Going for gold with your SIPP

1st July 2016

The Royal Mint is offering gold bars to SIPP investors

The rules on what investments can be held within a self-invested personal pension (SIPP) are simple: you can choose anything. However – and it is a very significant however – certain assets, such as art and residential property, are classed as “taxable property” and attract such large tax charges as to make them unviable.

One surprising specific exclusion from the list of taxable property is investment grade gold bullion – gold that is at least 99.5% pure and in the form of bars or wafers. Hitherto if you wanted to add gold to your SIPP – and your SIPP manager permitted such investments – purchases had to be made via bullion dealers. Now the Royal Mint has announced that some of its gold products (not coins) have been approved by HM Revenue & Customs as eligible for SIPP investment.

You, or more accurately, your SIPP provider, will not physically hold any gold purchased: it will remain in “The Vault”, a secure storage facility at the Royal Mint, at a cost of between 0.6% and 1.2% a year. That fee underlines one of the disadvantages of gold investment: not only does bullion not produce any income, but it incurs an ongoing cost for the investor.

Directly holding gold bars is not the only way to gain exposure to the movement in the gold price. Many professional investment managers now prefer to use funds which themselves hold physical gold. These funds offer economies of scale which can make them more cost- effective than direct ownership of the yellow metal. To learn more, please contact us.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.

Related Articles

Making a Will during COVID-19

Thinking about how well we are prepared for our futures As coronavirus (COVID-19) leaves many of us working from home surrounded by our families and loved ones, it is inevitable that we start to think about how well we are prepared for our futures.

Read more

Bank of Mum and Dad

Make sure you can afford it and understand any tax implications Parents have always supported their children in lots of different ways. These days, growing numbers of parents see their adult children struggling to build up enough in savings to put down the deposit on a house or to afford to move up from a first home to something larger – but does this mean parents should help financially?

Read more

Festive Financial Gifts

Deciding on the right investments for the children in your life As the festive season approaches, have you thought about gifting your children or grandchildren something different this Christmas? Giving them a good start in life by making investments into their future can make all the difference in today’s more complex world.

Read more