal, even if their skill and understanding of the stock market is not the very best. Gold is an excellent entry-level trade for beginners and professionals alike; even Warren Buffet likes to trade it.

But for those less experienced, there is one aspect of buying and selling gold that is often overlooked; the tax man.

Gold is Taxable

Gold and taxes go together like Love and Marriage, as in many countries the various tax authorities put the precious metal gold in the same category as other collectables like antiques and art. This designation applies to gold bullion, rare and commemorative coins, and even certificate “paper” forms of gold such as Perth Mint Certificates.

Gold is Bureaucratic

In addition to that, your friendly neighbourhood government behemoth also makes reporting these taxes a convoluted process. I’m still unsure whether it’s to obfuscate the fact that we’re obligated to pay Caesar for our own gold or to wear us down with bureaucracy; in either case it is often a nuisance.

Reporting requirements of gold also places the responsibility on the gold seller to keep their government in the know –meaning you and not the business you might be selling it to. Precious metal dealers are not necessarily required to report smaller amounts of gold to the authorities.

Gold is Affected by Anti-Terror Laws

Yup. If you’re just a regular Joe trying to dodge the tax man, it does not do you any good to ask your gold dealer to sell your gold in smaller denominations to avoid reporting it to the government. This would be considered “suspicious activity” according to modern anti-terror laws and where your dealer might be willing to help out in this way in the past; today the process of breaking down into smaller denominations for a series of smaller sales to avoid reporting is a no-no. All Western governments want to know exactly where everyone’s money comes from, so gold isn’t necessarily an “untraceable” asset because sooner or later, it will need to surface.

At the end of the day, this one is likely to do little harm to the average person. And those taxes usually come off the cream from large gold transactions, not smaller ones that might be made at your local pawn shop.

Gold Jewellery is Not Reportable

Ah-ha! Now we’re talking. With all of this depressing talk about gold and taxes I bet you thought we were referring to gold jewellery, too. We figured we’d start with the bad news first and then finish you off with a happy ending.

As a result of gold jewellery sales not being reportable, buying up or selling off gold jewellery could make for a clean diversification manoeuvre. Or it could just help you out in a bind. Personally, I’ve bought and sold gold in Australia from a little known website ( and it’s worked well for me.

How about your experience buying and selling gold? Any gold tips for beginners? If so, we would love to hear them. Leave a comment below and show off your knowledge nuggets.