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Client buys Gold bar & immediately gifts - Tax?

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A client reports she purchased several high value UK gold bars ( some time ago using her credit card in the UK) and immediately gifted them to her foreign boyfriend. There is no paperwork other than the original purchase receipt in her name to support the gift disposal.

Presumably there would have been no CGT liability on the original disposal by gift as the acquisition and disposal price will be the same . Should the disposal gift transaction have technically been reported on client's SA CGT return as value of gross disposals in that tax year likely way above CGT threshold?

Non UK resident boyfriend now plans to sell these gold bars he has owned for several years while visiting UK on holiday. Will the sale be CGT free for him assuming he has always been non resident? Owner always non resident so presumably not subject to CGT on this asset type?

 

Replies (9)

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By Tax Dragon
04th Dec 2021 09:16

Are you acting for the non-resident boyfriend? (Have you done your AML etc?) If not, why do you care... or are you anticipating that he will 'gift' the proceeds back to your client and maybe she has a tax issue?

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Replying to Tax Dragon:
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By Tax Dragon
04th Dec 2021 09:39

And when is the last time you did CDD on your client?

Conversely, have you considered whether she is being exploited? (Was it her money being invested?) Does she have more than tax to worry about? Don't go charging in, but have your wits about you.

And if you don't have a client but speak for yourself and are in this situation, take heart - there is help out there.

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Replying to Tax Dragon:
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By Paul Crowley
04th Dec 2021 17:10

You got it in one
Tax evasion scheme, but without the documents so not a scheme
Just tax evasion

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By Wanderer
04th Dec 2021 09:33

Contrary to what you say the original purchase receipt in her name DOESN'T support the gift disposal.
Unfortunate that said gift to a non resident didn't appear on her tax return.
Unfortunate that there's no deed of gift or any other supporting evidence.

Does the non-resident boyfriend exist?
Were they really gifted to him & is he really popping back to the UK to sell them?
Will the proceeds be paid into her bank account 'because foreign boyfriend doesn't have a UK bank account'.
Are you being spun a yarn?
Does it pass the sniff test?

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Replying to Wanderer:
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By Paul Crowley
04th Dec 2021 17:08

My sense of smell is non existent
I would not notice if 2 gallons of petrol spilled in my one man office
But even I can smell it from here

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Stepurhan
By stepurhan
04th Dec 2021 09:33

The eternal question arises. Why?

Your client purchased a valuable asset and just gave it away. Why did they do that? If you get an understanding of that, then what happens next may be clearer.

As has already been suggested by Tax Dragon, it seems likely they expect the proceeds to be "gifted" to them in the belief it will be tax-free. Will the non-resident boyfriend be paying tax abroad on this windfall, or is the whole thing dodgy.

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By Justin Bryant
04th Dec 2021 09:44

If you believe that story you'll believe anything. Also, for next time, as recently stated here, gold GBP£ currency coins can be sold CGT-free.

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Replying to Justin Bryant:
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By jan kool
05th Dec 2021 10:29

But be careful of sovereigns minted before 1837.

"Sovereigns minted in 1837 and later years and Britannia gold coins are currency but, like all sterling currency, are exempt because of TCGA92/S21 (1)(b)."

https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg78305

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By Calculatorboy
04th Dec 2021 22:00

I think the OP forgot to mention the bit when the Leprauchen entered .

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