How to Protect Gold from Potential Government Intrusion

Learn How to Protect Gold from the sticky hands of government

Image by Bullion Vault via Flickr

Most would agree that one’s financial affairs ought to be your own concern and not that of the government but sadly this is not the case. Certain laws surround the buying and selling of gold, some are designed to protect national interests by limiting the circulation of unregulated funds around the world. Others do little more than fill the government’s coffers with even more of your hard earned money by taxing your wise investments. As such, it’s incumbent upon you to learn how to protect gold in your possession from state interference.

Investments at Risk

Historically, there have been precedents for various governments confiscating the gold of their citizens. It happened in the United States in the 1930’s and many investors do not realise that in Australia up until 1976, the Banking Act of 1959 made it completely legal, under certain circumstances, for the Governor General to instruct those that owned gold to deliver it to the Reserve Bank of Australia.

It has been argued that this was highly unlikely to ever occur but the Act makes for some hair-raising reading, particularly the sections that explained how it would be illegal to buy, hold or sell gold unless it was part of a legitimate trade you happened to practice. The Australian Constitution still currently allows for the ‘acquisition of property on just terms from any State or person’.

Controlling Interests

The point is that governments have the power to enact all manner of legislation as they see fit and the general population often has no idea of the implications and consequences laws can have over one’s personal affairs. Investors use gold as financial protection and it is disturbing to consider that such prudent measures could be easily undone with the stroke of an overly zealous legislative pen.

A reputable gold dealer can best advise you how to buy gold but you must decide how to protect your investment against potential government intrusion. Some simple suggestions are as follows.

Spend Slightly Less More Frequently

Currently, gold dealers in Australia are required by law to record precious metals purchases above $5000, but they are not legally obliged to report them. As yet there is no centralised database of such records that can be accessed by the government. Yet who is to say how long this will remain the case?

An obvious solution is to stay ahead of the curve by purchasing gold bullion in amounts below $5000 to limit any such records should you be uncomfortable with your financial affairs being documented.

Convert a Portion of Your Assets into Gold

With the help of City Gold Bullion in Adelaide, gold can be purchased in small increments and accumulated gradually. Instead of stuffing money under a mattress, stockpile a precious metal that retains value and is easily liquidated. Seriously devalued wads of currency may one day end up becoming worthless.

Tax Minimisation

Gold that is 99.5% or purer is considered ‘investment grade’ gold and is therefore not subject to 10% GST although numismatic 22K gold coins must have GST added when purchased from a dealer. Savvy investors would be wise to purchase the purest gold available to avoid these taxes.

Capital Gains Taxes must also be paid on any profits made on gold investments, so if the price rises after your purchase, you owe the government some of your profit. If you hold the gold for 12 months or longer you will decrease the CGT owed by 50%.

Gold bullion purchased discreetly remains your own personal business. Gold is perfect for privacy, flexibility and peace of mind. Should you decide how to best manage your personal finances then gold bullion may be the perfect solution.