If you’re thinking about buying or selling bullion in Melbourne, it’s not just about locking in a safe investment — it’s also important to understand how Australian tax laws apply to these transactions. Whether you’re holding onto gold or silver as a hedge against inflation or simply diversifying your portfolio, selling bullion can trigger tax obligations that might catch you off guard if you’re not prepared. Here’s what you need to know about staying compliant and maximizing your returns when you sell bullion Melbourne.
- What Is Investment-Grade Bullion?
Investment-grade bullion refers to precious metals like gold, silver, and platinum that meet a specific purity threshold:
Gold: Must have a purity of 99.5% or higher.
Silver: Must have a purity of 99.9% or higher.
Platinum: Must have a purity of 99.5% or higher.
Investment-grade bullion is typically sold in forms like bars or ingots, and occasionally in coins. The important distinction is that it must be traded in a form accepted by the bullion market.
Coins like the Australian Kangaroo or Koala coins can also be considered investment-grade bullion, provided they meet the purity requirements.
The main advantage of investment-grade bullion is that it’s GST-free, which makes it a popular option for people looking to buy physical precious metals as a store of value.
- Capital Gains Tax (CGT) on Bullion Sales
When you sell bullion Melbourne as an ordinary investor, any profit you make on the sale may be subject to Capital Gains Tax (CGT).
CGT is only triggered when you sell your bullion. If the price of bullion increases while you own it, you don’t pay any tax until you actually sell the metal.
The CGT is calculated based on the difference between the price you bought the bullion for (the cost base) and the price you sold it for (the sale proceeds).
If you’ve held the bullion for more than 12 months, you may be eligible for a 50% discount on the CGT, meaning you only pay tax on half of the capital gain.
Example:
You buy gold for $5,000 and later sell it for $7,000.
The capital gain is $2,000.
If you’ve held the bullion for more than 12 months, you would only pay tax on $1,000 of that gain.
- Are There Tax Exemptions?
Personal-use assets, like jewelry or items used for everyday enjoyment, are generally CGT-exempt. However, bullion is typically seen as an investment, so it doesn’t fall under this exemption.
If you are buying bullion as an investment, you should always be aware that it’s treated differently from items like jewellery or collectibles that might be kept for personal use.
- Record Keeping
It’s crucial to keep records of all your bullion purchases, including the date, purchase price, and any associated costs (like storage fees or insurance). When you sell the bullion, you should also record the sale price and any costs related to the sale.
Having accurate records makes calculating your capital gains (or losses) easier and helps avoid any issues with the Australian Taxation Office (ATO) in the future.
- Selling Bullion – What to Expect
If you decide to sell your bullion, it’s important to sell it through a reputable dealer to ensure you get a fair price and the transaction is legitimate.
Be aware of the current market prices for gold, silver, or platinum before selling, as bullion prices can fluctuate significantly based on global markets.
So, to stay compliant with the laws just keep this in mind:
You will not be charged GST when you’re buying investment-grade bullion, remember that you shouldn’t be charged GST, but if you’re selling lower-purity bullion or collectibles, you might have GST obligations.